BUSA Study Finds Pace of Transformation in SA Inadequate

A 2011 independent study commissioned by Business Unity SA (BUSA) shows continues low representation of black people and black women in particular, within JSE listed companies.

The study, “A Snapshot of the Demographic Profile and Pace of Transformation of JSE listed companies” is the second such survey commissioned by BUSA in two years.

Key findings of the study show the following:

  • The overall percentage of black people was at 25.3%, well below the 50% target set in the Codes
  • Black executive directors account for 9.5% of  executive directors, while black non-executive directors stood at 27.6% – the target for each is 50%
  • The percentage of black independent non-executive directors was 38.1% compared with a target of 40% – indicating that this target has been met
  • Black chairpersons account for 22%; black CEOs for 6.9%; and black CFOs for 7.9%  – again, the target for each is 50%
  • The percentage of black female directors was at 10.2%; black female CEOs at 1.2%; and black female chairpersons at 3.9%
  • White males account for the majority of senior positions on the JSE: 52% of all board positions, 72% of executive directors, 51% of chairpersons, 76% of CEOs and 76% of CFOs

An analysis of the findings showed that JSE companies have disappointingly taken the path of least resistance, appointing black people to non-executive rather than executive positions. In executive positions, less that 10% of all CEOs and CFOs are black. Critically, the study found that it is unlikely that this deficit is only related to the a lack of skills within the black community as the shortfall of executive directors is only 322, while on the supply side there are more than 5500 black chartered accountants in South Africa.

On employment equity, the study found the level of representation of all women to be “disturbingly low” on the boards of JSE companies, particularly in the role of chairpersons and executive directors, including CEOs and CFOs. For black women, this situation is even more dire: black women comprise 40% of the economically active population (EAP), yet the percentage of black women on all boards is only 10.2% compared with a target of 25% in the BEE Codes. Even though black women far outnumber white females (5.5% of the EAP), white women outnumber black women by a ratio of almost 2:1 in executive positions.

Compared to the 2009 survey, the study found an increase in black representation (6.7%) and black female representation (14.6%) on the boards of all JSE, and a decrease in the number of white and foreign directors (4.9%). These findings indicate an improvement in transformation for JSE-listed companies as a whole. However, for the top 40 JSE companies, the study found that transformation had regressed: since 2009, there has been a decline in both black (10.1%) and white directors (2.4%).

The study recommended that government, companies and BUSA all play a role in ensuring that South Africa meets its transformation objectives:

  • The study recommended that the Department of Trade and Industry develop the capacity to monitor the implementation of transformation at all levels on an ongoing basis, and create a structure and reporting mechanism similar to the annual state of transformation report produced by the Commission for Employment Equity.
  • The recommendations for companies included:

–       The size of decision-making structures be increased to create space for the appointment of designated groups, particularly black people, women and people with disabilities

–       The EXCO should be one of the feeders for developing future board members

–       That an enlarged EXCO could include deputies for critical positions such a CEO and CFO who could be groomed to assume increased responsibilities

–       Measures to facilitate and accelerate the process of board transformation: stipulating a retirement age for board members and introducing limits on the number of boards a director can sit on

–       That retired board members become mentors to new board members

  • BUSA should support the role of board transformations by developing programmes that would, for example, support further research to monitor transformation on an ongoing basis, develop a database of potential board candidates and/or develop training programmes for future directors.


While BUSA notes the overall improvement in transformation across all companies listed on the JSE, the current pace of transformation is inadequate. The BEE Codes of 2007 set interim targets of 50% for black board members and executive directors to be reached by 2017, with black women comprising 50% of these targets.

Four years after the enactment of the Codes, our study shows improvement in some groups: black board members (25.3%), non-executive directors (27.6%), independent non-executive directors, and deputy chairpersons (29%). In contrast other groups, black women in particular, show very little improvement: black CEOs (6.9%) black executive directors (9.5%), black female CEOs (1.2%) and black female executive directors (2.4%).

As this study indicates, the lack of representation in not due to a deficit of qualified black professionals. With only six years left before the targets must be met, time is running out for companies to take proactive steps to shape their representation for the future. We urge them to do so.

Transformation of the economy is one of BUSA’s core objectives. We believe it is fundamental to achieving an inclusive, growing and employment-creating economy. As the apex business organization in South Africa we will continue to monitor, support and encourage our members to actively contribute towards economic transformation objectives of the country.


Leave a Reply

Your email address will not be published. Required fields are marked *