Black Economic Empowerment business leaders who succeeded in the past predominantly through political clout rather than entrepreneurial initiative are no longer regarded as iconic, according to a new study of leaders in South Africa by the Reputation Institute South Africa.
The survey conducted among economically active people and called the RepTrak Leader South Africa 2012, rates the leadership qualities of the top business, political and Black Economic Empowerment (BEE) figures in South Africa.
The survey found that there had been a huge shift in the reputations of BEE business leaders from similar surveys conducted previously.
Mining magnate Patrice Motsepe achieved the highest score in the survey with 64.56, while BEE leaders Cyril Ramaphosa, Tokyo Sexwale and Saki Macozoma were placed 13th, 15th and 16th in the survey respectively with scores of 55.54 (Ramaphosa), 54.75 (Sexwale) and 54.74 (Macozoma).
In overall second place was General Secretary of the Congress of South Africa Trade Union’s Zwelinzima Vavi (61.17). Deputy President Kgalema Motlanthe, with a rating of 59.93 was overall third, with MTN’s Chief Executive Officer Sifiso Dabengwa (59.38) and SAB Miller’s CEO Graham Mackay (59.31) in fourth and fifth places respectively.
Reputation Institute South Africa’s Managing Director and Senior Lecturer in Strategy at Wits Business School, Dominik Heil said: “In previous surveys, BEE leaders were overall seen as iconic, and as a vivid demonstration that the ordinary person could make it to the ‘top of the pile’.
“Whereas this is presumably still true for Patrice Motsepe, the prominent players in the BEE space who are seen to have gotten there predominantly through political clout rather than entrepreneurial initiative are no longer regarded as proxies for people’s aspirations and are now in the middle of the spectrum.
“Despite their philanthropic initiatives they have failed to convince the public that their involvement in the economy has helped to build a more equitable society or has benefitted South Africans at large. This provides an opportune moment for a new conversation about making Black Economic Empowerment work for those in real need of empowerment,” Heil added.
The survey was conducted over a period of several weeks in January and February 2012. A sample of 1,304 economically active people provided 3,647 ratings.
All those surveyed were LSM6 and above, had some level of education, and lived mostly in Gauteng, KwaZulu/Natal, Western Cape and Eastern Cape. In order to qualify to participate in the survey respondents had to be “somewhat” or “very familiar” with a leader to provide a rating.
Respondents were asked to rate the country’s top politicians, business leaders and some of the most prominent BEE players.
The business leaders chosen to be surveyed were the CEOs of the top ten listed companies in South Africa, while the politicians listed in the survey were the top echelon of government as well as the leaders of the main political parties.
BEE leaders surveyed were chosen after a combination of a preliminary qualitative research on top-of-mind familiarity about beneficiaries of BEE deals, and a Google search on number of mentions of these candidates to verify their prominence.
With an average score of 49.4, politicians in South Africa performed better than other world political leaders (who scored 43.20 in a similar survey in 2011), while South African business CEOs, with an average score of 55.68, fared worse than the global average for business leaders of 59.80.
Heil said that the Reputation Institute conducted this study to give an informed baseline to the debate about the kind of leadership that is needed in South Africa in order to achieve a shared vision of society.
“It was interesting for us at Reputation Institute to see that overall there is no strong inherent bias for or against political or business leaders as such and that you could find people of different sectors, gender and races at the top, in the middle and at the bottom of the pile,” said Heil.
“It needs to be borne in mind that this is a perceptions study and not a study of the managerial qualities of CEOs and politicians. It is however an important aspect of any leader not just to fulfil their managerial tasks but also to manage perceptions in the public and among stakeholders appropriately. South Africa comes from a long history of leaders who are holding themselves accountable to cliques rather than society at large.
“This is further pronounced in South Africa where economic and political power is highly concentrated in the hands of a relatively few players. This puts leaders on the one hand into particularly prominent positions and, on the other hand, gives them a role that tends to have a huge influence on many individuals, stakeholder groups and the entire nation. Any failure to manage perceptions appropriately reflects back on the organisations they lead and has significant consequences for their ability to deliver on their mandate and strategic objectives.”
Among the qualities that influenced survey participants in their rating of leaders, the strongest driver was that of being “a strong and appealing leader”. Second most important driver was that of “creating value”, while “making South Africa a better place” was rated third. “Communicating effectively” was the least most important driver.
In the context of the current debate on CEO remuneration there seems to be no inherent bias against well paid or rich leaders. The issue seems to be rather whether business leaders contribute to value creation in a way that justifies their financial reward.
“Those leaders who have done well in the survey seemingly demonstrate a good understanding of the space that they occupy in society and are perceived to occupy it with vision, integrity and in a way that earns respect, even if people don’t agree with everything they say or do,” Heil said.
Reputation Institute has in the past done research on the most admired business leader in South Africa. This year, more extensive research, based on the notion that that the core of reputation is an emotional bond, was conducted. The degree to which this emotional bond is determined by certain aspects of leadership was also tested.
The ratings of all those surveyed in terms of respondents’ emotional connections to leaders was as follows: