25 Jul 2006Working Paper Summaries

A Gentler Capitalism: Black Business Leadership in the New South Africa

by Linda A. Hill and Maria Farkas

What role should business play in ameliorating poverty and addressing inequality? Linda A. Hill and Maria Farkas, a doctoral student, examine this question against the backdrop of post-apartheid South Africa. Focusing on the efforts of one successful black executive to recruit and develop other minority managers and integrate blacks into the mainstream economy, Hill and Farkas explore fundamental ethical and business issues affecting companies and society at large. Key concepts include:

In assessing the economic or ethical soundness of a leader's decisions, the impact of his or her actions over time must be considered.
All business people around the world need to think about the appropriate role of business in addressing inequality.
This example of efforts in South Africa may offer valuable insights for addressing inequality elsewhere in the globe.
Issues of inequality are more likely to be raised in transitional economies—as opposed to stable economies—because new institutions are being designed and new policies and practices are being established.

Author Abstract

Through her efforts to recruit, hire and develop minority executives at MTN, a South African telecommunications company, [Irene] Charnley attempts to bring a gentler capitalism to post-apartheid South Africa. Like her other colleagues on the Black Economic Empowerment (BEE) Commission, Charnley believed that each black business executive had a responsibility to effect positive change in their particular company, and that through their collective efforts they could have a powerful collective impact on the country. By the time of the BEE Commission Charnley found herself at the top of the pyramid, but she had come from the bottom, growing up in Elsies River—an Afrikaans-speaking, Colored area outside of Cape Town. This paper begins with a description of the economic conditions in apartheid and post-apartheid South Africa, then details the BEE Commission, and finally narrates Charnley's story.