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In an interview with Tim Modise Shell South Africa’s chairman Bonang Mohale says the lack of investments in state owned enterprises together with poor corporate governance have undermined the capabilities reputations of Black leaders at these companies. He says the rate of change in the economy is not sustainable as the patience of the economically excluded is wearing thin. He also says decisive leadership is required to give momentum to all the economic plans that the country has. – Tim Modise
Thank you for having me.
I’m talking to you so we can probe this topic of transformation, something that I know you feel very passionate about and, of course, as Black Management Forum – it is still relevant to yourself but the question is which parts of the economy need to be transformed, from your point of view? I mean, why are we still talking about transformation 21 years into our democracy?
Yes, I think it’s a good question, Bra Tim, especially when you consider that as a country, in 21 years, we are really now coming of age, and we can’t continue to blame apartheid only, for some of the challenges that we are continuing to have. The questions that we need to ask ourselves is now that we are in power who do we expect should be transforming this economy?
The second thing, we then need to say, but have we really set ourselves tangible targets, and who does what, when, how, so that we can measure and monitor? Then lastly, why are we complaining when we actually are in political office? Where we can just get on with the task of transformation, so as the Black Management Forum our reason for existence it centre stage, bang in the middle of this conversation because we were formed almost 40 years ago. On the 17th April 1976, just before the students’ uprisings. To provide answers to some of these vexing questions.
Our only reason for existence is really to, number one, is the development of managerial leadership, primarily but not exclusively amongst black people, and number two, social economic transformation. So you see that both of those really find expression in this conversation that we call transformation, and for me, the way we understand transformation, in the BMF, is that this is a blend and positive process and strategy. That is aimed at transforming the social economic environments, which have excluded individuals from previously disadvantaged groups, in order for these individuals to gain access to opportunities – including developmental opportunities.
In a simple language we really want to shift the economic power patterns, from the haves to the have not’s. What we want to do, ultimately, is to ensure that not only the economy – not only the politics. Not only corridors of power, and not only positions of leadership should be broadly reflective of the demographics and the demographics are very easy to remember – 79 percent, (so you round it off), 80 percent of this population, 52 million South Africans is Africans – ten million or ten percent is only white. About eight percent is, so called coloured, and maybe two to three percent Indian.
When you look at their representations in positions of leadership, ten percent is still more than 57 percent of positions of leadership. Black people who are, roughly, 80 percent – have never been more than 50 percent represented in positions of leadership, and that’s what we want over a period of time, to really reverse, so it’s about ensuring that the benefits of this democracy dividend are peculated to the majority of the people.
Now one question that keeps coming up, whenever we talk about organisations such as yours, is whether these organisations should be racially defined. You’re calling yourselves Black Management Forum, for instance. That in the spirit of the non-racial, democratic South Africa – we should be doing away with racially defined organisations.
You know that’s an interesting conversation because some of these transformative instruments, like Employment Equity, Broad Based Black Economic Empowerment – we will never find attraction if we start talking about these conversations. The questions we need to be asking is, is why does poverty still have a black face? The narrative that says whenever there’s an employer and employee, the employee is always black, and the employer is always white.
Today we are not asking questions about why the Afrikaanse Handelsinstituut is still there to promote the interest of Afrikaners. You see, the way we ought to be looking at this for me, instead of even calling it transformation. We should really be talking about ‘nation building’. To say ‘how is it that we were able to be the miracle country in the world, at the time that the world was both conversing and disintegrating at the same time’? We could be Libya. We could be Egypt. We could be Ukraine, at the moment. There could be wars. We’d be chasing each other. The infrastructure should have been destroyed but our forebears chose to have a negotiated settlement and they gave us this most amazing gift of a united non-racial inclusive constitutional democracy.
Each one of those words is graved with meaning. Today we have the best constitution in the world because we stole absolutely the best from everywhere else in the world. The Bumiputera experience in Malaysia. We stole from the Canadian experience. How they empowered the positions of women, especially in Québec. The problem we have, especially in the biggest economy in the world, the United States of America, they are still talking about race today because, again, Detroit and Harlem is primarily black and the face of poverty, of inequality of high unemployment of subjugation and exclusion is still black because they’ve never really dealt with this issue.
They never gave employment equity, affirmative action, equal employment opportunities of Doctor Reverend Leon Sullivan, time to gain attraction because they are very quick to say, “We have voted. We are now 20 years. Things are now normalised.” Things will never normalise themselves until we actively take measures. It was an active process to exclude black people and women from the economic mainstream – 107 pieces of Legislation, so it ought to be an active process, to bring them back into the economic arena, so that’s why for me the conversation should not even be about transformation – which means, fundamentally, breaking with the past.
It’s an acceptance that our history is painful. It’s dark. Nobody wants to go back there. We should be rather talking about nation building and nation building says, “How do you build a nation in such a way that you are internationally competitive?” You then say, “I can only do that if I’m inclusive.” It needs young and old, men and women, black and white. At the moment, the economy is really dependent on a few of our people. We’re leaving 54 percent of the population behind, which is female, and we are leaving 90 percent of the population, which is black – 80 percent of which is African. We need to be saying, “How then do we become more inclusive? How do we bring them in?” That, to me, is what transformation is about.
Now, how do you rate the whole process of transformation in the country? The speed with which it’s being implemented or not implemented, given that the democratic system has been in place now for 21 years and people, (it appears to me and I’m sure you’ll share the same sentiment), that there’s impatience that’s growing out there that things are not moving as fast as they should.
In fact, I’m amazed at the patience of our people. Young men who have nothing to do. Sixty percent of them who finished grade 12, old matric, have nowhere to go and yet they’ve been very patient. The townships that are not getting service delivery, and their schools don’t look like the ones in town, and yet they are still patient.
I’m amazed by the 16 million South Africans that are still on some sort of Social Security, when only 11 million of us are gainfully employed. Yet, they are not rising up in arms in an organised, integrated fashion. It is still sporadic, on average two, service delivery a day, every day, protests. It could have been worse, so I think for me instead of saying – 21 years later. Let’s look at the balance scorecard. In fact, we find that we have done very little, to improve the quality of lives of the majority of our people.
Look, there are some good stories. One million people have entered the middle class. We add on average 400 thousand black families into this middle class, LSM-5 and above, and we have done well – one-point-three million black people, by enlarge, employed by this Government and Government is the biggest employer. What we need to be seeing to happen and agitating from is that like when you go to Russia, when you go to China, or you go to Japan and India – those companies are typically Russian, Chinese, Japanese, and Indian, except when you come to South Africa. You are still confused about where you are. So the face, the complexion, the language, the diction, the narrative ought to be, absolutely black and, indeed African.
But, you see it takes the political nature, whenever we have this discourse in the country, right? It seems to be something that’s confined predominantly in the political corridors, and we don’t hear much coming from private business, the private sector – the captains of industry, themselves, pushing for that. Why do you think that is the case?
Precisely, because you see when you’re talking about fundamentally breaking with the past, about transforming. The people that have the microphone have the corner office and have the authority to make things happen in their own companies. They are still, primarily, white male and mostly Afrikaners, so it’s like trying to get the techie excited about Christmas, so you can’t go to a company and say the lowly paid employees, who are lower than middle management, must form an Employment Equity Forum. Whose job it is monitor the speed, the depth, and the width of transformation in the organisation, when they don’t have a position of power.
Transformation happens when it is driven by the Executive Chairman, by the group’s CEO, by the group’s CFO, by the EXCO of that entity. When they see it not as something that they do and they’ve got nothing else to do, but when they see it as integral to the business.
But I want to go back to the point you made earlier on. I mean, if the economy has got to grow and benefits have got to flow all over the place and everybody – we’ll create a win-win situation, right? You have a bigger, stronger middle class as a result of these changes. One would think that it’s a ‘no brainer’ that the people who are experienced in running businesses should see it for themselves and say, you know we are going to create this big, massive group of people, who will use our services, buy our products, and then we’ll all win and grow our companies.
You are absolutely correct. Easier said than done, and it’s logical. It makes sense but yet, it is not happening 21 years into democracy. Even our own Government, in most appointments, even of State owned enterprises they find it much more, easier and comfortable to still go to their usual suspects. Rather than be bold, and visionary and leading with a heart of a servant by saying the people that we’re trying to empower are black and female. Those are the people that need to gain the experience of being a CEO or Managing Director, etcetera.
