How black the board?

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 21 Aug 2007

The boardrooms of the JSE Security Exchange's Top 100 companies remain overwhelmingly white and male - and that is also the case with the four ICT companies in that bracket.

Of the 45 directors serving at MTN, Telkom, Dimension Data and Datatec, only 35% are black and 16% are women.

This is according to a study undertaken by the Landelahni Recruitment Group, an executive placement company. The aim of the survey conducted earlier this year, using 2006 data, was "to develop guidelines for the evaluation and structuring of effective boards to support business growth".

Landelahni Business Leaders CEO Sandra Burmeister says the survey shows South African boards are still ahead of the rest of their Top 100 peers, where the averages are 11% for women and 25% for blacks. It also puts them ahead of the London FTSE Top 100, where boards are on average 89% male and 98% white.

Burmeister says the ICT sample for this survey is rather small and not necessarily accurate for the entire ICT industry. However, since only four ICT companies fall into the JSE Top 100, only they were measured.

Other findings from the study are that the average board size of the four ICT companies is 11, the mean age of a director is 51 and the typical length of service is four years. The Top 100 averages are 13 for size, 50 for age, and seven for the period of service. ICT board meeting attendance averages at 94%, against a Top 100 average of 93%.

"Poor meeting attendance has come in for some criticism, but appears to have been addressed, in the Top 100 at least, since the turnout is recorded and reported," Burmeister says.

She adds that the divide between executive and non-executive ICT directors is 31% to 69%. This compares well with the mining houses and banks at 28%, consumer goods companies at 35% and 40% for the industrial sector.

Diversity questioned

Burmeister cautions that South African companies are taking too narrow a view on boardroom diversity, focusing entirely on race and gender. "Boardroom diversity is about more than just appointing people with different race and gender profiles. It's about establishing a diverse skills and experience base drawn from a variety of backgrounds, leadership styles and perspectives.

"The striking homogeneity of board membership suggests companies have not searched broadly for talent in the past."

She is also concerned about the independence of non-executive directors. "There is an interesting notion among black directors: they don't serve as independent directors on boards unless they have a direct interest in the company, usually in the shape of a BEE stake.

"We are finding this more and more. I think this is a big risk for SA. I think we need to be building a base of black leadership, of black independent directors," she argues.