OPINION | Dear Old Mutual, Allan Gray: We need to talk about transformation

Polo Leteka-Radebe (Supplied)
Polo Leteka-Radebe (Supplied)
  • The financial services sector has had ample time to effect transformation but has chosen not to.
  • The demographics of the economically active population in South Africa are 78% African Blacks; but White employees occupy 66.5% of top management positions.
  • Directors and shareholders must be visibly supportive of diversity initiatives and be seen to walk the talk.


Is it too cold to make a clarion call that the financial services sector should be radically transformed to become a vibrant, and globally competitive industry that reflects the demographics of South Africa?

Not at all.

Despite more than two decades of effort through policy papers and even legislation, this sector’s notoriously closed white and male networks continue to permeate many companies. They are not in a hurry to redress the wrongs and legacy of the past.

The financial services sector has had ample time to effect transformation but has chosen not to and simply pay lip service to calls for transformation of the sector to reflect the demographics of this Rainbow Nation.

Latest appointments

After all, how would one explain the appointment of Iain Williamson as Chief Executive Officer of Old Mutual, Duncan Artus as Chief Investment Officer at Allan Gray, both white men, and the Eskom Provident Fund seeking to appoint a white person as the new chairman to lead its Board of Trustees?

In all these entities and many others, the appointments made and proposed unfortunately do little to narrow the diversity and ethnicity gap and by extension, the transformation gap in corporate South Africa.

This has been a recurring theme for many years. This is disingenuous and unjust.

Commission for Employment Equity report

Let me put this matter of demographic representation in the financial services sector into perspective. Last August, the Commission for Employment Equity released its 19th report on Employment Equity. The results of the report reflected an enduring gap between the national demographics and representation in key decision-making roles.

According to the report, the demographics of the Economically Active Population in South Africa are 78% African Blacks; 10% Coloured; 9% White and 2, 7% Indian. In analysing the actual data however, the Commission reported that in relation to top management positions, White employees occupied 66, 5% of the positions; followed by 15% Africans, 10% Indians and 5% Coloured.

Lack of progression of black candidates

The mismatch in employee assistance programme representation versus top management representation is glaring. In this context, top management is regarded as a proxy for critical decision-making.

The mismatch in demographics, therefore, implies either a lack of progression of black candidates within the management pipeline, or an inability of organisations to put together roadmaps aimed at ensuring their own demographics indicate some correlation with the national picture.

It is of course not the intention of this statement to say that perfect correlation is expected between the employee assistance programme and the management picture, but the glaring picture indicates that the desired roadmap that would assist in narrowing the gap – at least on a national level – doesn’t actually exist.

Acute gender gap

A secondary, but equally important, point stated in the Employment Equity Report, was that in the top management positions mentioned above, the gender gap was even more acute than the racial gap.

Despite making up 45% of the Economically Active Population, women made up just 23% of the top management positions. This type of underrepresentation in critical decision-making, is not only an affront on women but also has implications for businesses and the larger economy.

In its May 2020 report on the benefits of diversity in the workplace - - following up from similar reports in 2015 and 2018 – - McKinsey reports that companies that are in the top quartile in terms of gender diversity, were 25% more likely to experience ‘above-average’ profitability than peer companies in the fourth quartile.

In relation to ethnic diversity; the outperformance between the two quartiles was 36%. This then provides illustrative data on the business case for diversity and inclusion. But more importantly, for a country like South Africa – where the arc of history materially influences the curve of progress – the case for inclusivity and diversity need not be bolstered by references to McKinsey.

Righting the wrongs of our past

Rather, it is a national imperative that finds its soul not only in the universal acknowledgment that transformation is an important instrument of righting the wrongs of our past, but also finds constitutional expression through the various legislative measures that have been implemented since 1994.

The tragic reality, however, is that even with the existence of such instruments, the progress remains lethargic at best and actively resisted at worst.

We at the Association of Black Securities and Investment Professionals, a lead activist for black professionals and black businesses in the financial services sector, are concerned that natural, organic succession plans have seen people like Williamson and Artus assume their current positions failed to live up to the transformation imperative in the country.

Constrained by strategic inertia

As a result, the change in the number of women and black professionals being appointed to positions of authority remains constrained by past practices and strategic inertia. The hard reality, however, is that such a state of affairs is quite simply no longer sustainable.

We live in a country with immense opportunity and a deep history of racism. Like other countries, our Rainbow Nation has a flaw in its societal fabric. In other nations it is religion, class, caste and colour. Here it is race.

It is a pity that opponents of transformation are saying "enough is enough". They say there comes a time when every one of us must begin to be judged based on criteria that do not include race, ethnicity, physical capabilities and gender.

The truth is the basic tenets of transformation involves providing opportunities for those locked out historically, with a serious attempt to establish a level playing field.

Embracing diversity

Having failed with the implementation of Broad Based Black Economic Empowerment scorecards and policy, all we can do is to embrace and accept that diversity is a life and professional philosophy, one that touches on the psychological impact and success and culture of a workplace.

From my point of view, there are indeed many benefits to planning for, creating and maintaining a diverse workforce let alone executive management team that represents the demography of our nation.

A diverse executive management serves to build loyal employees and long-term loyal customers and ultimately the reputation of an organisation.

I understand that a diverse workplace culture doesn’t just happen. It also goes beyond creating a diversity policy — developing a culture must be planned.

So, how can an organisations such as Old Mutual, Allan Gray go about this? I believe that the board of directors and shareholders must be visibly supportive of diversity initiatives and be seen to walk the talk. They should stop and look at the leadership team and ponder if it reflects the customer base and community and focus on creating a management team that reflects the diversity of the nation, employee and customer base.

If South Africa is to achieve true transformation and growth in the financial services sector, we need the courage to create conditions that make it entice people to come out of their comfort zones and venture onto the critical path of transformation.

Polo Leteka-Radebe is President of the Association of Black Securities and Investment Professionals and Chairman of the Financial Sector Transformation Council.

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