Issue: September/November 09


The term “ravages of inflation” is so often used by sellers of pension products that buyers are numbed to its meaning. Here, then, is an example that can be readily understood:

In 1979, the price of a sirloin at Alan Pick’s popular Hillbrow steakhouse was R5. Today, 30 years on, the price of that same sirloin in his Sandton steakhouse is R115. Projecting similar inflation for the next 30 years, the price in 2039 will be R2 645.

Better that we gorge on cholesterol, while we can afford it, to minimise our chances of being around for so long. On present longevity projections, quite a few people aged 60 will make it to 90. A lot fewer will be able to buy steaks from their pensions.

We’d have to dream about eating them (the steaks, not the pensions), like we’d have to dream about the days when we still had teeth.

Ready for take-off, King III makes much play of independent chairmen as pillars of good corporate governance. “Independent” is taken to mean people drawn from outside the company.

Piffle, in my book. One size doesn’t fit all.

Think of Meyer Kahn at SABMiller, the succession of G T Ferreira by Laurie Dippenaar at FirstRand, or the musical chairs of the Koseff/Herman/Kantor combo in the Investec companies, and argue that their experience as chief executives doesn’t play to investors’ advantage.

Take out the guys with heavy personal stakes and what have you got? Advisors.

Like the true story of the entrepreneur (he’ll stay anonymous) who’d built an enormously successful familycontrolled business. Once listed, he was pressurised to appoint an independent chairman.

Having eventually and reluctantly done so, yet remaining as chief executive, he entered the independent chairman’s first board meeting with a salutary warning: “One wrong move and you’re out.”

What I’d preferred to have seen in King III, but couldn’t find in the draft, was a recommendation that companies pay their suppliers on time; especially small suppliers, in these times.

But perhaps the reason for its omission is that it relates merely to humble ethics, not to grandiose governance.

The problem with that quote from Karl Marx, previously mentioned in this column (TT March-May ’09) about how “owners of capital will stimulate the working class” in ways that would cause “unbearable” unpaid debts leading to the nationalisation of banks and “eventually to communism”, is that Marx didn’t write it. Nobody wrote it seriously.

It’s a Wikipedia hoax. The giveaway is in Marx’s purported reliance on “technology” for marketing of financial services to the working class. At the time of Das Kapital, the most advanced technology was the recentlyinvented bicycle.

The launch edition of Destiny Man has on its cover “Hotel mogul Sol Kerzner: ‘I’d like to be an example of how a kid from the backstreets of Joburg can be a success worldwide’”, and “Graft, greed and greased palms: What role are you playing in SA’s corruption?”.

Don’t be confused. It turns out that they’re two separate, unrelated stories.

To put pay increases in percentage terms is a big con, and for good reason. To put them in money terms, a 12% increase on a R5 000 monthly wage is much less that a 6% increase on an R80 000 salary.

The good reason is that it makes the unions look greedy and the managers frugal.

What the current market “volatility” tells us is that there’re many more horses’ asses than there are horses.