Clewlow blown away by harsh winds of change
January 28, 2007
By Mzwandile Jacks
Johannesburg - It is hard to summon much sympathy for Barloworld's outgoing chairman, Warren Clewlow, and his cohorts, as the diversified industrials group undergoes painfully public changes at management level.
Barloworld has been among the most profitable companies in South Africa, and many of the all-white executives have achieved their greatest profits as the company performed impressively year after year.
In the year to September, the company paid a total of R58.6 million to 10 executive directors and eight non-executive directors after giving them R51.6 million in the previous year.
Barloworld has produced a seven-year record of headline earnings per share, growing at a compound average of 20.4 percent a year with revenue growth averaging 13 percent annually.
Despite this, the board failed to transform the company's management team and make it representative of all of South Africa's population groups. Although the 13-member board had three black non-executive directors - Dumisa Ntsebeza, Selby Baqwa and Bongi Mkhabela - it has never had a black executive director.
This is strange, considering that Clewlow criticised South Africa's implementation of black economic empowerment (BEE) in early 2005, making him the first corporate leader to do so.
Clewlow said BEE was developing in a cynical manner, adding that some businesses were buying off a few politically influential individuals wanting to provide a "veneer of legitimacy" to claims that shareholder and management patterns were changing.
Many would have thought that he would introduce a different and better form of BEE at Barloworld because he was unhappy with the kind of transformation that was being practised.
But he sang a different tune towards the end of last year. "The enhancement of economic participation of black people is not confined to ownership and wealth at the top of an organisation, but takes place at various levels of the organisation," Clewlow wrote in Barloworld's latest annual report.
He added that this year would see a number of changes in the board and management structures of the group. It is not clear why this would only be taking place in 2007, 20 years after Clewlow recognised the need for the implementation of genuine transformation at the upper echelons of the company.
But his response to this will not make any difference, because Clewlow resigned this week as chairman of Barloworld. He did not want to take any questions from the media at the annual general meeting (AGM) because he had a flight to catch.
His announcement came shortly after Brian Molefe, the chief executive of the Public Investment Corporation (PIC), Barloworld's largest investor, launched a furious assault on Barloworld's lack of transformation and contempt for shareholders. PIC has a 17 percent shareholding in Barloworld.
In the days before the meeting Molefe made no secret that Clewlow would be toppled. Stressing that the PIC preferred discreet talks with management to flexing its muscles in public, Molefe said the talks with Barloworld management had started in October, but that the PIC had been told to be patient while suitable people were being prepared.
The crunch came last month, Molefe said, when Clewlow's son-in-law was appointed to replace outgoing chief executive Tony Phillips.
Clewlow's resignation turned this year into springtime for black senior managers and well-connected black executives at Barloworld. They have for many years been overlooked for senior positions at executive management level. The company had 10 executive directors and none of them was black. It also had eight independent directors and only three were black.
When Clewlow announced his retirement at the AGM, he also said that Dumisa Ntsebeza, the well-known Pan Africanist Congress activist, would be interim chairman of Barloworld.
Ntsebeza is a well-known lawyer and was a prominent political activist during the dark days of apartheid. He was also appointed a commissioner on the Truth and Reconciliation Commission.
When Ntsebeza spoke at the AGM this week, congratulating Clewlow for having successfully led the company for 23 years, it became clear that the leadership of the company would soon change.
Ntsebeza said: "My name is Dumisa … and it is an honour to succeed you. When journalists ask whether I'll be able to fill those shoes, I will simply tell them that I would not like to step into those shoes because he [Clewlow] wears ugly shoes."
This was a loaded statement, which, coming from an experienced lawyer like Ntsebeza, could mean anything. No wonder Clewlow frowned slightly and there was no hearty round of applause from the 120-strong group of investors that had filled Barloworld's auditorium in Sandton this week.
Isaac Shongwe, a senior executive in the logistics division, was appointed chief executive of Barloworld Logistics Africa. He will join the Barloworld board as an executive director.
Hixonia Nyasulu, a director at petrochemicals giant Sasol, will be an investor in Barloworld's proposed empowerment deal through Ayavuna Women's Investments.
It is indeed springtime for Barloworld's senior black directors. Barloworld has made a confident and impressive start to this year. Clewlow is reeling from the winds of change blowing through the company.
As chairman of the board, he presided over the appointment of Nyasulu. In early 2005, he said BEE should be primarily aimed at developing and giving opportunities to "our people of hitherto untapped talent". Many will ask if the appointments of Ntsebeza and Nyasulu fit this description.
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