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

 

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Following the end of apartheid, some joined corporate South Africa and the small handful 

of blacks who had worked as managers in predominately white corporations during 

apartheid.  Others became entrepreneurs, forming both investment holding companies 

and operating companies.

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  Like their first black president, many of these new black 

business executives see business as a catalyst for social change.  Nelson Mandela made 

the following remarks at an ANC conference:  

 

The wider, and critical struggle of our era, [is] to secure an 

acceptance and actualisation of the proposition that while capital might be 

owned privately, there must be an institutionalised system of social 

accountability for the owners of capital.  In this context, it may very well 

be that the success of our strategy for Black Economic Empowerment 

[efforts to increase the participation of the previously disadvantaged in the 

mainstream economy] will address not only the objective of the creation 

of a non-racial South Africa.  It might also be relevant to the creation of 

the system according to which the owners of capital would, willingly, 

understand and accept the idea that business success can no longer be 

measured solely by reference to profit.  According to this thesis to which 

we must subscribe, success must also be measured with reference to a 

system of social accountability for capital, which reflects its impact both 

on human existence and the quality of that existence.

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In this paper, we examine this trend through the lens of the experiences of an 

individual business person, Irene Charnley.  She is a member of this emerging class of 

black businesspeople who aspire to be architects of new South Africa that embraces 

Mandela’s vision.  She has become a champion of black economic empowerment (BEE), 

a movement aimed at integrating blacks into the mainstream economy.  She believes that 

business should play a proactive role in creating economic opportunity for those at the 

bottom of the economic and social pyramid. 

Charnley started life at the bottom of that pyramid and now finds herself at the 

top. She represents a distinct minority in her country, a black woman director and 

business executive. But Charnley is not alone.  The number of emerging black business 

people is growing, albeit too slowly for her liking.

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  She and others in her cohort are 

                                                 

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 For a discussion of the experiences of black businesspeople, see W. Luhabe, Defining Moments: Experiences of Black 

Executives in South Africa’s Workplace. Pietermaritzburg:  University of Natal Press, 2002. 

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 N. Mandela, 1997 ANC National Conference, Mafikent, Northwest. 

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In South Africa, there were four general race group categorizations: White, African, Indian, and Colored—the latter 

three were collectively referred to as Black.  Charnley was classified as colored because her ancestors came from more 

than one race group. We have included a racial identifier of individuals in this case as they are introduced.  We find that it 

is difficult to think through the complexities facing the workforce in South Africa without having that information. 

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attempting to establish a “gentler capitalism”

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 in their young democracy, one committed 

to improving the lives and livelihood of the poor and marginalized in South Africa.

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This paper will describe the socio-economic context of post-apartheid South 

Africa in which Charnley finds herself.  Attention is given to the BEE movement, in 

particular the work of the Black Economic Empowerment Commission (BEECom), an 

umbrella body representing eleven black business organizations of which Charnley was a 

commissioner.  The BEECom was formed as a vehicle for black people to craft their own 

vision for BEE, a process that these black business leaders believed had been 

conceptualized and controlled principally by what was referred to as “established 

business”  (i.e., white businesspeople who headed the major corporations).  Irene 

Charnley and her colleagues who served on the Commission did not believe that market 

forces alone could rectify the structural inequality found in South Africa.  Instead, they 

contended that each sector of society had a role to play, including the new aspirants, 

black business leaders.   

Of course, theory is one thing, implementation is another. Thus, we portray in 

some depth Charnley’s efforts (e.g., tactics, sequencing) to fulfill the mandate of the 

BEECom in transforming a multinational telecommunications company.  The cornerstone 

of her leadership approach is the advancement of marginalized groups through 

employment, skills transference and leadership development. We conclude by identifying 

some of the key questions raised by the natural experiment underway in South Africa of 

using business as a tool for ameliorating societal inequalities. While this paper attempts 

to highlight and frame key issues worthy of contemplation, we warn the reader in 

advance that we provide no definitive answers to these quandaries.   

Legacy of Apartheid 

 

In 1948 the Afrikaners (descendants of Dutch and French immigrants who had 

fled their country in the face of religious persecution) created “apartheid” (or “apartness” 

in Afrikaans) by passing legislation that formalized the segregation in South Africa that 

had begun with the British in the late nineteenth century.  The Afrikaners carefully 

defined the physical attributes of each non-white racial group, and delineated the rights 

and privileges accorded to each group.  They divided the population into four groups – 

one white and three “black” groups: Indians, coloreds (mixed race and Malays), and 

indigenous peoples (generally referred to as “Africans”).   Whites were accorded the most 

rights, followed by Indians, coloreds, and finally Africans. Political representation, 

property ownership, freedom of movement, and employment were restricted for all black 

groups, resulting in limited meaningful participation in the formal economy.  Hendrik 

Verwoerd, the prime minister from 1958 to 1966, articulated the underlying philosophy 

of apartheid: 

                                                 

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 As George Lodge has reminded us, the term “gentler capitalism” can be misleading.  As readers will see, Charnley and 

other of her ilk engage in tough tactics to produce a capitalism whose effects are gentler. See G. Lodge & C. Wilson, A 

Corporate Solution to Global Poverty: How Multinationals Can Help the Poor and Invigorate Their Own Legitimacy. Princeton: 

Princeton University Press, 2006.  

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 Dr. Iqbal Survé, one of the individuals we are profiling in our research, coined the phrase “gentler capitalism” in our 

first interview with him.   

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