Cor­po­rate ac­tivist Molefe

It’s ironic that the PIC’s CEO is him­self not sub­ject to pres­sure from stake­hold­ers

Finweek English Edition - - Companies & markets - BY MICHAEL COUL­SON

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.

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