Will business leaders chew on Obama’s words?

In former US president Barack Obama’s majestic Nelson Mandela lecture on Tuesday, he spoke about wealth in a section of his speech that got some of the loudest applause at the Wanderers and which resonated across social media. Here’s what he said: “Right now, I’m actually surprised by how much money I got . . . There’s only so much you can eat. There’s only so big a house you can have. There’s only so many nice trips you can take. I mean, it’s enough.” A week ago, the PwC study of executive salaries came out, and it was, as usual, a ceremony of the grotesque. How much, I wondered, do our executives have to eat? How much is enough? The remuneration committees of boards here think South Africa is Switzerland or New York or London, not the country with the widest wealth gap in the world. It’s not beyond morality or social justice or simple common sense for them to remunerate for the country their companies operate in.

Our economy is tiny, but blue-chip profits are often stratospheric, not only because the executives are innovative masterminds (many are, but many are not), but also because the economy is pretty tightly held for reasons of history that Obama went into with great eloquence.

I’ve covered enough of the annual executive remuneration lists to know what the boards will answer: good executives are hard to find and keep; they are global and can work anywhere; the benchmarks are set internationally.

All of this is true, I am sure, but so is local circumstance: our economy is smaller; the cost of living is lower for the super-wealthy, and the market economy here lacks credibility and support because it often feels like a space in which participants preach but don’t practise.

And, as shareholder activists like Theo Botha point out, often executive remuneration bears no particular relation to impact or returns.

Obama’s lesson about what is enough is worth thinking about, as is his view on inclusive capitalism. His lecture was a geopolitical sweep that sought to understand why, after two decades in which the world had become more democratic and developmental, the global order is under attack from populism and nationalism, and the market economy is under fundamental scrutiny.

One of the challenges of this inflexion point is “promoting an inclusive capitalism both within nations and between nations . . . we have to get past the charity mindset. We’ve got to bring more resources to the forgotten pockets of the world through investment and entrepreneurship because there is talent everywhere in the world if given an opportunity.”

There are indeed some South African business leaders who have cottoned on to the idea of inclusive economies, but is it sufficient?

I am researching ahead of the Brics summit next week, the annual gathering of the governments of Brazil, Russia, India, China and South Africa. South Africa has the widest wealth gap of the five, and our unemployment rate is higher than the other four nations’.

I often feel, listening to the analysis of bank economists, that our unemployment level has been discounted as the political and systemic economic risk it is. If you ask executives about this, they will argue that employment is an outcome of a growing economy. It is, of course, but it also is not, in a time of a fourth industrial revolution and mechanisation. An inclusive capitalism would make employment the key indicator of success for, as the US’s first black president said, a job is much more than a job — it is dignity and meaning too.

In his speech Obama began to offer ideas of how to reshape capitalism as Mandela reshaped inclusion and democracy and peace. I hope it will resonate around board tables.

Remuneration committees here think South Africa is Switzerland or New York or London