Black directors hold only 369 of the 3 261 director positions in all JSE-listed companies with South African-based operations, according to a new Black Economic Empowerment (BEE) report.
Empowerment rating agency Empowerdex says its report, released today, shows that black directors represented 11,3% of the “influence in boardrooms” of these companies as at December 31, 2002.
This is a major concern, Empowerdex says, as although there are 27 companies with more than four black directors on their boards, more than half (54,1%) of the JSE boardrooms had no BEE directors at all.
The report says a lack of black executive directors on the board of JSE firms is a major challenge for economic empowerment. One of the major concerns of the boardroom transformation is the fact that an unusually large portion of the appointments are non-executives.
On average, there is roughly one executive director for every one non-executive director appointed on the JSE. However, Empowerdex says in the case of black directors, the ratio is one executive director for 4,7 non-executive directors.
The report says there are only two companies with four black executive directors — African Rainbow Minerals and the MTN Group. Only three other companies — Johnnic, Brimstone and LA Group — have three black executive directors.
The 16 top companies — ranked by the number of BEE directors -‒ are mostly economic empowerment stalwarts such as Johnnic, ARM, Nail, Kagiso, HCI and Wiphold. The only traditional market players on the list are Nedcor, Primedia and Adcorp.
The sector comparison shows clearly that sectors which are directly affected by the public sector — especially where economic empowerment becomes a requirement in licensing and procurement — reflect more significant transformation of the boardroom.
These sectors include: Media (requiring BEE status for licensing), Leisure, Entertainment and Hotels (licensing), Banking and Insurance (Public Sector Procurement), and IT (Public Sector Procurements).
On the other hand, Empowerdex says sectors which show a relatively slow pace of transformation include: Cyclical Consumer Goods (Textile, Household Goods and Automobiles & Parts) and Real Estate (which has traditionally not relied on the government for licensing or as a major customer). – I-Net Bridge