You can’t keep a good dynasty down
But then there’s the professional directorate…
THERE HAS BEEN a dynastic tinge to the development of the South African private sector and it has generally been highly productive. Take, for example, the great Oppenheimer dynasty founded by Sir Ernest. He was followed with distinction by his son, Harry, who built with enormous success – and with considerable courage and foresight – on the foundations left by Sir Ernest.
His son Nicholas, who has returned the family to its original core interest in diamonds, in turn has succeeded Harry. He’s chairman of De Beers, which he runs with his own son, Jonathan, fourth in the line.
Jonathan, in turn, has three children, two boys and a girl, so that a fifth-generation De Beers dynasty is quite possible.
There’s also the family holding company – E Oppenheimer & Son – which deploys its returns from its core stake in De Beers into a wide range of other investments worldwide.
Anton Rupert’s original Rembrandt group, based primarily on tobacco and alcohol (and later, health provision; perhaps to treat the ills inflicted by cigarettes and brandy) was the foundation of another dynastic South African enterprise that’s been transformed by his son, the ebullient Johann, into the world’s leading luxury goods provider via the Swiss-based Richemont along with a range of other interests, from mining to banking. Johann also has three children and thus the Rupert dynasty appears likely to endure.
At the Altron group, founder Bill Venter – who was once thick with the Nats and is now thick with the ANC – has installed his sons Robert and Craig as his successors in what is another burgeoning dynasty. At Pick ’n Pay, founder Raymond Ackerman’s son, Gareth, and his siblings are also well set on the dynasty path.
Such family success reflects Adam Smith’s example of the individual in pursuit “only of his own gain” who “is led by an invisible hand to promote an end, which was no part of his intention”.
Here we talk, of course, of those who place their own funds at risk, entrepreneurs who create wealth, jobs and opportunities and generally enrich society. Then you get that other class, the professional directorate, those who spend their lives at, or preparing for, board meetings or meetings of board committees or meetings of shareholders – just so long as there are meetings. Meetings are their lifeblood and the source of their fees.
One such is the lugubrious Warren Clewlow, now nearing his sell-by date but still chairing Barloworld, where he has hung around for, it seems, a century or so. His directorial tentacles extend far and wide: to Nedcor, Sasol, Old Mutual, and so on.
At Nedcor he distinguished himself by, along with his fellow fee-earners, permitting the oleaginous Michael Katz (and colleagues) to buy back the law firm of Nathan Friedland from the bank for a pittance of R50m – payable, one suspects, on the never-never after Katz and his colleagues had been paid R400m for their desks and chairs.
Katz himself pocketed R100m of that, depositing his nice little windfall shortly before his tax commission recommended that capital gains be taxed. Whew!
One would think that any self-respecting chairman would lean upon someone like Katz to depart in peace with his tax-free gains. But no, Katz remained on board – nogal as deputy to Clewlow.
Be all that as it may, what we now have is a situation in which Clewlow, as chairman of Barloworld, is sitting in judgement on his son-in-law, Clive Thomson, who is about to succeed the admirable Tony Philips as CEO of the group. Oh yes, Clewlow protests that he recuses himself from all meetings at which the succession issue is discussed. Hopefully, he refunds a portion of his fees to Barloworld for opting out of such a critical – probably the most critical – decision facing a board.
This column was written before the Barloworld annual meeting took place on Friday, 26 January. However, earlier last week Brian Molefe, CEO of Barloworld’s largest shareholder, the Public Investment Corporation (PIC), lashed out at Clewlow’s position.
According to Business Day, Molefe declared: “This is absolutely preposterous. What kind of contempt for shareholders does this company have that it replaces directors during the year and then brings their choices to shareholders simply to rubber-stamp their decision?”
Presumably, Clive Thomson is an able chap who would make a decent fist of it as CEO of Barloworld. But does Clewlow have no feel at all for appearances, for perceptions? Surely he could have swallowed his ego and quit as soon as it became clear that Thomson was a contender for the top job? It seems that Clewlow views Barloworld as some sort of private fiefdom. He forgets that he isn’t an Oppenheimer, a Rupert or an Ackerman. He isn’t even a Venter, though he was also thick with the Nats.
Clewlow’s just a hired hand earning fees from shareholders’ funds who has got a little above himself.