MTN has come out to defend its commitment to transformation, after it received criticism for appointing a white CEO.
“Transformation and empowerment remain at the core of MTN’s ethos and culture,” the telco said in a statement.
MTN came under fire from the Black Management Forum (BMF) last week, which called the appointment of new group CEO and president, Rob Shuter, “a serious blow to transformation”. The BMF said MTN’s choice is contributing to the steady decline in the number of black South Africans at the leadership helm in companies. MTN’s biggest shareholder, the Public Investment Corporation (PIC), also said it sharedthe BMF’s sentiment and “would have preferred a black CEO”.
The telecoms giant responded to the criticism with a lengthy statement outlining its commitment to transformation across its group operations. MTN says it employs approximately 21 000 people across its 22 operations in Africa and the Middle East. Its employees represent almost 60 different nationalities, but South African staff comprises 22% of the total group staff complement – of which 85% of the South African staff are historically disadvantaged South Africans (HDSA).
“Diversity is our key differentiator and is fundamental to our success. Consequently, our employee base has a strong bias towards local talent, as evidenced in MTN South Africa where the CEO, board and executive committee comprise predominantly HDSA persons,” MTN’s statement reads.
In addition, it says that of the 22 CEOs across its operations, nine are South Africans and five of those are HDSA.
“Over the last 22 years, MTN has been one of the standard bearers of BEE and overall transformation among the top 10 JSE-listed companies.”
It says that outside of senior HDSA appointments, MTN also enabled its staff to benefit from the growth and success of the business through a non-company and industry leading financed management ‘buy-in’ in 2006. This saw an allocation to staff members and created an owner-managed black business cadre – 72% of which were HDSA.
It also says its public BEE scheme, MTN Zakhele, has further entrenched empowerment into the business and given shareholders a compound annual return of 29%, since the scheme’s launch in 2010.
“MTN is a magnet for young professional talent in all its markets. All positions in the group are filled on the basis of the company’s needs and objectives, without compromising the medium-term transformation imperative in South Africa or any of our operational markets.”
The firm, however, says “while transformation will always be important, innovation and strategic flexibility are equally critical, given the global nature of the firm and the disruptive technological changes that are sweeping through the telecoms sector”.
MTN says recent changes to the organisational structure of the group and the appointment of key roles have been made to address identified strategic gaps within the business.
“This includes the appointment of an internationally seasoned group CEO and president, who was chosen following an extensive global and local search. Ongoing empowerment and transformation will remain one of the key deliverables of the new group CEO,” according to MTN.
MTN announced Shuter’s appointment on 20 June. He is currently CEO of Vodafone’s European cluster and will join MTN as soon as it is practically possible next year, but not later than 1 July 2017. His extensive experience in the telecoms and banking sectors in Africa and Europe were outlined as key reasons for his appointment by the group.
Shuter is taking over from former CEO, Sifiso Dabengwa, who resigned in November last year, just weeks after the company announced it faced a $5.2 billion (R79 billion) fine from the Nigerian Communication Commission for failing to disconnect 5.1 million unregistered SIM cards in the country.
The penalty was later reduced to $3.9 billion (R59 billion), and on 10 June 2016, after months of negotiations, MTN agreed to pay $1.671 billion (R25 billion) to the federal government of Nigeria, over three years.
In Dabengwa’s absence, former CEO and non-executive chairman, Phuthuma Nhleko, took over as executive chairman to lead the company until it found a successor. He led the negotiations on the MTN fine and has also played a major role in choosing the next CEO.
MTN acknowledges the group has recently faced a number of challenges, including tough economic conditions across its key markets, increased competition and heightened regulatory pressure – particularly around subscriber registration requirements.
It says while efforts have been made in the spirit of transformation in SA, the group still remains sensitive to the diverse nature of its shareholding structure – 55% global funds and 45% domestic shareholders – and operations in order to achieve its long-term vision and objectives.
“The group is proud of its transformation policy, record and trajectory, which, while varying in its depth from time to time, is informed by an emerging market vision and objective. Transformation is a broad process with many facets and not a single position or specific individual at a particular point and time, but a journey,” MTN concludes.
As of 30 April 2016, MTN had 230.3 million subscribers across its 22 operations, over 30 million of which are in SA.
Source – ItWeb