Business Day LIVE

MOHALE Ralebitso is CEO of the Black Business Council.

BUSINESS DAY TV: Private-sector companies are not moving fast enough and introducing more diversity to their boardrooms. That’s the view of President Jacob Zuma, who has urged companies to re-evaluate the make-up of their key decision-makers. So what progress has been made and what’s the hold-up?

Joining me with his view is Mohale Ralebitso, he’s the CEO of the Black Business Council (BBC).

Mohale ... so how do you as the BBC rate the kind of progress that SA has made in its boardroom so far?

MOHALE RALEBITSO: Poor.

BDTV: Poor? On a numbers basis only?

MR: Yes ... I could leave it there but let me explain. The BMF (Black Management Forum) transformation monitor, which has been issued for a number of years now speaks to the fact that over the last three or so years, there’s been a slowdown in terms of the level of inclusion of previously disadvantaged individuals. And it’s just not good enough that as far gone as we are on this journey, you can still look at, both at board level and at executive committee level and the senior management structures, let’s call them in particular, that we still have the kind of representation that you have.

And it shouldn’t have to be that companies are cajoled into having to once more get back onto the path of say, we have to change and ensure that we have an inclusive and broad enough perspective. Particularly when ESG (environmental, social and governance) and other issues are so important in ensuring that businesses by default is connected to all of its stakeholders.

BDTV: You said in the past three years that according to the transformation monitor that things have slowed down — anything to trigger that slowdown in the last three years that you’ve noticed?

MR: I don’t know what the trigger mechanism is, perhaps people will have a sense that there are no ...

BDTV: Complacency?

MR: Complacency, perhaps there are no punitive measures to force compliance and again legislation is meant to be minimalist in terms of providing a guideline beyond that natural market sense and logic should prevail in making companies drive inclusivity. Because you would think that as we say that the black middle class is growing and a whole host of other social phenomena that are changing, which are creating better opportunities for companies (that) understand the dynamics of the market place by default.

At a leadership level you have to have those capabilities in place. It can’t just be that you transform the management structures and as they push things up, strategies in particular for board sign-off, they are going to be confronted by a board that doesn’t understand the totality of those situations. It’s just not good business. And it shouldn’t have to take the president making a pronouncement along those lines. We all know what those statistics look like and we should be doing something about that.

BDTV: So I don’t know what your statistics look like but we chatted to Deloitte last week and their statistics show about 30% of board members in SA are black South Africans, are yours vaguely similar?

MR: Somewhere thereabouts but it’s also not good enough because again you have to look at movement over time, because if you were to look and say that profitability has held steady over the last three years, no shareholder would approve of that. But on this issue if it’s been steady over the last three years and there’s no market improvement, because there should have by now been making meaningful step changes because we’ve had an extended period where those capabilities have been developed. People have gone to the Institute of Directors or any number of places where they’ve gained the requisite experience to be able to make a contribution at a strategic level.

BDTV: Do you think shareholders should be doing more to ensure the companies have more diverse boards such as the Public Investment Corporation (PIC) which is outspoken on certain issues, should the PIC and the big shareholders be taking a stand here?

MR: The PIC should definitely continue doing that and get back on that path. We still think back to the days of Brian Molefe on the PIC, he was a lot more vociferous and to their credit they have continued to be. But that voice doesn’t need to taper down, it needs to taper up and it shouldn’t be the lone voice. And quite frankly it shouldn’t be something that has to be forced upon institutions. Equally the other entities which have the responsibility of managing SA Inc’s money should also not be looking at the issue of return alone, they should be looking at the total picture (of) what drives performance in business and transformation is an enabler and if people think differently, perhaps they should have that conversation.

BDTV: And we’re not just defining diversity along race lines because that also has to be along gender lines, along youth lines ... you do want a board that’s representative for the customers that you’re serving.

MR: Indeed and we have young people who are technically qualified and amongst whom we can draw representation. And the gender issue is a longstanding one which shouldn’t fall to the back of the queue as we engage the wider racial transformation, disability or differently abled person’s issues.

BDTV: Do you think we too often fall back on the same faces on boards, so previously Cyril Ramaphosa who is now in government, of course, but recycling the same black directors rather than looking for new talent?

MR: Yes, we do that not only with the black directors, but in general you’ll see there are a number of people in SA who are the chosen few who tend to sit on boards. That has to stop because it puts a lot of stress on those people and introduces a lot of risk to those companies because if those people are represented on too many of those structures how are they going to do a proper job of exercising their oversight?

BDTV: Does there need to be tougher regulation and legislation perhaps to enforce this ... do you need to have the stick approach or can there be a carrot approach as well?

MR: We would prefer to see a carrot approach but we’ve spent 20-plus years in carrot mode. Perhaps it is time to change the rules of play but we would want to urge as a business organisation that we shouldn’t be waiting for more legislation or things to force compliance upon us with things that are good for us as businesses in any case. We should be a lot more proactive, and we should be the ones in fact who are showing the way. We keep talking about transformation being a mechanical numbers exercise. We are responsible for it becoming that. Government has ... provided the parameters, (but) we have the responsibility of taking it forward and engaging in the spirit.

BDTV: Of course you can’t have compromised skills because you do need those skills on boards and you need to have diverse skills, but the black skills must be out there.

MR: The pool is available and if there’s a thing that says that there are no skills, that can’t be the case, not 20-years plus into the journey.

BDTV: Perhaps if you look at the success that some public sector companies have had in this, without compromising on performance of companies, do you think the private sector can take a leaf out of their books and which public sector companies would stand out for you?

MR: For me there are no public sector companies that stand out in particular, if you look at representivity as well as performance. We have a number of them which are doing well and we know the troubled ones. And there are many more doing well which we don’t know about. And for us the issue isn’t just about transforming the public sector or the state-owned enterprises but there are any number of people who, by the way, when you look at a number of those, whether it’s in financial services, mining and others, are people who came from the public sector and there’s a huge skills pool there. There are many more who have been and are still in the private sector who can be drawn upon where those skills are resident. And if people are battling to find those skills — whether it’s through the BBC, through our member organisations being the BMF, Abasa (Association for the Advancement of Black Accountants of Southern Africa), Absip (Association of Black Securities and Investment Professionals), and any number of them across all sectors — we can assist if people say they’re battling to find those skills. We know where they are....

BDTV: So should they be raiding the successful public sector companies, companies perhaps like Transnet that has done pretty well compared to some of those....

MR: They should rather come to us, we’ll assist them. We don’t want those boards being raided, those people are ... performing important duties there for the country.

BDTV: I’m sure that’s a conversation we’ll be continuing with....