Are local CEOs just BEE-ing used?

When Anglo American was fending off the unwanted advances of the then Mick Davisled Xstrata in the aftermath of the last global recession, it exposed the flaw of the South African CEO position in a company that is quite clearly being led from headquarters elsewhere.

With Anglo’s board trying to drum up shareholder and stakeholder support in the South African government, it was quite clear where the real power vested.

The potential merger and a possible end to the Anglo story, one shaped by its more than 100-year history starting in Kimberley, was more than just a matter of some corporate activity. It was much larger than that, given that to many both the rand and Anglo represent the share price of this country.

Given its diversification in the past decade, less so now, the miner still has some clout in international perceptions of SA Inc.

This was something in Anglo’s battle to ward off interest from Xstrata or any opportunists its London-based executives drummed up to gain support from the state and the Public Investment Corporation — its biggest shareholder — to help squash the deal.

Having roped in Sir John Parker as chairman during the hostile bid, Anglo was able to ensure there was little support for a deal that was touted as a “merger of equals”.

Through the course of this battle, Anglo had a head of its SA business in Kuseni Dlamini, who left the position in July 2009,

months before the battle was won.

It would only be in October of that year that Xstrata would drop its advances. I don’t know what went into his decision to leave in the middle of what was a heated battle as contested as Harmony’s hostile bid for Gold Fields and one that graced the pages of the world’s leading financial papers, such as the Wall Street Journal.

Dlamini himself took over from one of the forerunners of black economic empowerment, Lazarus Zim, who lasted just over a year.

Having followed that Anglo takeover, my question has always been just what was the purpose of the South African role?

It’s a role that comes with no operational control, and if you’re a person who has any sort of ambition and doesn’t want to settle for a fancy office and the perks, I can imagine it’s one that can easily frustrate. Perhaps Zim’s departure reflects just some of those frustrations, and the same, I would imagine, for Dlamini himself.

I can only imagine how easily someone in that role can be undermined by the Anglo old guard who continued looking after the actual operations, and there have been some legendary hard men in that place. The role remains to this day, and one can only hope there’s much more responsibility placed on it than just being a role to appease government and any empowerment scorecard.

The story of Anglo and the Xstrata scrap and the usefulness or not of the miner’s local head came to me when I considered the Naspers appointment of Phuti Mahanyele-Dabengwa as CEO of its South African business, ahead of the offshore listing of its much more valuable international assets.

With MultiChoice long unbundled, its local business now makes about 4% of its revenue.

She will report directly to Naspers CEO Bob van Dijk and oversee the group’s main operations in SA — Takealot, Superbalist, Mr D Food, OLX, Autotrader SA, Property24 and Media24 — alongside its new start-up fund in the country.

This looks like a rather similar trap to the one of Anglo with its South African head, and possibly worse, given Naspers’s controlling structure. A structure that ensures that only a handful of people, such as its former CEO Koos Bekker, really drive the fortunes of Africa’s biggest media company.

The dual shareholding structure matches if not betters some of the worst practices of giants such as Facebook.

If Mahanyele-Dabengwa isn’t among those privileged few, one only wonders just how weighty her oversight role will be over, say, the CEO of Takealot. It risks being a ceremonial role, one created to appease a South African state wary of another giant corporate about to list in an offshore market.

Her position must not just become a corner office with little to no responsibility, which ultimately hurts our transformational journey. There’s enough evidence of South African corporates dreaming up positions to quieten down the noise about the old boys’ club.

We should hope Naspers’s South African CEO is allowed space to establish herself and shape the company. If she’s not given the space, why do it in the first place?

Derby, a former Business Times editor, hosts Power Business on Power FM