Metropolitan Life may be short on equity but it can bank on its broad-based empowerment, which has helped it to top of the financial services sector and place fourth overall. The group has had a long history with black empowerment.
When Sanlam sold control of Metropolitan Life to a consortium headed by Nthato Motlana and Jonty Sandler (later renamed New Africa Investments) in 1993, it was the first high-profile black economic empowerment (BEE) deal.
As Metropolitan already operated in the emerging mass market, it was hoped that black control would help to drive its growth in market share.
Nail's impact as the controlling shareholder was limited as it did little to bring in new business.
Nail unbundled Metlife three years ago. Metropolitan was briefly renamed New Africa Capital to give some afterlife to the Nail era, but at the end of last year the group proudly readopted the Metropolitan name, though it is now Metropolitan Holdings, not Metropolitan Life to indicate its wider range of services.
Nail's legacy is that it was a catalyst for change. Though Metropolitan now has a small 3,7% direct ownership through a staff scheme, Empowerdex has not included this in its figures because the company does not indicate the proportion of white and black holders. Group empowerment executive Nathi Chonco says empowerment is a cornerstone of the Metropolitan culture and has enhanced its business strategy since the early 1990s. It launched an in-house empowerment barometer, which is now run by the Black Management Forum and the UCT Graduate School of Business.
Chonco says the group supports the financial services charter as a means of formalising the way the financial services sector aims to further empowerment over the next 10 years.
Metropolitan already has 74% black staff, of whom 36% are black women. The management team is 61% black, with executive management 36% black, senior management 18%, middle managers 34% and junior management 47%.
Chonco says the group is already close to achieving the 2008 targets, except in respect of black women from middle management upwards.
There is a strong focus on diversity management initiatives, where most of the business units and group support services have been making use of consultants since 2000.
It is finalising a strategy to facilitate the integration of people with disabilities into the group and the head office complex in Tyger Valley has been audited on its accessibility by a consulting company owned and run by disabled people.
Metropolitan spends 68% of its total training budget on black employees, adding up to 1,2% of its total group payroll.
The group is making progress in procurement, with the portion of total procurement spend going to black and black-empowered suppliers increasing from 18% in 2002 to 26% last year. The goal for this year is 30%.
On access to financial services, Chonco says Metropolitan has focused on the low and lower-middle income group since it was formed in 1898. It continues to tailor its products, services and distribution strategies to meet the financial needs and aspirations of the predominantly black individuals in these groups.
The sales staff is 84% black, all of whom have an intimate knowledge of the markets in which they operate. Last year Metropolitan spent R4,6m on financial education, or 1% of core headline earnings.
Metropolitan established its socially responsible investment vehicle, Futurebuilder, in October 1996. It has undertaken numerous targeted investments and is worth R611m.
It has invested in infrastructure projects that have helped black communities through organisations such as the Development Bank of SA, Inca, the Rand Water Board and Eskom. After four years of investments in the SA Infrastructure Fund, it invested in the new African Infrastructure Investment Fund in January 2004.
In the second half of the 1990s, Metropolitan provided finance for several BEE transactions, including the National Empowerment Consortium's takeover of Johnnic, Union Alliance Holdings and Prodigy Asset Management.
Metropolitan is well ahead of target on corporate social investment (CSI). The charter stipulates 0,5% of post-tax operating profit on CSI. Metropolitan already spends 1,4%.
Metropolitan CEO Peter Doyle says the shortfall in direct ownership will ultimately limit the group's ability to achieve its full business potential.
It has been seeking strategic black equity partners and is in negotiations with one. Doyle promises the deal will be structured without the dilution of shareholder value.
Metropolitan is well ahead of 2008 targets on its board and executive management requirements. The board is 50% black and is chaired by a black woman, Gloria Tomatoe Serobe from Wiphold.
Two of the three executive directors are black - finance director Preston Speckmann and corporate business head Abel Sithole. Two of the four business unit heads - health head Blum Khan and Metropolitan Life Retail's Derek Pead - are black as are four of the 11 executive managers - though none is a black woman.
