The Directors Event in South Africa for 2019 - Executive Summary

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5th edition of SA’s biggest board meeting calls for more accountability from leaders SA’s biggest board meeting, an annual event which seeks solutions to some of the country’s many challenges, took place recently in Sandton. The Directors Event is presented in association with the prestigious Sunday Times Top 100 Companies Awards, the Institute of Directors (IodSA), and futured by BCX. Welcoming this year’s board members, Sunday Times editor, Bongani Siqoko said The Directors Event provided an ideal platform to debate the many challenges facing the country including poverty and growing inequality as it grapples with the after-effects of years of sustained corruption. It’s only through cooperation between the public and private sectors that SA can grow, he said.

However, more than just dialogue between the public and private sectors, The Directors Event needs to result in concrete action plans mapping out how SA can grow beyond the 2019 elections, urged Jonas Bogoshi, CEO at BCX. A subsidiary of Telkom, BCX provides end to end digital solutions.

Acknowledging the critical importance of innovation in an increasingly digital age, Bogoshi announced the establishment of the BCX Digital Innovation Award in conjunction with the Sunday Times Top Companies Awards. Two awards will be made at this year’s Sunday Times Top Companies Awards to be held later this year including the Disruptor award and the Incremental Innovation award. For more information on these awards visit www.bcx.co.za This year’s chairman’s report was delivered by Phuti Mahanyele-Dabengwa, Executive Chairperson of Sigma Capital and a trustee of the Cyril Ramaphosa Foundation (previously known as the Shanduka Foundation).

Emphasising the importance of education, MahanyeleDabengwa said the Cyril Ramaphosa Foundation had prioritised educational initiatives and to date had

Chief Justice Mogoeng Mogoeng

made significant contributions to effect real change in education. The foundation works in around 450 schools and has helped numerous students to access tertiary education.

Referencing the Ninja generation (no income, no jobs and no assets), she said the reality was that neither the public nor private sectors would be able to absorb all school leavers, which made the creation of an entrepreneurial culture so vital.

While the Cyril Ramaphosa Foundation has adopted a number of meaningful models, Mahanyele-Dabengwa urged board members to become involved in education initiatives and to make their own meaningful difference.

He questioned how we choose leaders and who qualifies to be a leader. Leaders should not be chosen from the ranks of those who have resources or for their connections but rather because they have the necessary skills to address the many problems facing the country, he insisted.

It is the president who appoints heads of state owned enterprises, and those heads who in turn determine who they are surrounded with. Just one rotten apple, said Mogoeng, taints the whole. “We owe it to ourselves and to prosperity to only appoint the best to positions of responsibility.”

This year’s keynote address was delivered by Chief Justice Mogoeng Mogoeng who questioned how SA had jettisoned its value system to the extent that corruption was allowed to flourish and resulted in a degeneration of the country’s debt levels.

He said candidates for leadership positions should be required to meet stringent requirements before even being considered and should be subjected to much greater public scrutiny. “We need to be asking the hard questions of our potential leaders so that we get the best to lead us, not only those who have the means,” he said, adding that once voted into power these leaders should feel accountable to their voters.

Mogoeng said SA’s election process was fundamentally flawed. “It matters who becomes president of the country, who becomes a premier, a cabinet minister or a mayor,” he argued.

Mogoeng called for a reflection on how political parties are funded, particularly during elections. Political parties may need to be funded by tax payers, he suggested, so that the public would be accounted to.

“SA’s election process was fundamentally flawed. It matters who becomes president of the country, who becomes a premier, a cabinet minister or a mayor ”

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Securing SA’s future through youth employment and entrepreneurship This year’s The Directors Event grappled with the issue of youth employment and the promotion of entrepreneurship in order to better secure South Africa’s future.

While unemployment drives inequality, the reality currently is that when it comes to youth unemployment we have to run just to stay in the same place, pointed out panel moderator Thabiso Tema.

There are a number of initiatives in place to address the issue of youth employment. The Youth Employment Service (YES), as an example, is a business-driven initiative in partnership with government and labour, which aims to create one million jobs for the youth.

A registered not for profit organisation, it focuses on previously disadvantaged youth and provides work experience for one year, allowing each participant to demonstrate their abilities, establish their work ethic and prove their worth.

YES CEO Dr Tashmia Ismail-Saville explained that YES advocated for a policy change to the codes of good practice to reward businesses for employing youth. It delivers appropriate training content to the youth via a zero-rated mobile phone.

