This is no time for despondency
Old Mutual’s appointment of former finance minister Trevor Manuel as the next nonexecutive chair of Old Mutual Group Holdings has raised a few eyebrows, not least because it owns Nedbank — a rival to Barclays Africa, which is headed up by Manuel’s wife, M
How ready is Old Mutual for the Twin Peaks regulation?
It’s complex legislation and the key challenge is that parliament passes good, strong, competent legislation as a precursor to regulation. Having said that, it’s not entirely new because the [authorities in the UK] have a similar kind of oversight of Old Mutual plc.
Look, the point about taking on a suite of nonexecutive positions is: you don’t sit down and say: “This is what my portfolio will look like.” You’re approached and you have to consider these matters. I could not have anticipated being approached by Old Mutual in this way. We’ve had a few rounds of discussions, and I’ve met the regulators [in the UK and South Africa].
How have you found the transition from government to corporate life?
All of these things depend on your state of mind. My withdrawal from government was staged. Going back to 2012, I decided to decline nomination for the ANC national executive committee . . . and in 2014 I declined nomination to parliament. I think the privilege of being able to phase my own retreat out of the governmental system . . . my state of mind allowed me to engage with issues a lot better. I didn’t rush anywhere. It’s important to look at 2015 as my first year of a very steep learning curve. There are things that are similar: a voluminous amount of reading to get through, always packaged in a way that you’re in a pressure cooker when you have to get through it.
I serve outside of Old Mutual [at] Rothschild and Swiss Re. The learning [curve] there is very steep, very different. I’ve also spent time this year on the board of SABMiller plc.
That must have been interesting . . .
That’s still interesting. It’s been an incredible experience, living through this. What’s very important about all of these situations is you have to prove yourself equal to the task, and that does mean there’s very little room for slouchers. So that’s been the transition . . . I insist that I’m young enough to learn new things.
You come into the role at a very difficult time for the economy. And Old Mutual’s chief economist, Rian le Roux, recently compared confidence levels to the lows of the ’80s . . . how can we get that confidence back?
The short view is twofold. One is to make a commitment to other social partners, and the second is check out the egos before you engage in discussion. A few years ago I got in trouble with the trade unions for saying that I thought that business in general was cowardly in its engagement, and they said: “Don’t give business ideas.”
But I have a very old-school view of how we deliver a social compact. The International Labour Organisation has premised its very existence on bringing together employees, trade unions and governments to talk through issues and reach agreements. If you don’t have that kind of engagement, then I think you have a downturn of confidence.
One of the institutions established early in our democracy, for the purpose of bringing together business, labour and government, was Nedlac. Or is Nedlac. It was established in 1995, the intent was very clear: it has to be a forum for social dialogue.
The moment it became a negotiating forum, it started to break down. My sense is that because business didn’t want to be held to ransom in negotiations in a forum not designed for negotiations, I think they then downgraded their own representatives and trade unions did the same. For a while they held out, but realised that unless people on the other side of the table could actually take proper decisions, it didn’t matter how loud their voices were, it wouldn’t have an effect. I think the institution is quite broken.
When it was established, everybody in South Africa was very committed, people still spoke about “the new South Africa” and those were the halcyon days of democracy. Establishing Nedlac at the time was a very good harvesting of the spirit at the time, and you need that spirit to build confidence.
Now it’s broken, and there’s a big challenge that confronts all of us. There’s no gain to be had from finger-pointing. We must get senior people to sit down, make the commitments and follow through on those commitments. In the absence of that, we might have meetings to showboat, for photo opportunities, but that is just a waste of time. You’re not going to be able to build the trust that is necessary to create the confidence that we’re in this together, that we can face the challenges together. And without the trust you’re not going to secure commitments. But when people talk past each other and nobody bothers, then things fall apart. That’s actually what we’re living through.
Do you feel responsible, as a former government leader, that we have this breakdown and rising mistrust?
I don’t think anybody can be absolved of responsibility. If it was government, it was [because instead of trying to mend relations], we didn’t pull the other organisations into forums so we could talk openly and candidly and find solutions.
Having stewarded South Africa through a budget surplus and investmentgrade status, how do you feel now that we’ve sunk towards junk status and a yawning budget deficit?
The point is not to take yourself too seriously, or your con- tribution too seriously. The big issue is that, given the parlous state our economy is in, it’s very hard to look parents of Grade 12 [pupils] and people at universities in the eye and talk about the future of their children. As the investment grade drops, interest rates increase and you can’t do things unless there’s an all-in — especially in the broader state sector — an all-in commitment to ensure that we live within our means. Every indication is that it doesn’t matter and that is a frustration.
It’s also useful reminding ourselves that reputation takes a very long time to build and can be destroyed in a very short space of time. The difficulty that confronts us now in respect of the position of our economy in the global economy is that . . . I know that we’d hoped people would cut us some slack after the arrival of democracy. It was a hard grind, but I think it’s going to be even harder now.
But in realising that, I think there’s no room for despondency. We need to say to all leaders in the country: let’s sit down, realise that this thing is very broken and try and make it work.
I plead the fifth from now . . .
Do you think South African business needs to do more to address the trust divide? Or should it come from government’s side now?
You do need some firm, very committed leadership from the side of government. And it must demonstrate that it has muscle [in] all departments and all spheres of government. You also need that voice to say to business that the divisions between the business organisations is exceedingly unhelpful. You have Business Unity South Africa, the Black Business Council, et cetera . . . there’s no reference point for decisions.
In the context of the Labour Relations Act, you now have trade unions that are outside of the framework that has generated a shift in social dialogue . . . and the big problem there is that the largest unions are outside of federations.
It’s not something we can just bemoan — we must have a determined set of actions that frees up time and says: this is going to be our No 1 priority; we’ve got to get the machine that drives the economy functioning again. You need government to free up some hands and knuckle down.
There are some in government who criticise South African businesses for hoarding their cash . . . or not spending here. What do you think of those firms looking for their growth offshore?
You walk around any mall and you look at what people eat and what they wear, et cetera. Everything that people do has been internationalised. If you want to close in all South African firms then we must, by the same token, say that we shall not use iPhones, iPads, HP and Dell [products].
Life doesn’t work like that. And some of our firms have used their prowess and expanded and their experience has been very different.
Talevi is a BDTV presenter
But when people talk past each other and nobody bothers, things fall apart. That’s what we’re living through
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