n goldman sachs’ campus in the affluent Sandton section of Johannesburg, Tito Mboweni arrives AFRICA’S for the interview dressed in a colorful O silk shirt, a style worn by the late Nelson Mandela and known as a “Madiba” shirt after the LION AT LARGE affectionate nickname and clan name of the iconic anti-apartheid leader. Mboweni worked alongside Mandela for decades during his rise to power. When Mandela became the first black President Former Reserve Bank Governor of South Africa in 1994, Mboweni served in his cabinet as Labour Minister and from 1999 to 2009 tito mboweni tells Brunswick’s as South African Reserve Bank Governor. marina bidoli how corporate Today, Mboweni is best known as an responsibility is reshaping boards independent businessman and adviser. But his and the global economy government experience in particular has given him a powerful voice in international business and financial affairs and made him an unofficial emissary for his country. He appears to relish his freedom to influence opinions and policies, particularly in Africa. “I do not have any mandate to do this but I have an important role to play,” he says. “My role is a thinking role. My reports are to those who care to listen.”

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Mboweni regularly meets with investors “If some of these institutions were in Africa, Europe and the US who are private sector companies, lots of people interested to hear his observations beyond would be fired by now because it’s basic TITO MBOWENI South Africa itself, he says. “We also talk dereliction of duty, maladministration, From 1999-2009, Tito Mboweni about Kenya, Ghana, Nigeria and other bad corporate governance; we can’t have was Governor of the South markets. I get a sense of how they view that kind of thing,” he said. African Reserve Bank. He is the region and how this impacts their He doesn’t limit his criticisms to Chairman of the pan-African investment decisions. This is a useful public officials or even his countrymen. packaging group Nampak, oil feedback loop. I convey this back to In June of the same year, a dispute and gas company SacOil, and Accelerate Property Fund. He is corporates and governments as I meet erupted on Twitter between Mboweni also an International Adviser at them around Africa.” and Jonathan Moyo, Education Minister Goldman Sachs and serves as On social media, he reaches an even for neighboring Zimbabwe. The two a non-executive director on the wider audience. With 5,000 Facebook men engaged in a heated exchange while board of the BRICS-financed friends (the maximum allowed) and trading jabs over politics and economic New Development Bank. around 140,000 followers on Twitter, policies. The battle made headlines he has used digital platforms to spur for weeks before they publicly called In a 2015 editorial in South African action on everything ranging from a truce. newspaper Business Day, Mboweni South Africa’s national debt to the repair described the International Monetary of local roads in his native Tzaneen, in BANK FOR THE BRICS Fund and the World Bank as bullies that the province of Limpopo. His remarks Formerly Chairman of AngloGold force “all forms of conditionalities and frequently go viral. Ashanti, one of the world’s largest gold policy dictatorship” on BRICS countries. “I complained and complained about producers, Mboweni currently invests The New Development Bank, he writes, the condition of a certain road,” he says. in a variety of enterprises and serves as “seeks to develop the ‘next practice’ “Potholes everywhere. They were giving Chairman at packaging group Nampak, because the ‘good practice’ of old has me a long story, not giving me a straight Accelerate Property Fund, and oil and gas not been sufficient.” The BRICS bank’s answer. So I went to Twitter and posted, explorer SacOil. He’s also a non-executive approach to development financing will ‘This road is a crime against humanity.’ director at health insurer Discovery and be one that “shows some respect” for Now the road is being fixed. They cement supplier PPC. emerging market countries. responded because of pressure they got In 2014, he took on a role likely The headquarters of the NDB from the public as a result of that tweet. to make him even more visible officially opened in Shanghai in 2015 It was no longer just me complaining.” internationally when he was named a and the institution hopes to start Mboweni is not afraid of rattling non-executive director on the board lending in 2016. The launch is corporate and national political leaders, of the New Development Bank (NDB) particularly timely for South Africa, including those in the African National – or “BRICS bank” – created by leaders as Mboweni and others have publicly Congress. The former South African of the five top emerging economies, warned of the threat of economic Reserve Bank Governor is chair of three Brazil, Russia, India, China and South recession and a possible downgrade boards and a director on several others. Africa, as a financing alternative to of the country’s debt. That would make He is also an International Adviser the World Bank. it even harder to get funding for new for Goldman Sachs. In every role, he businesses and projects. South African emphasizes the same overarching theme: utility Eskom has already said it would financial and corporate discipline must be approach the NDB for much-needed grounded in economic and social reality. “The boards of these infrastructure development. His opinions are sharply worded and his tone usually blunt. In late 2015, he companies need to see PRESSURES OF ACTIVISM warned that South Africa and state-owned themselves as responsible The establishment of the BRICS bank enterprises were at risk from a possible is part of a growing awareness that downgrade of the country’s debt and corporate citizens” financial and corporate practice are blamed the leadership, according to South inextricably linked to social conditions,

