It could be that BEE is fatally flawed by its own restrictive legislation

If there is one person who can answer this question objectively, it is Jenny Cargill. She began her career as a writer and is continuing in this vein with the recent publication of Trick or Treat – a candid look at BEE, subtitled Rethinking Black Economic Empowerment.

In a way, the lonely life of an author has always been on the cards for Cargill.

Her first taste of leadership was as the head girl of her school, where the choice of leader was a democratic process with the scholars making the choice – as opposed to being dictated by the teaching body.

But Cargill describes herself as a very unconventional leader, using her powers of persuasion to carry people with her rather than any
charismatic flag waving.

She sees the most important quality of a leader being the ability to win the unconditional respect of the led.

This sense of the unconventional followed her, and rather than pursuing the usual route of student, wife, mother – as was the norm for so many of her schoolmates – Cargill succumbed to wanderlust and travelled the world after matriculating.

Having breathed deeply of the democratic ethos of Europe in the 1970s, she returned to South Africa with an even deeper commitment to seeing the democratic process work on this continent.

Joining the ANC seemed to the best way to make that commitment work and, as such, Cargill had to go into exile for her own safety. Here, again, her leadership qualities were recognised and she was placed in a command unit that directed the ANC’s underground activities from Zimbabwe. So, once again the fusion of the leader and the loner were able to assist her.

Leading an underground resistance movement is vastly different to the conventional tactics of the manager or leader in a business or in an open form of government. In that situation, the contact with one’s subordinates is restricted to a minimum to maximise the safety of all personnel.

But Cargill had to convey a sense of caring and an ability to offer security as her subordinates were putting their lives in danger on a daily basis. Overt communication under the circumstances could indeed have been life threatening.

Despite the constant personal danger and the stress that she had to endure, she still had to keep those who reported to her together as a unit and to get them to stay motivated when there was absolutely no way of knowing if or when the organisation would succeed in its objectives. It was, says Cargill, a period of “unusual leadership”.

But in the early 1990s, all that changed. She returned to South Africa to reconnect with colleagues who had been operating underground either in South Africa, in exile or in prison, and they had to learn how to run a country.

Once settled back in Johannesburg, she decided not to pursue political position, but returned instead to her earlier profession of economic journalism – but nevertheless reflected for a long time on what it meant to be part of a liberation struggle, as a film (Memories of Rain) was made on her life underground.

From there, she went on to initiate BusinessMap at the time of South Africa’s first democratic elections. Cargill describes it as a “think tank” where the processes of transitional economics, BEE and state restructuring could be debated and moulded, harnessing the energies of the diverse minds and personalities involved in the cauldron of South Africa’s fledgling democracy.

It looked at the economic and political risks associated with policies and procedures and at how to maximise the potential being offered to South Africa by major investors, while keeping an eye on the ball of redistribution of wealth.

As BusinessMap became the central receptacle for BEE knowledge, Cargill found herself increasingly asked to advise corporations on their BEE transactions. This created a conflict between the independence of BusinessMap as an information group and its advisory role.

Cargill and her partners then decided to split the company, placing the research and publications arm into a not-for-profit foundation, with her moving into a consulting space. This gave her what she always seeks – new challenges and much more to learn about.

In those early days of BusinessMap, Cargill had built a reputation that later opened the doors to the large deals of the blue-chip corporations – quite a feat for a small company when this is usually the domain of the investment banks. It was in this capacity that Cargill was able to put the BEE processes under the microscope.

She feels it is unfortunate that what has become known as BEE in South Africa has in many ways been hamstrung by its own legislation.

In essence, BEE policy relates to business, with a pervasive impact on company relationships and operations. It is divorced from other facets of socio-economic transformation, such as education, land reform and development more generally. Yet, the success of BEE is integrally linked to something such as education: How does business meet its employment equity obligations if the government does not meet its education responsibilities?