We need to be building the next cadre of CEOs of the South African Airways of this world, the South African Broadcasting Corporation, so that they can be head hunted by the CNNs and the Kenya Airways of this world. Yet that’s the area where we are most reluctant. Look at the pilots that are driving our airbuses and Boeings today – 97 percent of them came from the South African Air Force, in the old regime.
There’s never been a concerted conversation to say ‘are we going to be very deliberate, very purposeful, very strategic about taking our own youngsters – take them to the army. We are not at war with anybody but take 200 or 2000 of them, through the air force. Let them learn how to be pilots, so that they feed the next generation of pilots at SAA. We are still at the mercy of the people that was trained by the apartheid regime, not by the ones that we have trained ourselves. That talks to lack of foresight. Lack of planning. It’s about being concerned with what happens today, not laying the foundations for the next 50 years.
I want to talk about the leadership that exists in the State owned enterprises, especially black leaders there. You know, in recent times, most of them leave disgraced. They are forced to leave their positions and they are, generally disgraced. There are golden handshakes that are paid out and so on. What’s your view about the manner in which they exit these positions?
You see, there’s a very worrying trend in state owned enterprises, to be specific. When you cluster, the challenges there are around three things. First, it’s around their finances, so we are not properly capitalising these entities, SAA, Eskom, SABC – we just want them to perform functions but we don’t want to invest in them, and yet the Afrikaners did exactly the opposite. They created their own institutions, Rand Afrikaans Universiteit. They created UNISA. They created the University of the Free State, etcetera, and those monuments still stand. They created the Sanlams and the Santams of this world, and they still stand.
For us, we want to reap the benefits without actually doing the investment. The little investment we have made, by private sector, like the African Bank have disintegrated so finance is number one. All of them are undercapitalised. The second is around plan and preventative maintenance. The problem with Africa, as a Continent, we build new buildings. We run them down and then we abandon them, and we build another one next door. Nigeria built an entire new economic capital called Abuja – they left Lagos because it was chaotic and yet, when you go to Europe, in particular to Oxford and to Cambridge – you’ll find buildings that were built in the 1400’s, still beautifully maintained. They are heritage sites. People take pride in them because they understand this concept of maintenance.
The current loadshedding challenges we have today – that is negatively impacting our GDP growth and, therefore what is available to the economy, to redistribute. It’s as a result of what we neglected, in terms of the maintenance, in Eskom. Plain, preventative maintenance – you don’t need to be a rocket scientist. You have a car and every year, or when you reach a certain mileage – you go for it to be serviced. If you do that regularly, diligently, in fact, you can keep that car for 30 years but if, you say ‘I’m going to run this card hard’ – ‘I’m going to accelerate. I’m going to neglect the maintenance’ – even if that car was designed to live for ten years, you half its lifecycle.
The coal-fired power stations are in a mess today because we neglected to maintain them but we ran them very hard, so this issue of planned and preventative maintenance – but the big one is the one you’re asking. The issue of governance. You see, governance is also about saying, “How do you come up with a clearly understood, and articulated role clarity and role definition?”
Government is 100 percent shareholder in most of those entities. You then need to say ‘but what is classically, the role of Government’ – ‘what is, classically the role of a shareholder’, like in any other company? The role of a shareholder is to appoint the Board, and that’s where your job ends. You then come and say ‘but what then is the role of the Board’? The role of the Board is to lead the Board and not the enterprise, so if you are the Chairman of the Board, you are not the Chairman of SAA to run the company. You are the Chairman of the Board – to give governance, stewardship, property, the duty of care, skill, and diligence to the Board. The duty of the Board is to then, appoint the CEO that they are comfortable with, so that if they are not happy with the CEO they can fire the CEO. But imagine if you are the Board. You give the CEO, the CFO, and the entire EXCO. After three years, you say to the CEO, “But you are not producing the numbers that we agreed.” The CEO has a perfect excuse to say, “But the people that you gave me,” so we need to trust the people that we put in positions of leadership.