ILLUSTRATIONS: SEAN MCCABE SEAN ILLUSTRATIONS: African media outlet Eyewitness News. Mboweni says. That trend is pushing

brunswick review · issue 10 · spring 2016 43 Brunswick is an advisory firm specializing in critical issues and corporate relations www.brunswickgroup.com boards toward transparency in emerging markets more responsive to a broader selection of just as it is with their counterparts in the US stakeholders, not just major shareholders, he says. and Europe. “Most companies today are “We are a long way from the days when boards transnational,” Mboweni says. “The boards of directors were representatives of a family who of these companies need to see themselves as were the owners, just looking after the interests of responsible corporate citizens.” the family,” he says. “Those days are gone. In fact, That means they need to comply with local laws, for publicly listed companies, it is frowned upon adopt best-practice principles of governance, and The BRICS when the board of directors is only made up of the align the needs of shareholders with the needs of representatives of the biggest shareholders.” the environment, workers, customers and partners. bank’s Boards and executives often point to the difficulty “Responsible companies have to address all of approach to in balancing profits and social responsibility, but that and it is up to the board, no matter where they Mboweni has little patience for that argument. are, to hold the executives accountable,” he says. development “It is very clear: no corporate can survive in a sea In emerging markets, as in the US, institutional financing of poverty,” he says. “Who will buy your goods? If funds act as shareholder activists and sharpen you make beer, you want people to have income so the focus on accountability where governance is will be one that they can buy your beer. Otherwise the economic concerned, he points out. “In Cape Town, they “shows some wheel will not be able to turn at all.” follow the same approach as in Boston. The Mboweni remains in demand as a board expectations are everywhere the same.” respect” member and enjoys the influence those roles Social activism is also creating pressure. Mboweni for emerging bring. He complains only about having to juggle remembers when Goldman Sachs was surprised by compensated and non-compensated positions. a group of nuns and religious investors that showed market “You need a balance and the balance is never up at the annual general meeting to protest the way countries there,” he says, with characteristic humor. the Wall Street bank compensated its executives. “You’ll get 10 invitations and six will be for non- Environmental activists continue to challenge compensated positions. It’s pro bono for them, boards and make headlines worldwide, forming but you spend a lot of your own money. It can “a global platform” to scrutinize corporate behavior drive you to insolvency. And then, if you’re and influence votes at annual general meetings, insolvent, nobody wants you around anyway.” Mboweni says. This global pressure on standards of corporate marina bidoli is an award-winning former journalist governance and the makeup of the boardroom and Head of Communications at oil and gas company means that companies have necessarily become Sasol. She is a Brunswick Partner in Johannesburg.

BUILDING THE BRICS

he acronym, BRIC, was coined in 2001 to highlight BRICS officials, however, say the coalition is about more than similarities between the fast-growing economies of four economics. Russian Deputy Foreign Minister Sergey Ryabkov, T disparate countries: Brazil, Russia, India and China. Since quoted by Russian news agency TASS, says the BRICS disturb 2006, the heads of state of those countries have met each year the West’s comfortable paradigm of global dominance. “I want to explore paths to further cooperation. As a bloc, they seek the to say that critical remarks themselves are the best sign of the reform of Western-controlled institutions such as the UN, the BRICS’ importance and the significance of this structure for World Bank and the International Monetary Fund, whose policies international relations. If this had not been the case, BRICS are often viewed as unfair to developing nations. South Africa would have been simply ignored,” he says. became a member in 2010, adding the “S” to BRICS. In 2014, the BRICS leaders established the New The original BRIC countries have long been expected to join Development Bank for financing of infrastructure and the US as the leading economic powers of the world by 2050. sustainability projects in BRICS and other emerging markets Slower growth among the BRICS has shaken that view, however. nations, as a direct challenge to the US-led World Bank. The The Wall Street Journal declared “BRICS’ New World Order Is NDB marks the first joint institution created by the BRICS Now on Hold” and cited an international finance official who countries and is an important symbol of their cultivation of termed estimates of BRICS future growth “overblown.” solidarity and economic partnership.

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