Corporate governance transformation still a challenge in Namibian private sector

Many strides have been made to empower Namibian women in the Boardroom, but it still requires work to achieve proper results.

The Namibian private sector still lags behind government when it comes to diversity in business and management and the empowerment of women in Namibia.

“The reality of the Namibian private sector is that the large private companies which materially influence the growth path of the economy and affect employment statistics are not Namibian owned,” says businesswoman and managing director of Stimulus Investments Monica Kalondo.

“This is not to undermine the need for checks and balances in Namibian companies, primarily family owned and controlled businesses, but the harm caused by the latter is not significant to the systemic risk that lapses in corporate governance systems of large corporates are able to cause.”

That said, corporate governance remains a key concern and the governance structures of various Namibian companies differs depending on the size, ownership and constitution of its board.

Kalondo chairs several boards the latest being that of E-Bank. Additionally she serves as the Deputy Chairperson of the Namibian President’s Economic Advisory Council and the Deputy Chairperson of the Public Office Bearers Remuneration Commission.

The era where women were parachuted out of liberation struggle exile into plum jobs is no more

Kalondo says that in relation to diversity of the composition of boards, there has been no significant change although government is making a concerted effort to ensure the Boards of State Owned Enterprises and institutions reflect the country’s demographics.

“The private sector continues to lag behind government in relation to diversity. There was recently a round of congratulations for me being the first black Chairperson of a Namibian bank in addition to being the first female. That embarrassed me somewhat as it is such an indictment on the private sector that we must still celebrate “first black” or “first female.” There must be so many black people and women playing meaningful roles in the engine rooms of our economy that it should not be newsworthy,” say Kalondo.

Given her role as an investor, Kalondo takes an active interest in the corporate governance of the Boards which she serves on.

“As it is a mindset and not a tick box exercise, it is really about enabling an attitude of “doing the right thing”.”

Due to the fact that Namibia, 24 years after gained independence is yet to implement a Broad Based Black Economic Empowerment Policy, transformation in the private sector is often hampered or seen as mere window dressing.

Kalondo says that the lack of a legislative framework for Broad-based Economic Empowerment is unfortunate.

“A State Owned Enterprise was recently taken to court for attempting to enforce procurement preference to black-owned, Namibian businesses as the Constitutional requirement for legislation has not been satisfied.

“In the absence of legislation, the country places its reliance on the conscience of the boards themselves to look around the table and ask themselves whether the lack of diversity is defensible. This strategy has not worked too well for us and it is my hope that the necessary legislation will be enacted as a matter of urgency.”

Enforcement loopholes in Namibia’s Affirmative Action legislation have facilitated a poor compliance culture, particularly at executive level. In the absence of a well developed pipeline of black executives, the argument that suitably qualified and able black Namibian executives are difficult to find becomes disingenuous.

“The inability, or unwillingness, to widen the black middle class and significantly reduce income inequality lends itself to a volatile socio-economic climate. Namibia’s economy is not inclusive and any economy where the majority are excluded from participation exposes itself to problems, says Kalondo.

A concern that is shared by advocate Natasha Bassingthwaighte who serves as a director on the boards of Standard Bank, Standard Insurance Brokers, PPS Insurance Namibia (Pty) Ltd and the Board of Trustees of the Old Mutual Black Distributors Trust.

“My concern is that in some cases the transformation is not real. Sometimes it is just purely window-dressing,” says Bassingthwaighte.

According to her in the increased regulatory environment that Namibia now has, she believes that companies are forced to put in checks and balances.

“The companies on whose boards I serve are all subject to stringent regulation. A failure to put proper checks and balances in place has serious financial and reputational consequences for them so they have very well developed systems in place.

“But there are other industries and businesses that do not have the same kind of pressure. I have seen that in those cases, and in particular with smaller businesses, corporate governance is of neglected. This often leads to difficulties for those responsible,” Bassingtwaighte.

“I believe that these things will change organically, society will demand the transformation and it is happening,” says Jennifer Comalie who serves on the boards of amongst others the Namibia Ports Authority, Oryx Properties Limited, RMB Investments (Pty) Ltd and FNB Namibia Holdings Limited.

“In my ten years of serving on various boards I have found that things have changed for the better but there is definitely still work to done to improve the status quo even further, says Comalie.

According to her all boards on which she thus far served there has been a concerted effort to transform.

Checks and balances in corporate governance remains a challenge though.

“That is why boards and working committees of the board are created, to continuously work at putting the right checks and balances in place. But we need to work harder, put the company’s best interest first, set the right tone on top, show leadership and then I then good corporate governance will follow,” says Comalie.

Namibia’s future prospects

Though challenges remain all three women are positive about for women to play a greater role in Namibian leadership in all spheres.

“With the current growth rate of the economy and also at all levels there is a willingness to transform by the current leaders, political and business. The opportunities are out there,” says Comalie.

“We are certainly moving in the right direction and Namibia is probably in the forefront as far as this is concerned. Change is inevitable and with the younger generation gender issues are becoming less of an issue. It is about what you can bring to the table,” Bassinghtwaighte added.

Kalondo says that Namibia has an acute skills shortage and that the country simply do not have the luxury of denying suitably qualified and competent women access to key operational and strategic roles.

“The era where women were parachuted out of liberation struggle exile into plum jobs is no more.

“The Namibian woman of today has slowly worked her way up from being a clerk right to the top with no political connections. This type of leader is self assured, confident and not afraid of developing other female talent. That is the future of Namibian female leadership and like the country itself, it is full of potential,” Kalondo concluded.

This article originally appeared in the published version of Finweek.