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MTN CEO choice 'serious blow to transformation'

Staff Writer
By Staff Writer
Johannesburg, 23 Jun 2016
By appointing Rob Shuter as CEO, MTN "squandered a good opportunity to reaffirm its commitment to transformation", says the BMF.
By appointing Rob Shuter as CEO, MTN "squandered a good opportunity to reaffirm its commitment to transformation", says the BMF.

The Black Management Forum (BMF) believes MTN's appointment of Rob Shuter as group CEO and president is "a serious blow to transformation".

The BMF said in a statement that MTN's failure to appoint a black CEO signals transformation is not a business imperative, "which is disappointing".

The BMF also says the appointment contributes to the steady decline in the number of black South Africans at the leadership helm.

"The BMF's position is informed by the clear reversal of black representation in top JSE-listed companies. There is a general unwillingness for transformation at top management level, which has resulted in the decline in the number of black South African CEOs," according to BMF president Mncane Mthunzi.

The forum says MTN is a proud export of SA across the African continent and beyond, and its appointments are therefore of high importance.

"MTN may put forward reasons it argues to be valid for the appointment of its new CEO; however, the company would undoubtedly agree it has squandered a good opportunity to reaffirm its commitment to transformation. Prior to this appointment, MTN had demonstrated exemplary leadership by successively having black CEOs," Mthunzi adds.

On Monday, MTN announced the South African, currently CEO of Vodafone's European cluster, would take over the role left open when Sifiso Dabengwa resigned as CEO in early November 2015. Shuter will only take up the role as soon as it is practically possible in 2017 but not later than 1 July 2017, after completing his contractual obligations at Vodafone.

Dabengwa resigned two weeks after the company announced it faced a $5.2 billion (R76 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 (R57 billion) and on 10 June, after months of negotiations, MTN agreed to pay $1.671 billion (R24.4 billion) to the federal government of Nigeria ? in six instalments over three years to settle the fine.

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.

The BMF says it is "disheartening" the decision to not appoint a black leader to replace him was made by a board of directors "with the majority of black people and under black chairmanship".

"The lack of thoughtfulness in dealing with matters of succession in these companies is appalling," the forum adds.

"The BMF will also engage with the Public Investment Corporation and other shareholders of reference on their expected role and moral obligation for the appointment of black CEOs and executives in general. These companies are owned by the public and yet they don't reflect the demographics of our society," Mthunzi concludes.

When MTN announced Shuter's appointment, it said he would bring experience and new insights to the CEO role, having had many years in the telecoms sector in Africa and Europe "as well as in banking where his expertise will help as MTN continues to develop its new business strategy".

Shuter has been CEO of Vodafone Netherlands since April 2012, and in October 2015, his role was expanded to include the other European countries, excluding the four large European markets: UK, Italy, Spain and Germany. He started his career as an accountant with Deloitte in Johannesburg before moving into the banking sector and working for both Standard Bank and Nedbank, then joining Vodacom as financial director.