BLACK business lobby groups have described the appointment of former Vodafone executive Rob Shuter as CEO of MTN as a “serious blow to transformation”.
On Monday, MTN announced the appointment of Shuter as Sifiso Dabengwa’s replacement from July 2017.
Dabengwa resigned in November after MTN was slapped with a $5.2bn fine for breaching subscriber registration regulations in Nigeria, also the company’s largest market. The fine was later reduced to $1.7bn.
Black Management Forum (BMF) president Mncane Mthunzi said on Wednesday Shuter’s appointment contributed to the steady decline in the number of black South Africans in leadership positions in the corporate sector.
“The BMF’s position is informed by the clear reversal of black representation in top JSE-listed companies. There is a general unwillingness for transformation at top management level, which has resulted in the decline in the number of black South African CEOs,” Mthunzi said.
He also said MTN was a “proud export of SA across the African continent and beyond; hence its appointments are of high importance.” MTN operates in 22 countries in the Middle East and Africa.
However, MTN said Shuter’s appointment followed an “extensive global search for a candidate suited to the demands of the group’s future strategy.”
The company had also made several executive and nonexecutive appointments at group and SA level. Godfrey Motsa, a former Vodacom executive will become vice-president for South and East Africa. New nonexecutive directors include Paul Hanratty, of Old Mutual, and Nkululeko Sowazi, of Kagiso Tiso Holdings.
Mthunzi said MTN could put forward reasons “it argues to be valid for the appointment of its new CEO; however, the company would undoubtedly agree that it has squandered a good opportunity to reaffirm its commitment to transformation”.
Prior to this appointment, MTN had demonstrated “exemplary leadership” by successively having black CEOs, he said. The last time MTN had a white CEO was in 2001.
Black economic empowerment commentators Duma Gqubule and Black Lite’s Ajay Lalu also criticised Shuter’s appointment.
Gqubule told Sowetan that the appointment “defies belief as the telecoms industry has many competent black people”. He called on the Department of Labour to adopt mechanisms to monitor transformation in JSE-listed companies.
Mthunzi said the BMF would engage with MTN’s shareholders including the Public Investment Corporation (PIC) “on their expected role and moral obligation for the appointment of black CEOs and executives in general. These companies are owned by the public and yet they do not reflect the demographics of our society”.
PIC management said in a statement on Tuesday that it “noted” Shuter’s appointment along with other executive and nonexecutive directors, and was hoping that these would “strengthen risk management and governance” at MTN.
This is not the first time that the BMF has complained about the lack of transformation in the top echelons of SA’s foremost listed companies.
In December, the BMF said it was dismayed at the move by Sasol to appoint Bongani Nqwababa and Stephen Cornell to the positions of joint presidents and CEOs.
The BMF said at the time that the move exposed Sasol as not having a “thoughtful succession plan with individuals who could assume CEO responsibilities independent of others”.