Phuti Mahanyele-Dabengwa, Executive Chairperson, Sigma Capital

The current system encourages favours in return, he noted, adding that “money speaks”.

very active civil society, pursue good governance and servant leadership.

SA needs public servants who are not perceived to be beholden to anybody. And while the country has an abundance of good plans in place, too few are implemented. We need to appoint implementers, he said.

Now in its fifth year, The Directors Event brings together leaders and key decision-makers from the public and private sector to seek solutions to some of the country’s many challenges. The event attracted an audience of senior management and C-level executives as industry leaders unpacked the major issues affecting the country’s economy during three moderated panel discussions.

“We thought once democracy was in place that the rest would fall into place,” Mogoeng said, adding that as a country we have lost our self-respect, integrity and ability to be accountable.

Mogoeng called on South Africans to focus on what could unite us rather than what divides us and to find solutions to the issues that divide us.

We need to have the hard conversations, he said, and reject greed, embrace generosity, be a mobilised and

Mandisa Ntloko-Petersen, Chief Marketing Officer at BCX, says: “The Directors Event is a not-to-be-missed event on South Africa’s calendar, offering a platform for dialogue and action that deepens democracy and promotes South Africa’s social, economic and political development. As BCX, we are a strong supporter of South Africa and this is why we chose to partner with The Directors Event.”

Big Brands Media designs and implements programmes that support the development of the youth through various initiatives aimed at instilling a culture of responsibility and unlocking opportunities. CEO Lebogang Ramodike explained that the organisation addresses issues on the ground through master classes and working groups. It works with organisations such as the Girl Child network to help girls from social grant backgrounds as well as traditional and community leaders.

The Entrepreneurship and Cooperative Development, Services SETA, meanwhile, does not implement training and development but instead works as a bridge between training and the world of work. It offers a number of initiatives within its programme of action including offering business advisory services, funding and enabling access to reliable services.

One way to deal with youth unemployment is to promote entrepreneurship, said Liesel Köstlich,

Executive Manager of Entrepreneurship and Cooperative Development at, Services SETA. Employment, she said, can be a pathway to entrepreneurship and entrepreneurial competence can be taught.

She conceded that not everybody has the appetite or aptitude for entrepreneurship, but given a viable concept and a going concern they were more likely to succeed. Köstlich said the Services SETA was aware that entrepreneurs needed different things at different stages of their life cycles, including business incubation sites that provide real and ongoing support and more support for youth with viable business concepts.

“There are successes and failures and we need to measure impact and root cause, and solve for the root cause. Critically, we need to do all this fast and at speed,” said Köstlich.

While SETA’s are in the process of researching the gap between available skills and what skills are required, she urged corporates to proactively engage with their communities and local schools with regard to the qualifications they need.

An impediment to success as an entrepreneur is a lack of work experience. It’s hard to start a business if

“The psychology of running a business is even more important than technical knowledge such as financial management”

of previous experience. The bank has partnered with YES to provide youth work experiences, acknowledging that the next generation of the work force must have the requisite skills.

you’ve never worked in a business before, conceded Ismail-Saville. Exacerbating the situation is the fact that 56% of youth don’t have a matric certificate and have low confidence in their abilities as a result.

Is SA focusing sufficiently on the transition of the youth from dependence to employment, questioned Gcina Mtengwane, a lecturer at the University of the Free State. He argued that many internship programmes leave participants feeling disempowered and called for a standard structure which matched intent to outcomes.

“The psychology of running a business is even more important than technical knowledge such as financial management,” she said. YES’s solution to this problem has been to build an app which helps prospective entrepreneurs to navigate the world of work and how to run a business.

Big businesses are frequently accused of not doing enough to address the youth unemployment problem.

Chief operating officer of Nedbank, Mfundo Nkuhlu, said the single biggest impediment to the youth is lack

Admitting that there is no silver bullet to the growing problem of youth unemployment, Nkuhlu said any solution needs to be medium to long term. At the same time the education system needs to be reformed and the curriculum amended to better prepare the workforce of the future.

Despite the numerous initiatives in place to address the plight of the unemployed, more can be done, including better information provided to work seekers and a platform to connect work seekers to employers, he said.

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Digital transformation: Will inclusive technology innovation develop SA’s economy?

There has been much talk in recent years on digital transformation but to what extent is this transformation accessible to all South Africans – and is it even good for us - was a question posed to a panel of experts at The Directors Event.

making a growing number of people redundant; while issues around trust and privacy is causing significant stress in society. Digital illiteracy, he added, is disempowering. In spite of this, Armstrong said technology is a means to reducing inequality.

