Issue: May 2005
Editorials

FIRST WORD

South Africans should guard against a form of censorship as pernicious as under apartheid. It is the self-censorship of political correctness. The point is illustrated by the way Archbishop Desmond Tutu was shot down for having suggested that an element of sycophancy was undermining the vigour of public debate. The point is nevertheless well taken. Freedom of expression is diminished when people feel inhibited to express their views by second-guessing the response. In a society where political correctness is pervasive – even High Court judges are affected – it's often safer to shut up.

This is one reason that Today's Trustee has adopted the policy of not always identifying the authors of articles.Where no bylines appear, they are the responsibility of the publication alone. In any case, the proliferation of bylines is a relatively recent media practice. For years, many periodicals used them sparsely. To this day, such publications as The Economist don't use them at all. Often, their purpose is obscure unless the identification of an individual contributor has informative value. It backfires when arguments are assessed not on their merits but on who makes them.Winston Churchill once observed of parliamentary speeches that members would ask three questions:Who spoke? How did he speak? What did he say? Only if there was interest in the answer to the first question would the second question be asked, and only if there was interest in the answer to the second would anybody bother to ask the third.

An example, from the first edition of Today's Trustee, was in the un-bylined "Scramble for Africans". Essentially, it contended that there was no broader empowerment base than investors in retirement funds.Were their institutional money managers to be active shareholders on their behalf, the objectives of corporate transformation could be achieved without the effort and expense of creating an advantaged class.

Would this proposition have been greeted differently if its advocate had been identified as (a) a white person, (b) a black person, (c) a liberal, (d) a radical? We all know the answer because, in our present conditioning, our basic instinct is to compartmentalise.What the answer should be is that it doesn't matter.

A fortunate consequence, however, has been the response (published elsewhere in this edition) from a large retirement fund. It meticulously quantifies the amount by which its lower-income members are subsidising a particular BEE transaction. Taking the same principle across a host of similar transactions, it can make a significant difference to the ultimate retirement benefit of fund members, including millions of workers.

The reality is that they have no choice because nobody explains and nobody seeks their approval. But give them the choice – of advancing transformation by shareholder activism or by shareholding dilution, of having bigger pensions or smaller – and the BEE dynamic can quickly be infused with a populism to temper the elitism.

"It would also be useful for our fund management industry, as well as trustees of our pension funds, to begin to take a more active role in discharging their responsibilities on our behalf in transforming these (South African) companies."

– Thabo Mbeki


"It would also be useful for our fund management industry, as well as trustees of our pension funds, to begin to take a more active role in discharging their responsibilities on our behalf in transforming these (South African) companies."

The speaker can be identified. It was President Thabo Mbeki, addressing the launch of the Public Investment Corporation (PIC) last month. "Institutional investors are positioned better than anyone of us to protect the value of the JSE investments of ordinary people as well as to promote the corporate transformation that will allow for meaningful participation by black people in the South African economy," he said.

Quoting extensively from economist Joseph Stiglitz – that boards of directors were usually nominally elected by shareholders, that they could only be replaced with "massive rebellion" and that some outside directors were more concerned than anything else to please the chief executive who appointed them – Mbeki wanted to emphasise that "the transformation of our country is a collective effort".

It meant, he said, that shareholders should be more engaged in all processes: "As part of ensuring rapid transformation, perhaps what is required is some form of alliance of shareholders among institutional investors so that common standards and rules of engagement can be set." Expect the PIC to take the lead. Mbeki "suggested" it. Through the fund-management industry, once virtually untouchable, "good corporate governance, adherence to the charters and general transformational challenges" are about to get another prod.

Allan Greenblo
Editorial Director