Corporate activist Molefe
It’s ironic that the PIC’s CEO is himself not subject to pressure from stakeholders
LET'S BE CLEAR about one thing: democracy does not require the election of black company directors. In fact, pressures to appoint black directors have reached levels of coercion that are the antithesis of democracy, as is patently obvious in the case of Barloworld.
Now this does not mean I am a hidebound racist. On the contrary, I have written frequently that the new political dispensation in 1994 was only the start – and in fact one of the easier steps – in a general transformation process, and that it’s essential for political reform to be accompanied by economic reform.
Similarly, it’s perfectly proper for shareholders to elect directors of their choice. One of the worst features of the old SA – though it was by no means unique to SA, but common in much of the Western world – was that company boards tended to be self-perpetuating oligarchies that admitted newcomers only if they came from the same mould and were unlikely to rock the boat.
Of course, in the case of institutions one needs to be clear that any corporate actions they take are endorsed by their own stakeholders. I’m not aware of the process by which the Public Investment Corporation’s (PIC) Brian Molefe canvassed the views of the hundreds of thousands of current and future public-sector pensioners over whose funds he exercises stewardship; indeed, my impression is that he is subject to hardly any of the influence private-sector pension fund members can exert on their boards of trustees.
When Molefe says he intends to become much more of a corporate activist, it’s ironic that he himself is subject to no such pressures.
None of this, of course, exonerates Barloworld from a charge of being hopelessly out of touch with the new SA. Its record in black advancement is just about the worst of any group of its size (even granted that that size is steadily being diminished) and that’s worse than just carelessness, it’s a big mistake. However much one deplores the stridency of advocates of black enrichment, it’s folly to ignore them.
As the old saying went, if rape is inevitable, one might as well lie back and try to enjoy it.
Barloworld gave the impression that the pace and extent of empowerment were entirely in its power to decide. That was perhaps its biggest mistake of all. It now has to live with a clutch of black directors that, estimable as they are, may not be individuals of its preferred choice and may not be the best placed to contribute to the further prosperity of the group. I say prosperity rather than growth, as almost every announcement expands the range of activities that are no longer considered core.
For a company at this crucial life stage to contrive to lose both its chairman and CEO at the same time is staggeringly incompetent. And it’s a pity that Warren Clewlow’s travel arrangements were so inflexible that he had to leave the AGM in such a hurry. He only has himself to blame if people choose to see that as a fit of pique.
There may well be value to be unlocked at Barloworld, whose clumsy name is increasingly inappropriate. Barlowbacktosmalltime might be more descriptive. Be that as it may, the group’s image has been done considerable harm by these shenanigans, and while unbundling may justify a one-off revaluation, in the longer run the investment rating will surely suffer.
However, I don’t think this is an episode out of which anybody has come well – though I’m sure Molefe, for one, will disagree with me.