12
•
Business organizations should work towards unified business structures
provided there is a measurement commitment to implement BEE and to
deliver services to members.
•
Provide services to members (of business organizations) such as:
management training, small business support and the marketing of
Government programs and incentives.
•
Promote compliance with the full spectrum of labor relations policies
and legislation and encourage members to go beyond the minimum
requirements of the law.
•
Promote compliance with principles of corporate governance and
encourage members to go beyond the minimum requirements of the law.
•
Promote the development of new forms of ownership, including ESOPS
and retail schemes, affirmative procurement practices and support for
small businesses (including community and worker-owned businesses).
•
Always include women and women-owned businesses in the economy.
•
Empower local communities through procurement and programs in
communities, focused on infrastructure provision and job creation, and
as far as possible, encourage the use of local content.
39
The BEECom report highlighted emerging black business leaders thinking deeply
about the dynamics and goals of democratic capitalism. Most black business leaders with
whom we spoke voiced some commitment to improving the lives and livelihoods of the
poor and marginalized. But although the black business leaders agreed on the ends, they
did not agree on the means. Some argued that “business is simply about making profits”
and the obligation of black business leaders is first and foremost to build profitable
businesses and thereby create jobs and have the resources to engage in large scale
philanthropy. Others suggested that South Africa had an opportunity to redefine how
business is done—to provide a model of a “gentler capitalism” for the rest of the world.
Irene Charnley clearly fell into the latter camp. But of course, actions speak louder than
words.
A Gentler Capitalist in Action
40
Like her other colleagues on the BEE Commission, Charnley believed that each
black business executive had a responsibility to effect positive change in their particular
company, and that through their collective efforts they could have a powerful collective
impact on the country. By the time of the BEE Commission Charnley found herself at the
top of the pyramid, but she had come from the bottom. Irene Charnley grew up in Elsies
39
Black Economic Empowerment Commission Report, 2001. p. 7.
40
This narrative is based on data collected principally between 1997 and 2003. Much of it is also included in a series of
Harvard Business School cases, Irene Charnley at Johnnic Group (A), 9-405-059, (B) 9-403-171, and (C) 9-405-061.
13
River – an Afrikaans-speaking, Colored area
41
outside of Cape Town (see Exhibit 2 for a
photograph of Charnley). Her father was murdered when she was young, and her mother,
a domestic worker, raised Charnley and her two siblings. Like most blacks in South
Africa, Charnley and her family lived in poverty. Charnley recalled:
We never had any money. We didn’t have a ceiling in the house, so the rain
would come through. In the summer, the same leaks would sweat. Sometimes you
would be embarrassed about where you lived, a place where people were killed
every day and stuff like that. But, you learned to survive, and how to keep your
head above water. And finally, you learned how to achieve the things you wanted
to achieve.
In 1982, Charnley was one of a select group of black South Africans to receive a
scholarship to attend university in the UK. After earning a diploma in graphic arts and
reproduction from the London College of Printing, she returned to South Africa. When
Charnley discovered she was being paid a quarter of her white counterparts in her first
graphic arts position, she quit and accepted an offer to work for the National Union of
Mineworkers (NUM) in South Africa. She had met the President, James Motlatsi, and its
General Secretary, Cyril Ramaphosa, while studying in London at a fundraiser for the
anti-apartheid movement and the British mineworkers strike. Charnley recalled her
enthusiasm for the opportunity, “I really wanted to give the energies and the passion that
I had back to the people who were most oppressed in society.”
In 1985, Charnley started as a graphic designer for the NUM’s fledgling
newspaper, and soon became a key negotiator with Ramaphosa’s encouragement. Over
time, Charnley came to serve as a trustee on several of the NUM’s pensions and
provident fund boards. The assets of the NUM were substantial and Charnley and her
colleagues pressured those fund managers that serviced the funds to adopt more liberal
policies, such as hiring and providing training for black professionals. Like many of her
activist comrades this was a dangerous time for Charnley; on more than one occasion she
was detained and interrogated by the police.
Charnley’s unexpected introduction to a business career came through the NUM.
In 1996, the NUM joined with other black investors in the National Empowerment
Consortium (NEC) to purchase from Anglo American Corporation of South Africa
(Anglo)
42
a 34.9% interest in Johnnic, a passive holding company with varying stakes in
breweries, pharmaceuticals, foods, media, entertainment and telecommunications.
Consequently, this BEE deal was one of the most important in the first wave of Black
Economic Empowerment due to Anglo’s prominence (it was South Africa’s largest
company employing 130,000 people) and the lucrative assets it divested. After leading
the negotiations with Anglo for the NUM, Charnley was asked to serve as one of the
NEC’s ten non-executive directors on the fifteen-member board at Johnnic. Her mandate
41
In 1950, the South African government mandated that individuals live only with people who were the same race.
Charnley’s mother and father’s parents were Xhosa, White, Malay, and Italian respectively. However, Charnley’s parents
were classified as Colored.
42
In the mid-1990s, the company disposed of ‘non-core’ assets including those represented by Johnnic. Its core activities
were in mining gold, diamonds, platinum, ferrous metals, industrial minerals, and base metals.