Microsoft Word 6-057 a gentler Capitalism Final version June 2006. doc

 

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Charnley explained why she felt the weekly meetings were necessary: 

 

There were black people in the organization whose confidence has 

been completely destroyed.  People withheld information.  People wanted 

them to fail.  They were undermined around every corner.  You had to be 

strong to put up with that stuff.  And the black employees knew they could 

stand up and challenge things because they had the support of the board.  

They knew that I was there to monitor, police, and make sure that things 

happened.  Because when you are out there, it's like being in the battlefield 

and you are absolutely alone, and there is nobody protecting your back.  

But, if you know you are out in the battlefield and there is somebody 

behind you who is able to spot that person who is going to kill you, then it 

is better.  That’s the way we had to operate until things warmed up.  That 

is the situation we are still faced with. 

In her meetings with black hires, Charnley did not simply affirm her support for 

them.  She held high standards for them and made her expectations clear: 

 

I said to people, “You have to work extra hard, and if you’re a 

woman you have to work even harder.  When people sleep, you work.  

You have to be the best.  People must respect you.  And they must be 

oblivious to color because of what you deliver.  When you don’t deliver, 

they say black people are incompetent.  We’ve had good black people who 

have quit because they couldn’t take the pressure.” 

While most companies in South Africa were not moving as quickly as MTN in 

changing the demographic composition of their workforce, Charnley concluded that 

management was not consistently delivering on empowerment promises: 

 

When you want to do something with empowerment, generally 

people will say they will do something because they think you will never 

follow up.  But, in time, they realized that doesn’t work with me because I 

will close every loophole.  Perhaps management would agree at a board 

meeting that fifty percent of the people working in our African operations 

must be black.  We would ask what their target date was for achieving that 

goal, and they would say six months.  Well, six months later I would 

check back and say, “What have you achieved in Cameroon, in Uganda?”  

And they have achieved nothing; they have hired only whites.  You have 

to be prepared to take people head on because they will think of every 

trick in the book when it comes to empowerment. 

I started managing and putting pressure to such an extent that 

people ended up saying I was racist, that I didn’t want white people.  I 

said, “This is not a black and white issue.  It is an issue of giving 

opportunities to people to whom you have never given opportunities 

before.  It is also a business imperative.  If we don’t do it, we will be out 

of business in five years.  Because it is becoming more and more a 

requirement that black people be part and parcel of companies.  If you 

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were concerned about opportunities, you would have given black people 

opportunities before.  Instead, there were hardly any black people in senior 

positions.” 

To speed up the process of black economic empowerment (BEE) at MTN decided 

to overhaul the company’s executive bonus system; historically bonuses were indexed 

principally to annual profit.  In addition to incorporating stretch targets, and emphasizing 

the importance of key strategic objectives, the new bonus structure would index a portion 

of the bonuses of the senior managers at MTN to their employment equity targets. 

Charnley and the Human Resource director proposed that 45% of the bonus be based on 

achieving financial stretch targets, 35% on achieving ten strategic objectives, and 20% on 

achieving employment and procurement equity targets.  Charnley did not think senior 

management would like any part of the bonus overhaul, but she knew there would be 

great consternation about the employment equity targets.   

Whites were beginning to fear for the security of their jobs.  One white manager 

shared his dilemma.  “I had employees coming to me, begging me to tell them whether 

they had a future with the company now that it was an empowerment company.  They 

had a right to know, and I wanted to tell them.  But, the truth was that I didn’t know.  A 

lot of it depended on whether or not we kept growing.”  At any South African company, 

racial tensions of some magnitude were to be expected.  But some white executives 

worried that Charnley’s approach may have exacerbated them. As one individual 

explained, some perceived that black employees had disproportionate access to Charnley: 

 

Five or ten powerful black executives got together in a clique.  

Cliques happened all over the company, but it was easier to identify a 

black clique.  I understood why these cliques were there.  They made 

sense in some way, but eventually they were used to gain power.  It was a 

challenge for someone like Irene to deal with.  If she was not seen to be 

outside of both cliques, then there was a problem.  And there was a 

perception in the company that the opposite was true.  It’s dangerous to 

see that certain people, by virtue of their race, may have access to Irene 

that a white person may not.  Because, as soon as you have one of the 

most powerful board members involved in a us against the rest of 

management situation, there is serious trouble for the company.  I think 

Irene has real challenges because she was very powerful to MTN then. 

White employees admitted that they were unaccustomed to negotiating racial politics at 

work.  One whit MTN executive explained: 

 

A white person has sensitivity that, if he disagrees with Irene in a 

board meeting, he will be perceived as a white male racist.  Even if this is 

not true, that is what he feels.  A white person can’t be as vocal or risk 

saying as much as a black person.  This is partially due to the sensitivity of 

the white person and partially due to mismanagement on Irene's part.  

People pretend the racial dynamics don’t exist and then go away and talk 

about them in great detail amongst themselves. 

Charnley realized the tensions her approach was creating: 

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