Board transformation and EE scorecard target attainment : progress made and barriers faced with transformation by JSE listed companies in the South African Mining Industry

Abstract

The political and economic pressures for transformation in South Africa have been documented in an array of policies, pieces of legislation, regulatory and statutory frameworks, and also in governance codes for both public and private companies. Specifically for the mining industry, the Mining Charter comprises of transformation targets and measurement criteria that are presented in a scorecard to be achieved by the mining industry by 2014. Additionally, the King reports on governance have specific requirements that listed companies must meet in terms of employment equity and demographic representation to achieve board diversity and independent boards. The aim of this study was to report on the board transformation status in the mining industry, as well as the progress that has been made towards meeting transformation targets. The 2011 annual reports were used to capture profiles and composition of board of directors in Johannesburg Stock Exchange (JSE) listed mining companies. Interviews were used to gain insight on the transformation status, initiatives undertaken and challenges of transformation in the mining industry. The research findings from the analysis of board members demographic and career profiles shows that little has been achieved to ensure equal representation and diversity on the boards of directors. Further analysis of the status of transformation by JSE listed mining companies to realise transformation, shows that transformation in the mining industry is still a major challenge. Whilst some initiatives have been undertaken and some progress has been made, this study reveals that the barriers to transformation in the South African mining industry are racial issues and tensions based on colour, the lack of skills caused by the education system, a war for talent, a lack of mentorship and no stakeholder engagement between the mining industry and government