The Board appoints the CEO. Then you trust the CEO, for the CEO to go and find his own team. Why do you want to meddle? So those rules need to be clearly understood. Today we have a paper that is doing the round, where Government is saying, “We are not happy that we are appointing the Boards. Now we want to appoint both the CEOs and the CFOs.” Therefore, you’re taking that important notion of holding people, finally accountable. Their feet to the fire. To empower them and to make sure that after ten years they, themselves have such currency that they can be headhunted by other countries.
My final question to you. Now, we’ve got the challenge of the slow pace of transformation and the other challenges that you’ve already spoken about in the State owned enterprises, right, and we are facing another one. That of economic growth, if we are going to create opportunities anyway, so a question of leadership, political or business. How do you rate leadership in the country because decisions have got to be taken and somebody must drive these things and make sure that they get implemented?
Absolutely, you see, sometimes we use these words ‘interchangeable’ in leadership and management, so for me, there’s a huge difference. Leadership it’s a higher calling. Management it’s about the effectiveness and efficiencies, in climbing the corporate ladder of success. He’s the one that says, “If something needs to be done then it is up to me.” It’s about managing two things of ambiguity and uncertainty, to a point. Whereas leadership is about being genuinely obsessed with the development of others.
You are at peace with yourself and the position you have attained. Bonang Mohale, as the Executive Chairman of Shell, South Africa. How high can he go? He must be at peace with that part. You’ve done very well. Now, every waking moment you need to be obsessed about how do I find young people? How do I nurture this talent? How do I counsel and coach? How do I empower them? How do I give them space to make their own mistakes because in life we learn more from those things that we don’t get right the first time than those that we do.
So to give them the right to fail, to learn, to gain their own confidence, because confidence is gained through competence. Knowing that I’ve actually done the role, so if leadership is about being obsessed with the development of others. Even with Government as a shareholder. They should not be worried about themselves. They should not be worried about the next tender, about the coal contract in Eskom. About my company providing the diesel, at Eskom. They should be saying, “I already have a position. I am out of poverty. I am living in a government house, and I’m driving a 7-Series.” Therefore, how do I make sure that the village in Bizana, where I come from, that there is development there? How do I bring in new people, so that we can look back and say, like the Afrikaners, “Look at the cadre that we have developed and the companies that are sustainable that we’ve created.”
There’s a very worrying trend, at the moment, where it feels and looks like it’s a feeding frenzy. Everybody is in it for me, myself, and I and yet we have learned from some of the companies we compare ourselves with, and countries, the BRICS countries. I mean the Chinese plan for 50 and the next 100 years. We are not even prepared to plan for the next five years. That’s why we have the Eskoms, the SAAs, the Medupi, Kusile, and Ingula – that we are just battling to deliver.
Yet, the lessons are there, in the private sector. This thing called pressured management, in simple English, is about ensuring that you deliver mega projects, on time, in full and on budget, and we are unable to do that. With every, single solitary one, of the mega projects that we have ever undertaken, as a ‘people’ – with great natural endowments. Yet, we find it uncomfortable to say, “The private sector, you do this so embarrassingly well. We at Government, we have a role to play. What if we were to join our forces?” Look at synergies. We will continue, and indeed be the greatest nation in the world, to give effect to the South Africa of Rolihlahla Nelson Mandela’s dream to say, “Not only are we great and resilient people, but we have the potential to be the greatest nation in the world.”
But it’s about doing certain things. I think it was General George Patton who said, “Great wars are won by good execution. Not good planning because good execution will save even a mediocre plan.” At the moment, South Africa, like the rest of the Continent, we are stuck at the level of planning. If there was an Olympic sport for planning, we will win it hands down because we’ve got plans for everything. Even economically. We started with the RDP, then we came to [AGEAR? 22:13] and then AZGYZA. Now we have the National Development Plan, and somewhere in the middle, there was the National Growth Planning.
When it comes to execution, to the doing. To putting our shoulder to the wheel, starting with a project. Pushing it all through, in spite of difficulties and challenges, we go through with it. That is the part we are not willing to do to invest, and as a result, there is now a culture of entitlement. To conclude, Bra Tim, isn’t it amazing that those countries that have rights, often perish, and yet those countries that have responsibilities thrive, grow, develop, and move forward in space and in time?
That’s the President of the Black Management Forum, the Executive Chairman of Shell, South Africa, Bonang Mohale talking to us. Much appreciated. Thank you.
Thank you, Tim.
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