SA’s top management is set for at least another decade of slow transformation, with very few new faces representing diversity in terms of race and gender expected until at least 2015.

 

“While top companies are increasingly ensuring that their general workforce reflects the country’s demographics – in line with both ethical and legal requirements - the faces at the very top will continue to look the same for many years and, more likely, even the next decade,” says Debbie Goodman-Bhyat, MD of Jack Hammer Executive Headhunters.

 

Senior executives are still being cut from the same cookie cutter with 95% of the top positions filled by white males, nearly 60% of whom are over 50, and close to 70% of whom have degrees in finance.

 

This has been revealed in a new study on top executives in South Africa, which shows a stereotypical CEO still exists in South Africa despite the significant push towards greater racial and gender equity.

 

The Jack Hammer Executive Report which was created in order to debunk myths around executive appointments and create an informed view of SA’s business leadership landscape, provides interesting insights into the C-suite, and is intended to become an annual measure of the changing face of top executives in SA.

 

The study which has created a clear identi-kit of the typical CEO, pulled together free-floating facts and statistics garnered from 80 top companies in South Africa. They comprise SA’s top 40 JSE listed companies as measured by market capitalisation as well as 40 leading corporate businesses from the broader industry, dubbed the ‘Broad 40’.

 

Debbie Goodman Bhyat, MD of Jack Hammer Executive Head Hunters says that the issue is not that business is loath to transform, but rather about companies’ perception of the risks of appointing non-traditional CEO’s who don’t fit the previously cast mould and might be seen as mavericks or outliers.

 

“It is no secret that there is some unhappiness about the slow pace of transformation and while good intentions abound, boards remain very risk averse, particularly in tough economic times.

 

 “Neither the decision makers, nor shareholders they are accountable to, like change. No one seems to want to shake up the status quo, for fear of a negative impact on the bottom line. Instead corporate employment decisions revert to default positions rather than making bold new moves to change those at the helm in top corporations.

 

“The general feeling is that we have progressed a great deal since the introduction of broad black economic empowerment policies. However, the snapshot our researchers have gleaned shows little progress has been made at the top echelons of South African business.

 

“Making the top appointment is one of the most intricate decisions especially in an age where accountability and transformation are crucial. The right information and insights are imperative as it takes things out of the realm of gut feel and guesswork”, she says.

 

The figures show that 15% of the Top 40 CEO’s are black, 5% are female and the vast majority have a degree in finance and at least one post graduate qualification. By expanding the view to the Broad 40, the picture is similar with only 13% black and 10% female.

 

Interestingly not many foreigners head the top 40 companies in SA – one of the corporate myths that can now be debunked. In the Top 40, 85% of the CEO’s are South African and among the Broad 40, 77% are South African citizens. 

 

Unsurprisingly, every top executive has at least one university degree and the MBA remains the most popular postgraduate qualification among this group, with 25% of  the top 40 CEO’s, and 20% of the broad 40 CEO’s having earned these. However, the CEO’s in the Top 40 have a significantly greater number of masters and doctorate degrees – 28%, versus only 11% in the broad 40.

 

Aside from the vast majority holding degrees in finance, 17,5% hold Mining and Engineering degrees, and 5% have a degree in Geology 5% . Only 1% has made it to the corner office with a Marketing degree.

 

The research shows among the top 40 group, not one of the CEO’s are younger than 40, 22% of them are under 50 and 20% are over 60 years old.

 

 “Among the larger corporations, significant experience (and by implication, age) is non-negotiable due to the levels of complexity and scale inherent in running such organisations. In the broad 40, age is less of a definer, with 62% of the CEO’s being below 50 years old, only 25% in their 50’s and 7% in their sixties.

 

“Among the Top 40, younger, more energetic and innovative executives may be overlooked in favour of a steady, older hand. There seems to be a reluctance to take a chance on a leader with ‘potential’. Instead, boards want tried and tested performers, and are more willing to forfeit supercharged outperformance, if it means that they can minimise potential downside risk,” says Goodman-Bhyat.

 

“Not surprisingly, 55% of these top executives have held their positions for longer than 5 years.  Among the top 40 companies, change is lot slower. These companies are big enough to accommodate several moves by a leader before reaching the CEO role and once there they tend to hold the position for at least a 5 year period, and sometime longer. 

