Barry Streek
Many black managers are being appointed to positions that carry little or no decision- making power, and the appointment of women to managerial positions appears to have declined, reports the trade union-initiated Community Growth Fund.
It also notes “with disappointment” that there has been a significant decline in companies’ training expenditure as a percentage of payrolls.
The Community Growth Fund, which controlled assets worth R817,1-million at the end of 1998, says some of the companies which failed to make the grade according to its social criteria have been refused investment because of the small amount they are spending on training.
In order to grow, the South African economy requires effective training, which in turn requires ongoing commitment from companies to increasing their training expenditure.
“Reports by our researchers indicate a decline in training expenditure as a percentage of payrolls from 3,3% to 2,4%,” says the fund. It hopes the Skills Development Act will address the situation.
The fund has approved Educor, a company involved in education and training, because it has met all its social responsibility criteria. Other approved companies include Chemical Services and Imperial Holdings, while the fund is monitoring Iscor and Rand Water.
It says the South African Breweries- controlled Amalgamated Beverage Industry’s “approved” status might be reviewed “following reports from research reports that the company’s socially responsible initiatives went on the slide subsequent to the initial approval”.
The fund welcomes the steady increase in the number of black people in managerial positions, but says it is concerned many of these appointments might be nothing more than tokenism.
“This concern stems from our experience that many black managers are appointed to positions that carry little or no decision- making power. In addition, it is unfortunate to note that the number of women appointed to management positions appears to be in decline.
“We attribute these disappointing observations to `knee-jerk’ reactions of companies to the new dispensation – in other words, they are appointing a few black faces to their boards in order to win contracts.
“Invariably, these appointments are to non- executive positions. This is an area of social responsibility that we will continue to address through consolidating our efforts in order to ensure that the Employment Equity Act becomes more effective.”
The fund’s top-10 group holdings are Real Africa (7,3% of the fund), Investec (6,1%), Polifin (5%), Board of Executors (4,9%), African Harvest (4,6%), Delta (4,2%), Metropolitan (4,1%), Didata (3,8%), New Clicks (3,7%) and Nedcor (3,3%).
One black empowerment group disappeared this year from the fund’s holdings. The report reveals that by the end of March it held 4,5-million of New African Investment Limited’s N-shares. By the end of June, they had all been sold – fortunately for the fund, before the recent sharp decline in their value.