participation in social transformation activities from the “voluntary”, past the “expected” and into the “required” category (Carroll & Shabana, 2010).
The researcher initially intended to explore the motivations of the companies participating in the Charter process; however it quickly became clear from early interviews conducted during the fieldwork that the Charter was the product of a sustained and far-reaching collaborative effort, even though it was essentially the product of a negotiation. On that basis it became necessary to focus not only on the motivations of the companies who participated at the time, but to draw in the views of a wider pool encompassing all the key protagonists in the process:
ABSIP, trade associations, government, regulators, communities and NGOs. This enabled the researcher to develop a more holistic understanding of how the Charter process actually unfolded through the lived experience of its participants. The main contribution of this thesis is therefore, the insight it has provided on the individual perspectives of the people who were intimately involved in the development and implementation of the Charter from 2003 to 2018.
As far as motivations are concerned, for businesses in the sector it was about regaining social legitimacy whist securing, via negotiation, a level of economic performance from a new operating paradigm of pillars and targets. For government (at the time at least) it was about nurturing a different kind of transformation process that would not destabilise the country’s finance institutions and economy yet stimulate transformation activities in other sectors; for black business professionals it was about being a voice for many constituencies, for securing funding and employment equity commitments. For communities (through ABSIP) it was about making financial services more accessible to the broader base of the population. In many of these aspirations that Charter was successful yet, as acknowledged by many interviewees, there remains more to be done, particularly with the opportunity created by new political leadership from the ANC following the 2019 general elections.
Regarding the lessons that can be derived from the review of the Charter from its conceptualisation, formulation and implementation, the multi-party convening structure worked well to bring disparate voices together. The competitive element worked to develop product innovations that the sector had not seen before. The mechanisms to adapt the Charter over time did not work well, especially when the political environment changed after 2007.
Lastly, the broadest base of the population has not directly benefited in the way the upper and middle classes in South Africa have, though in hindsight perhaps the development of their
“wealth” was not an obvious, nor intentional target of the Charter’s design.
The researcher was therefore able to conclusively answer both the primary and secondary research questions: what motivated the development of the FS Charter, and what lessons can be learnt from its development and implementation. Both of these dimensions were extensively discussed in the previous chapter in light of the revelation from participants that, despite the frustration expressed by many of the interview participants with the “unfinished business” of the original Charter, there is an opportunity re-engage the cross-sector social partnership and catalyse the next phase of economic transformation in the country, utilising the lessons learned as described in this thesis to support the next phase of B-BBEE.
7.2 Future Research
This exploratory research provided the researcher with a number of new insights into the thinking of the highest leadership of some of the main companies in the Financial Services sector, as well as leaders from government, labour and NGOs concerning the Charter. A number of these insights were discussed at length in Chapter 6, but there are several matters that the researcher was not able to explore more fully due to the time and length constraints that are set by the University of Cape Town for a research-based thesis of this nature. Future research may thus wish to consider the following five areas in more detail.
Firstly, the Financial Sector Charter consisted of six pillars, each with operational targets for the companies to achieve. Much emphasis has been placed on the ownership pillar in this thesis (by virtue of its prominence in public discourse) and to a lesser extent the employment equity and access to finance pillars. Yet, as contended by various interview participants, the true value of transformation in the Charter lies in the other pillars such as supplier and enterprise development, procurement, funding for black business and infrastructure financing. Future studies may wish to explore this contention, to see how much (in Rand terms) has been spent
or loaned by companies under each of these pillars, and what the economic and social multiplier effect of this funding has been.
Secondly, as observed from the findings, there is the paradox that the policy of transferring share ownership in existing companies into black hands has had a negative impact on entrepreneurship, particularly amongst existing and aspiring black business people. Future research may wish to investigate the claim made in this research by select interviewees that it is easier to become a passive black investor in existing companies than to endure the hardship of starting and running one’s own business. It will be interesting to establish if this is a widespread phenomenon and if true, the impact on employment creation and economic growth.
Alternatively, whether it is other policy factors such as a lack of funding (the Charter’s commitments notwithstanding) or some form of bureaucracy that have played a role in
“discouraging” a more traditional form of entrepreneurship amongst black business people, instead of becoming passive investors.
Thirdly, from a more political standpoint, there is the issue of policy contestation within the ruling ANC and between it and its alliance partners, COSATU and the SACP in the years from 2003 to 2018. As this thesis highlighted, this contestation manifested itself in the Financial Sector by the failure of government (in the form of the DTI) to approve the FS Charter for over eight years. This was an undoubted setback for the proponents of transformation in the Financial Services sector, and the architects of the Charter. The researcher offered some initial perspectives and reasons why the Charter may have been the subject of this contestation and future research may wish to explore in depth the reasons for the phenomenon, and indeed the wider impact of the policy contestation on the South African economy over the period in question.
Fourthly, this thesis has made reference, both in the Literature Review and in the Findings, to the Mining Charter in South Africa. In some ways it was the negative market experience of the leaked first drafts of the Mining Charter that catalysed the Financial Services sector to follow a different development route. Studies have compared the two charters (see Hamann et al., 2008) but it would be opportune, with the benefit of the further passage of time, to build on such studies to describe the similarities and differences between the two charters, both in terms
of their structure and their relative progress in terms of their transformation objectives, but also whether the respective charters’ designs and structures contributed to the strength of the businesses implementing them or acted as a constraining factor, the concept of enhancing social value through adaptive business models (per Martí, 2018), being one example.
A final research opportunity lies in a more regional view of the concept of economic empowerment, to examine the regional examples of transformation as adopted by countries such as Zimbabwe, Namibia and Botswana, following more extreme, similar or different design concepts respectively, again using the mining and Financial Services industries as examples of how empowerment policies were designed and implemented, and their impact on their countries’ economic performance over time.
7.3 Closing
In 2019, the Financial Services industry in South Africa may well be at another “watershed”, much like it was in 2002 at the time of the Financial Sector Summit, though for different reasons as explored, analysed and discussed in this research. The researcher hopes that this thesis and the suggested praxis (see Annexure 8) will provide companies, policy makers and social partners who are contemplating a reimagined process of social and economic transformation in South Africa with firstly, a sense of the core issues, successes and weaknesses of the design and implementation of the Charter and Codes; and secondly, with insights into the processes that could be replicated, and those which could be discarded, that may help develop a new framework for transformation. The suggested praxis offers the researcher’s proposal on how a new model of wealth generation (as opposed to wealth transfer) through skills development could be implemented in the form of a new social endowment fund that aims to benefit the young, economically marginalised South Africans who need funding to further their studies and alter the economic trajectory of their lives. This is a counterfactual proposal to the existing construct (Dacin et al., 2011) of wealth transfer inherent in much discourse on B-BBEE in South Africa to date.
On this journey to understand elements of the “unjust equilibrium” in South Africa and one industry’s efforts to address them, the researcher has been guided by the words of Ferraro et al., (2015) to produce a thesis whose findings would result in a new approach to economic transformation in South Africa “that is more participative and less heroic; more ambiguous and less prescriptive; more experimental, and less directive; perhaps less intuitive, but hopefully more effective.”