Black directors now chair more than a third of listed companies


Such is the level of transformation among CAs(SA) that this year, for the first time, there is a greater number (59,1%) of black CAs(SA) than white CAs(SA) under 50 years of age serving as directors on the elite 40 JSE boards.

Overall, black directors now hold just under a third of the posts of directors of all JSE-listed companies.

These encouraging numbers are disclosed in research conducted this year by the South African Institute of Chartered Accountants (SAICA) among companies listed on the JSE and AltX boards.

According to the report, the racial split of directors is changing slightly to become more transformed, with 32% of all directors now being black. The racial analysis of directors is historically significant.

South Africa has been producing white CAs(SA) for decades, and has only in the last 15 years began to effect CA(SA) transformation at scale. It is pleasing to note that the proportion of CAs(SA) holding directorships is transforming at a faster rate than the total sample of directorships. This may reflect the leading role SAICA has played in transforming its membership viz-a-viz some other professional bodies whose transformational efforts began somewhat later, and that the CA(SA) designation naturally has more significance for board appointments.

One would expect that as the flow of new black CAs(SA) gain business experience, the proportion of black directors and black CAs(SA) will rise as they gain market share on this measure at a more rapid rate.

Chantyl Mulder, SAICA's Executive Director, suggests that the research results demonstrate a significant effort to ensure younger directors represent the racial and gender composition of the country more directly—as evidenced especially among CAs(SA) who are under 50 years old.

Another transformation phenomenon illustrated by the SAICA research is that more

transformation has occurred among the chairmen roles and “other directors” than in the executive director roles. More than a third of the listed company boards (36,3%) are chaired by black directors, with 37,5% of “other directors” being black.

Gender transformation

By far, the majority of directors are male, which reflects the historical makeup of business leadership and boards and of SAICA membership over the years.

It is also pleasing to note that gender transformation levels improve each year, and that the CA(SA) designation leads this trend to the point where 17% of all board members are now female, and where 17.4% of all CA(SA) board members are now female.

When looking deeper at the race and gender of the directorship, it becomes evident that gender bias is very different between the white and black directorship groups.

Black females outnumber their white counterparts by over 2:1, but that they are outnumbered their male counterparts by nearly 2:1 while white females (who at 5% reflect their demographic reality), are outnumbered by white males by over 12:1. In effect, both gender and racial diversity have a long way to travel, but there is progress annually.

“BEE policy and large blocks of active shareholders are the most likely impetus behind what is forcing change,” maintains Mulder, who also says that in addition to the black transformation gains registered on the top 40, there has also been gender transformation, with an increase in the proportion of black female directors under 50 from 31,4% to 33,9%.

“Quite clearly,” she observes, “SAICA is playing an important role in transforming the chartered accountant profession. Just as importantly, this has been done while still maintaining the highest standards of the CA(SA). Looking ahead, it is significant that new entrants to the CA(SA) profession have reached 50% black and also more than 50% female, thereby ensuring a continued flow of suitably qualified and diverse candidates for future board positions.”

Furthermore, the recent research indicates to us that chartered accountants in South Africa are more than twice as likely to be appointed to the boards of JSE or AltX companies as those holding any other designations or qualifications.

Of the 413 companies listed on the JSE and AltX boards 75,7% of chief financial officers, and a fraction under a quarter of CEOs of these companies are CAs(SA).

Lindie Engelbrecht, an executive director of SAICA, says the predominance of CAs(SA) on JSE boards and in executive leadership positions of these listed companies is all the more noteworthy, as South Africa has been ranked first by the World Economic Forum for the last seven years for the strength of its auditing and reporting.

South Africa is also currently the top-ranked country for financing through the local equity market, and second for the regulation of its securities exchange. Its private institutions are rated third for the efficacy of corporate boards and for the protection of the rights of minorities.

Of the 2 767 directors on JSE- and AltX-listed boards with an academic qualification of some sort, 1 031 hold a CA(SA). This effectively means that the CA(SA) qualification represents almost a third of directorships with qualifications (28,9%). Engelbrecht identifies “pleasing evidence” of a shift towards more diverse CA(SA) representation on listed boards.

“Progress is moving inexorably in the right direction, albeit at a slow rate. “The percentage of CA(SA) directors who are black is growing faster than the overall percentage of black directors. The percentage of CA(SA) directors who are black has grown from 24,5% in 2015, to 25,6% in 2016,” says Engelbrecht.


The most significant growth among black CA(SA) directors has been in the under 50 age group, where the share of black CAs(SA) has risen from 35,6% to 39,3% compared to their white counterparts. Engelbrecht considers the statistic “unsurprising”, given the length of the training and the fact that, while present in the profession before 2000, transformation really began in earnest from that year.

If one looks at the transformation of CA(SA) directors of the top 40 JSE companies, the survey results are even more impressive, with 59,1% of directors under the age of 50 being black compared to 46,3% last year.

According to the research, both the black and the white total samples of directors have aged since 2015. “Obviously every director gets to be a year older each year, but one would expect that as directors retire, they would be replaced with younger directors. This year this has not happened. In fact, white directors over 61 have shown the greatest growth—at the expense of white directors in the 41-50 and the 51-60 age groups.”

An examination of the CA(SA) (above) versus Non-CA(SA) directors (below) by age group reflect two things:

Boards are keen to transform and have in the past taken on many experienced black directors who are not CAs(SA). The proportion of non- CA(SA) directors who are black is 34.9%. The figure has stayed constant since last year; and
We can clearly see that CAs(SA) are more likely to be appointed as directors at an early age. One presumes that the reason for this is because of the CA(SA) training, and specifically because most listed businesses have CAs(SA) appointed as their financial directors, who as executives may be younger than non-executives. Non CA(SA) directors on the other hand gain the credibility to become directors with years of experience, or with other qualifications and thus at an older age.
The total share of black directors has increased from 31 to 32%. With the bulk of the growth evenly spread across the 41-50, 51-60 and the 61+ groups. The ratio of black to white directors in each age group is considerably more even at the lower age groups than at the higher age groups.

As the older age group retires, one can see that they will be replaced with a more diverse younger set of directors.

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