“There seems to be shorter tenure in the broad 40 companies with nearly 50% of the incumbents having held their position for less than 3 years.”

 

The majority of executives from both groupings are married and have children and regularly play sport. Interestingly the top 40 executives overwhelmingly favour organised team sports such as cricket and tennis while within the broad 40, individual competitive sports are favoured such as cycling, running and golf.

 

“It is interesting that 75% of all the top leaders participate in sport, many of them at very competitive levels including marathons. Many proudly list their participation in endurance sport events such as Iron Man contests among their achievements, “ she says.

South African CEOs and MDs can no longer get away with not being digitally savvy: a new survey shows more than 90% of companies expect their head honchos to be up to date with the latest advances in the digital and social media space, as the online environment becomes more critical to sustaining a successful business.

 

According to Jack Hammer Executive Headhunters, which polled firms in the traditionally conservative financial services, engineering, FMCG and manufacturing sectors, nearly all assume that the Head of the organisation will at least have an understanding of the importance of digital technology for the company, even if they personally do not engage in online or social media.

 

“Your CEO might not tweet or even have a Facebook account,” says Debbie Goodman-Bhyat of Jack Hammer, “but he or she must be far-sighted enough to see the potential benefit of these channels for the business. Obviously some industries are more likely to engage with such media but the days of ignoring the online space as ‘irrelevant to our core business and customers’ or ‘for the youngsters’ are over. As more and more South Africans get connected to the Internet and share information, so there are more and more chances for a company’s reputation and market share to be made – or broken.”

 

She strongly cautions against handing over your company’s digital presence to “a junior who seems to know they’re doing because they spend all day on their iPhone.

 

“You wouldn’t make someone straight out of school with Matric maths your CFO, so don’t fall into the same trap when it comes to your social media. There are numerous brands which had to put expensive PR campaigns in place to win back customers because an inexperienced person was at the helm of their social media accounts. There are seasoned professionals who are intimately familiar with the opportunities and challenges of the online environment - and they should be recruited into your strategic communications mix.

 

“Before hiring someone to drive your social media strategy (either internally or as an outsourced agency partner), make sure you’ve cut through the digital jargon, and have fully understood the individual’s background, their track record with similar initiatives in the past, and the impact, scope and cost of the project or strategy they are recommending – the same fundamentals you would use for any other strategic hire”, cautions Goodman-Bhyat.

 

“It’s quite easy to get swept up with the hype of new media and to feel compelled to participate in costly digital campaigns purely because ‘everyone else is doing it’. Just as a traditional Marketing Executive is expected to demonstrate a business case and tracking measures for marketing expenditure, so too the Online Strategist should have the skills and experience to do the same.”

 

Goodman-Bhyat says executives need to see digital media as “word of mouth… on steroids. News of great customer service or a poor product can spread within seconds and reach some of your most desirable clients and consumers. Many local companies have been burnt because they underestimated the power of social media. What you and your team took years to build up could be harmed within minutes if you don’t have a comprehensive digital media strategy and competent manager in place.”

 

And while reducing their business insights into 140 characters may be intimidating to some MBA graduates who run million-dollar multinationals, she points out that more and more CEOs and MDs are taking the plunge – and building up loyal followings at the same time.

 

“Visionaries like Bill Gates (Microsoft), Richard Branson (Virgin), Jack Welch (General Electric) and Martha Stewart (Martha Stewart Living) all maintain lively Twitter profiles. Even Zwelinzima Vavi, the secretary-general of Cosatu, has taken to the twittersphere.

 

“Modern consumers expect to have two-way conversations with brands via Facebook, blogs, forums, Twitter and even YouTube. As the head of the brand, you need to ensure that your team is empowered to harness these channels. With CEOs and MDs getting younger – the Jack Hammer Executive Report for 2012/13 shows that the youngest South African Top40 company CEO is only 41 - the time when PAs printed out emails and took down dictated responses to them is truly past!”

 

International surveys show that consumers who engage with brands digitally spend more than those who don’t. Research by The Economist Intelligence Unit shows that at least two-thirds of the organisations achieving the highest returns reported that their C-suites are “active advocates” of social media.

 

“Think of it as another way of getting more people to be loyal to your brand – the more loyalty, the better your bottom line,” says Goodman-Bhyat.