Not enough black, female directors, study shows

Black people and women continue to be grossly under-represented in all directorships and top executive leadership positions of JSE-listed companies, according to a survey released on Tuesday by Business Unity South Africa (Busa).

The study showed that:

  • of 269 CEO positions, black people occupied 9% and white people 91%;

  • females accounted for 3% and males 97% of 219 chief finance officer positions;

  • females accounted for 7% and males 93% of 245 non-executive chairperson positions; and

  • females made up 6% and males 94% of 1 664 non-executive director positions.
Busa said that as many as 533 executive and non-executive directors were expected to retire from JSE-listed companies in the next five years.

While black people constituted 87% of the economically active population, their representation was clearly nowhere near this percentage in both executive and non-executive directorship positions, it said.

“These findings have confirmed the negative picture that has been painted year on year by the Commission of Employment Equity.

“Despite the fact that the number of black and female Chartered Accountants increased over the years, 92% of CFOs were found to be white.”

This, Busa said, painted a bleak future for potential black chief executive officers, most of whom came from the ranks of chief finance officers.

“The anticipated retirement of more than 500 directors in the next five years provides a golden opportunity for expediting the pace of transformation in the upper echelons of corporate South Africa,” Busa said.

Measures to overcome under-representation
It recommended that companies develop and implement measures to overcome under-representation of black people and women in directorship and top executive leadership positions.

“One possible strategy would be for companies to identify all directors who would be retiring at least 18 months before their retirement date.

“Skilled and knowledgeable black people and women who might lack the requisite board experience should be identified as ‘shadow directors’ [not in perpetuity] to replace retiring directors.”
Busa said retiring directors would then have a period of at a least a year in which to mentor “shadow directors” on the nuts and bolts of the board and other company information before handing over the reins.

“This is just one possible strategy for companies to develop and implement over the short, medium and long term.”

Busa anticipated that the implementation of the recommendations outlined in the report would lay the foundation to ensure that the next generation of leaders of corporate South Africa closely resembled the demographic profile of the country’s economically active population.

This would be in line with the twin government policies of employment equity and broad-based black economic empowerment.

“We also impress upon the recently established Broad-Based Black Economic Empowerment Council to promote a more inclusive economy by accelerating the speed of transformation in support of women, youth and people with disabilities,” Busa said.—Sapa

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