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

 

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As required by the government, MTN established an employment equity plan in 

1998.  The government mandated that company’s racial profiles were to ultimately mirror 

the racial profile of the “economically active population.”  To prepare the document, 

MTN developed targets for each racial group in each department and at each level of 

management.  The company modified the targets where necessary to create space for 

whites to still be hired and promoted in an effort to ensure that the company was 

perceived as a good employer for all racial groups.  There was a shortage of skilled 

information technology (IT) workers.  In the late 1990s, developed economies around the 

world were importing IT professionals from countries such as India and South Africa. In 

South Africa, the end of apartheid and some of the attendant changes exacerbated the 

situation.  To escape the violence in South Africa and earn salaries in a more stable 

currency, significant numbers of South Africans were electing to leave the country.

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Foreign jobs were particularly attractive to young, white workers who, unsure of their 

prospects in their home country, often chose to establish their careers in countries where 

whites did not fear reverse discrimination.     

Johnnic appointed Charnley to chair MTN’s board.  She sat on three of the board 

subcommittees, the Investment and Strategy Subcommittee (ISC), the Human Resources 

and Remuneration Subcommittee (HRRS), and the Regulatory Subcommittee.  As one of 

the hoped for delivery channels of the content produced by the other Johnnic companies, 

MTN was to play a pivotal role in Johnnic’s strategy to capitalize on the synergies 

between media, entertainment, and telecommunication.  Charnley was charged with 

delivering MTN’s cooperation.  As a black woman with little experience in business and 

no experience in the telecommunications arena, Charnley assumed she would be 

challenged at every step.  And as one MTN executive observed, she was coming into an 

organization in which many members of the top team had “three degrees behind their 

names.” 

In her first months in her new position, Charnley immersed herself in the MTN 

organization, freely contacting and talking with staff throughout the organization about a 

wide range of topics from the very tactical to the strategic.  Many MTN executives were 

surprised by the depth and style of Charnley’s engagement with the organization.  Some 

took time to grow accustomed to Charnley’s take charge, no-nonsense style while others 

immediately respected it.  In particular, her frank criticism had the potential to create 

misunderstandings.  One white colleague remarked, “Sometimes people take her 

criticisms personally instead of realizing it’s an issue-driven thing.”  However, others 

appreciated this trait. Another white colleague noted, “I would consider her to be 

completely and utterly a woman of integrity, in the sense that there is no game playing 

and you always know where you stand.”   Still another noted that Charnley was in a 

difficult position because of the racial and gender “subtext.” Many people acknowledged, 

even some of those uncomfortable with her hands-on style, contended that since Charnley 

wanted change to happen quickly, her approach was probably necessary.  As one 

executive remarked, “With our structure, a lot of things didn’t happen in this company 

without people putting their fingers in.” 

                                                 

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 Although estimates of “white flight” range widely, trusted estimates suggest that 6.45% of South Africa’s 4.4 million 

whites left the country between 1991-1995, 7.38% left between 1996-2000, and 3.15% migrated between 2001-2003. See 

Mid-Year Population Estimates Report 2005, Statistics South Africa, May 2005, p 6. 

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As Charnley developed a sense of how things worked at MTN and felt that 

progress was being made, she became less involved in operational issues and focused her 

attention on what she saw as four interrelated strategic priorities for MTN.  First, the 

company’s core South African market was maturing and new growth areas needed to be 

identified and developed.  Second, MTN needed to accelerate its expansion into Africa.  

Third, MTN was key to Johnnic’s synergy strategy.  MTN needed to be convinced that 

cooperation with Johnnic’s print and media companies would be good for them as well as 

for the rest of the Johnnic group.  Fourth, MTN needed to embrace BEE and bring more 

black people into the company at all levels. Although approximately fifty percent of 

MTN’s employees were black, less than a quarter of the managers and almost none of the 

senior team were black.   

While for the purposes of this article, we will focus on Charnley’s efforts with 

regard to the fourth priority, it is important to note that Charnley emphasized all four 

priorities.  She understood that an empowered, but unprofitable MTN would be of no use 

to anyone.  Furthermore, Charnley saw the priorities as interrelated.  For example, when 

Charnley joined MTN there was a perception that the marketing strategy was not 

adequately addressing South Africa’s black population which comprised 89% of the 

population (see Exhibit 4 for country demographics).  Charnley, and others in the 

organization, struggled to enlarge people’s vision of “the possible.”   To Charnley, this 

issue was critical because the perception was that MTN’s rival, Vodacom, was clearly 

marketing to the black market and had already captured a larger share of the black market 

than had MTN.  Charnley felt that the company had a long way to go in developing the 

expertise and sensibilities necessary to attract and retain black consumers.  She believed 

that having more black professionals and executives in the company could help accelerate 

the learning.  Charnley provided an example of the debates within the company: 

 

We had to decide whom we wanted to sponsor. Did we want to 

spend money on soccer, which targeted the majority of the population, or 

rugby, which targeted a smaller, predominately white, section of the 

population.  Should we give money to a rural school, or give money to 

sponsor the rugby team of the most elite school in South Africa?  People 

failed to recognize that the black market represented a huge potential 

future market. A lot of companies have begun to change—you can find 

more black people in advertisements—but we have not moved quickly 

enough in that direction. 

She encouraged the executive team to develop products and services that would meet the 

needs of the underserved black community (for instance, billing procedures that did not 

require customers to have a bank account).   

 

Selecting, Retaining, and Developing Black Talent

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MTN’s approach to employment equity included three distinct, but not mutually 

exclusive policies and practices:  Affirmative Action, Employment Equity, and Managing 

Diversity.  Affirmative Action focused on increasing the representation of designated 

                                                 

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 For more detailed information, see MTN Group Employment Equity Plan, 1998. 

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