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Jse-Top 40 Boards 2011-2021: The More Things Change, The More They Stay The Same

August 26, 2021

While black women non-executive directors have a significantly stronger presence on JSE Top 40 company Boards compared to ten years ago, in 2021 white men still rule the roost at South Africa’s biggest listed enterprises.


But beyond transformation issues related to race and gender, do Boards in 2021 have the appropriate reputational nous, experience and expertise to help build, sustain and protect a company’s most valuable strategic asset – its reputation?


In March 2011, black women non-executive directors (NEDs) made up 15% of the Boards of JSE Top 40 companies. Ten years on, that figure is up 7% to 22% representativity, and not far behind the number of black men NEDs sitting on the Boards of South Africa’s biggest listed enterprises (26%). But despite a 12% decline in representativity since 2011, white men still made up 41% of NEDs at JSE Top 40 companies in March 2021.


At 10 of these Top 40 companies (as at March 2021), three-quarters or more of their NEDs were white directors – with one enterprise having a 100% all-white, all-male profile for their seven NEDs.


The gender divide within JSE Top 40 Boards in 2021 remains, however, significantly larger than the 4% gap between white and black NED representativity. Two-thirds of the Top 40 Boards consist of male NEDs, with black and white women taking just 33% of the seats at boardroom tables in 2021.


At seven of these Top 40 companies (as at March 2021), three-quarters or more of their NEDs were men – with three of these seven enterprises having a 100% all-male profile for their NEDs. This demonstrates that for some of our biggest companies, transformation does not always begin in the boardroom.


When Aprio Credence started researching NED demographics this year, we did not set out to focus on black-white, male-female representativity. As a specialist reputational risk and resilience firm, we do annual research into the published risk registers of Top 40 companies on the Johannesburg, London and New York bourses, to assess whether there is alignment between the risks that top companies are identifying and preparing for, versus the actual corporate risks and crises that make the headlines every year.


The initial hypothesis, which prompted our March 2021 research into the boards of JSE Top 40 companies was this: do the NEDs of these major corporations have the reputational acumen to adequately identify and mitigate emerging reputational risks in this new world where everyone is a broadcaster, and 30-year CEO careers can end in ignominy through an insensitive or offensive comment or tweet? Is there someone at NED level who has a proven track record in building reputational resilience and can ask the necessary tough questions in the boardroom from a reputational perspective?


A number of commentators have described it as “extraordinary” that the former Steinhoff board, with no fewer than six Chartered Accountants (CAs), could have presided over such massive fraud and value destruction. Back in 2017, respected financial journalist Ryk van Niekerk wrote: “How did alleged fraud amounting to R100bn take place on this board’s watch?…A board is ultimately responsible for the affairs of a company and in this case, there has to be aggressive accountability. An even more pertinent question is why did the board not react proactively since the first allegations of transgressions surfaced in 2015?”. This reinforces the point raised earlier, that approximately two-thirds of corporate crises can be categorised as “smouldering”, with warning signs preceding the ultimate reputational implosion.


Our research indicates that 29% of the 349 NEDs at JSE Top 40 companies have a CA or equivalent accounting qualification. Engineering qualifications are a distant second , at 16%. Economics, sciences and Law feature in joint third position, each with 11% representativity.


We have tremendous respect for the wide-ranging expertise of CAs, engineers, actuaries, economists, scientists – expertise that generally extends well beyond numeracy and so-called left-brained competencies. But as American writer and political commentator Walter Lippman said, “Where all think alike, no one thinks very much.” Or, as one of our clients remarked recently when challenged by one of his NEDs as to why they needed external advisors to assist them navigate through a reputational crisis, “Having a board where everyone thinks alike, looks alike and talks alike, is what got us into trouble in the first place.”


Of the 349 NEDs featuring in our recent research, only four had formal qualifications in marketing or corporate communications. Once again, we are not saying such qualifications guarantee reputational nous, but is it not time to look to diversify the experience and expertise of our boards, just as we look to transform the composition of our NEDs from a race and gender perspective?

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