Cargill is concerned about the resort to old formulas to deal with transformation and puts a case for thinking afresh. By illustration, she looks at land reform.

The government hopes to free up land for redistribution by encouraging white farmers to relocate to other African countries which are keen for our farmers, as they have the ability to turn around the dismal farming conditions in many African states. But, South Africa will increasingly require such farmers as climate change threatens to decimate production levels. Surely, there is another way of achieving land reform which is not a zero-sum game, says Cargill.

“An important precursor to finding better solutions is getting people talking again. As the world grapples with climate change, the idea of finding ‘unaccustomed harmony’ among our diverse interests is taking root,” she says. “Equally, South Africa needs a new basis for co-operating. If that could happen, there would be no need to relocate.”

The objective of BEE always has been an equitable redistribution of the country’s wealth, but it has to be realised that ownership is only a single element of the process; it is not the be-all and end-all of the approach, nor does the redistribution of ownership herald the success of BEE.

In many cases, it is simply the opposite, as the current legislation does not offer or imply any incentive to be a productive owner. This is a major reason so many BEE companies have failed to deliver on expectations – the essential supports of ownership (expertise, responsibility and accountability) have not always been transferred with ownership itself.

That is also a reason that many companies prefer to look at doing BEE deals with their existing staff rather than looking for outside assistance. Typically, these lead to far more professionally run consortia.

Cargill points very enthusiastically to the experience of Bhutan in southern Asia, where the concept of Gross National Happiness is a measurable part of economic and political policy.

The Bhutanese model seeks to balance material well-being with spiritual, emotional and cultural needs of an individual and society. The idea is rapidly gaining credence in the aftermath of the 2007–2008 financial crises, the full effects of which may not have been felt yet.

To concentrate only on economic well-being has critical and fatal flaws, and has been the currency of policy for far too long. It stands to reason that where a society (such as South Africa) has “pervasive poverty”, as Cargill describes our situation, there has to be a focus on an equitable personal income to sustain life. But, beyond that, equality of income may not necessarily lead to happiness or lack of dissent.

The idea of Gross National Happiness looks deeper: the stability of personal relationships, the state of one’s health and sufficient economic resources are all factors that lead to a sense of contentment. The lack of these, or when they are threatened in any way, can result in the exact opposite.

Cargill’s ability to lead where the situation requires it, but also being able to remain detached and critical, has resulted in her balanced approach to the questions that beset South Africa today.

She sees the levels of uncertainty in our society as a crack in the structure which, if left unaddressed, will make it difficult to deal with the big issues, such as social inequality and environmental degradation.

Factors such as the problems of transitional government and the experiments with restructuring; economic uncertainty and the consequent effects on personal well-being; health threats such as the pervasiveness of endemic diseases like HIV and tuberculosis, all have a destabilising effect on our society.

Cargill points to the similarities between South Africa and Vietnam (which she visited while researching her book), as both countries seek to come to terms with the legacy of a colonial past, the deprivations of a protracted struggle for liberation, and the quest for a credible and sustainable policy for future growth.

It is through dialogue with countries and communities which have shared similar experiences and learning from each other’s mistakes that, hopefully, the formula for a positive growth in the Gross National Happiness in South Africa will emerge.

So, in answer to the question posed originally, Cargill feels that BEE has not worked in achieving its objectives of redistributing both wealth and creating productive black business in the country. It is in urgent need of a critical reassessment.

The extent to which it is a process that can be addressed by government policy; or the extent to which it can be left to take its normal course – as has been met with some success in Vietnam – will only become evident if the current experiment is allowed to admit its fundamental shortcomings and if there is sufficient commitment to correcting these, even if it means existing legislation has to be scrapped and (if necessary) replaced with an
alternative policy.

Whichever way it goes, South Africa requires reluctant leaders such as Jenny Cargill to prod, stimulate, police and cajole in order to get the ball rolling and to ensure that it eventually crosses the desired goal line. ▲

John Doolan