The TIA is a fairly recent agency of government, established in 2010, which uses grant funding to develop technologies towards commercialisation. In addition to a profit motive, the agency focuses on making a positive societal impact.

The speed with which society is transforming from a digital perspective is perhaps the most significant element, impacting and affecting even those living in the most rural areas, pointed out Tembinkosi Bonakele, Commissioner of the Competition Commission South Africa.

Digital technology is changing the mechanism whereby challenges are being addressed and solved, said Nyari Samushonga, MD at WeThinkCode, a company which partners with businesses to provide digital skills. She said digital literacy within organisations was imperative.

The challenge in the SA context, however, is how to successfully implement digital education given the country’s struggles to implement traditional education.

He said SA needed to be intentional in terms of its adoption of digital technologies and think about the social consequences of any technology beyond a profit motive. “There are 4.2 million people in SA who spend their days collecting water, firewood and dung,” he pointed out.

Not only has competition disrupted numerous industries and sectors but from a competition perspective, he said, it’s leading to situations where the winner takes all – or at least takes the most – and the losers completely miss out. By way of illustration he pointed out that the largest firms in the US in the early 2000s were all oil giants. Their positions have been usurped in recent years by digital companies. Bonakele pointed out that the biggest penalties awarded in the EU have all been against protecting monopoly positions from incoming challengers.

While he considered digital disruption good for competition, Bonakele said the caveat was that Internet access and access to technology and infrastructure needs to be equal and equitable. SA, however, is plagued by inequitable access to technology which perpetuates inequality.

From a corporate perspective, Vish Rajpal, chief of IT Solutions at BCX, said learning would be the key differentiator going forward. “For all employees, irrespective of age, their ability to learn, relearn and unlearn, will be indicative of their value to the organisation,” he said, that adding that those who can’t do that will become a hindrance to their organisations.

There is increasing compelling evidence indicating that the Fourth Industrial Revolution (4IR) is good for business, said Prof Brian Armstrong, Adjunct Professor at the Wits University Graduate School of Business Administration. Digitally transformed companies, he said, deliver better customer experiences; are more likely to survive given that they tend to outperform their competitors; deliver more shareholder returns; and deliver more revenue and profit than less digitally orientated companies.

However, while digitalisation is good for business, it’s also affecting society profoundly, explained Armstrong.

The waves of change are coming faster than society is able to adjust leading to increased alienation and dysfunction; it is changing the nature of work and

Samushonga called on company management and even board members to take responsibility for better understanding technology. “They need to educate themselves and become literate in terms of technology so that they can adopt responsible practices,” she said.

Digital technologies are not neutral, commented Garth Williams, Research Specialist: Intelligence at the Technology Innovation Agency (TIA). They create big changes and significant disruption. He argued that the term Fourth Industrial Revolution (4IR) was a recent construct of the World Economic Forum, and was influenced by political systems and commercial constructs.

“Digital technologies are not neutral. They create big changes and significant disruption.”

Earlier this year the Department of Science and Technology, in partnership with the World Economic Forum’s Centre for the Fourth Industrial Revolution Network, established an Affiliate Centre to prepare SA for the 4IR. The centre aims to bring together business leaders, governments, start-ups, civil society, academia and international organisations to co-design and pilot innovative new approaches to policy and governance in the 4IR. The centre, explained Williams, intends to connect disparate initiatives and entrepreneurs to local hubs where they can better grapple with the challenges of the 4IR. One of the results of a more digital world is the availability of increased data on consumers. Bonakele pointed out that the fact that many companies rely on this data to provide them with a competitive edge over their competitors is problematic.

A possible solution to this is the democratization of data and engendering a school of thought that there is more value in co-creation and sharing of information in order to create new business value and improve lives, suggested Rajpal.

Politics and the economy SA’s politics, the economy and what to expect post the 2019 elections came under the spotlight during a panel discussion moderated by Siki Mgabadeli.

the right people, rising above party politics and acting in the national interest. SA, said, Coovadia, no longer has the luxury of time to keep spinning the wheels pointlessly.

A high-level panel of experts agreed that SA is currently in a state of crisis: a crisis of politics, economics and confidence which is hampering any potential for economic recovery.

Tshediso Matona, Secretary of Planning at the National Planning Commission, agreed that it was time to press the reset button given the very difficult space the country is currently in. There is widespread acknowledgement that the country is at a precipice and the only way it can go forward is if business and civil society come to the table and partner with government. The president’s SONA identified the right issues to be addressed, he maintained.

Providing context to SA’s current situation, Professor André Duvenhage, Political Science Professor at North-West University said the country was in a very challenging situation, particularly given the general state of decay within local government, municipalities and state-owned enterprises. This state of decay is having dire consequences for service delivery. Factional in-fighting within the ruling governing party, the ANC, is exacerbating the situation.

The ANC’s struggle narrative no longer works and needs to be adjusted, he said, calling for the country to make a fresh start and develop a new paradigm to take SA forward. He said President Cyril Ramaphosa needs to consolidate his position as it appears the so-called Zuma faction still have significant influence given the individuals appointed to head up various portfolio committees.

SA has the ability to achieve a so-called ‘high road’, he said, but only if all stakeholders played their part in acting in the best interests of the country and implemented policies and took action.

Despite the criticism President Cyril Ramaphosa received for his vision during his recent State of the Nation address, that vision was necessary, said Cas Coovadia, managing director of the Banking Association of South Africa.

“As patriotic citizens, he urged all South Africans to stop skirting around the issue of the crisis the country finds itself in. This is a society in turmoil which seems to have lost its values and become immunized to what’s happening.”

If there was a world cup of planning, SA would win hands down, commented Mgabadeli. But how does the country go from being really good at planning to being really good at implementing, an area in which it has traditionally not excelled, she asked.

He agreed with Duvenhage that the country is in crisis, pointing out that both agriculture and mining – sectors which traditionally are creators of jobs – saw decreases in the last quarter. According to the Auditor-General’s latest report into the performance of municipalities, more municipalities have regressed in terms of their performance and are now classified as ‘dysfunctional’.

In many ways government is broken, conceded Matona. It doesn’t have the money to pay for much needed infrastructure required to underpin the growth of the economy. Given the state of government the burden would fall on the private sector to work together in very practical ways. He said he was pleased the National Development Plan, a plan which had the support of all political parties, had been re-asserted, and said there was interest in seeing the National Economic Development & Labour Council (Nedlac) reinvigorated to fulfill its mandate.

“This has been the longest continual trend of poor business confidence since 1947,” said Coovadia. As patriotic citizens, he urged all South Africans to stop skirting around the issue of the crisis the country finds itself in. This is a society in turmoil which seems to have lost its values and become immunized to what’s happening, he said.

“Until we address the political crisis we’re unlikely to fix the confidence and policy crisis,” pointed out chief economist at Alexander Forbes Investments, Isaah Mhlanga. And until these issues are addressed the private sector, which requires assurances that its investments are safe, will shy away from investing in the country.

Coovadia called on leaders to recognise this crisis situation and make some hard trade-offs and compromises. It’s got to be all about growing the economy now which requires a president to lead as the president, with the best interest of the country first and foremost.

He said those in the political sphere were not sufficiently appreciative of the extent to which their internal dynamics impacted the economy and neither did the country have the right people with the right skills in the right jobs at a governmental level. “We need people who can show vision and who can implement that vision,” he said, adding that a lack of accountability at all levels of government was of significant concern.

Responding to a question regarding whether the country was putting too much pressure on President Ramaphosa to deliver the new dawn that he promised, Coovadia said the president had the legitimate vote of the people. His priorities need to be dealing with the critical issues, surrounding himself with

Policy certainty was required in order to boost confidence, as was the establishment of efficient and inclusive infrastructure,

insisted Mhlanga. He said the country’s energy crisis needed to be addressed, spectrum needs to be licensed, the education sector reformed and the role of women elevated in society. “It seems as though our leadership don’t recognise the engines of an efficient economy. Why haven’t we addressed the crisis at Eskom yet and what’s holding up the licensing of spectrum?”

The public sector needs to become a more attractive working environment if it is to attract skills but this will only happen if the political crisis is addressed and an environment conducive to growth and accountability is created rather than one where corruption and malfeasance is allowed to thrive, agreed Mhlanga and Coovadia.

Political contestation within the ruling party is the biggest obstacle to addressing the political crisis, said political analyst, Dumisani Hlophe. This contestation, he explained, is not based on policy or ideological differences, but rather on the fight for control of the party. While political contestations are not uncommon, they needed to be appropriately managed, he said. “I don’t think the current leadership appreciates the chaos this contestation creates.”

He disputed the idea that the president was an isolated individual within the ANC, arguing that the president is a product of the party and won’t act independently.

The Institute of Directors of South Africa (IoDSA), has supported The Directors Event since it began in 2015. “The Directors Event serves to highlight some of the critical issues facing our country; and business’s role in addressing these issues, as our future sustainability as organizations and as a country depends on them,” says Parmi Natesan, CEO of the IoDSA.

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