The fact that broking group Glenrand MIB rocketed up the empowerment charts last year will take the sting out of what has been an otherwise miserable year.
Glenrand scored 79%, behind only Hosken Consolidated Investments (HCI) and Nedbank among financial companies, and sixth of all JSE-listed firms.
But the real story is how Glenrand improved so rapidly, considering that it came in 14th last year with a score of only 68%. What has changed?
Says CEO Andrew Chislett: "One of the significant factors in our improvement is that we set our internal targets to align with the department of trade & industry (DTI) codes of good practice, rather than the financial sector charter."
This was evident in the Top Empowerment Companies data, where Glenrand improved its preferential procurement rating from 15 points to above 17, and its skills development score, which shot up from 7,2 points to 12. Underscoring this, Glenrand's empowerment status has improved from A in 2007 to AA last year. But there is still scope for improvement.
"Our staff complement comprises 50% historically disadvantaged individuals. However, we still have a lot of work to do when it comes to employment equity in our middle and senior management ranks," he says. Though four of its 12-member board are black, there are no black executive directors. And of its 10-member executive committee, six are white males.
At the lower levels, things are good: more than 75% of its semiskilled and unskilled staff are black, and at junior management level, 51% are black. But at senior management level this drops to 8,3% and 25% in top management. However, Chislett says Glenrand has been able to retain black staff in the middle management layer. He says one of the reasons for this is that Glenrand differs from other companies because it promotes staff from within.
Glenrand also struggled when it came to enterprise development. Last year, it didn't invest in any single enterprise development opportunity. Its advantage comes in black ownership. Already, it has surpassed both the 25% black ownership targets of the financial sector charter and government's broad-based codes of good practice. A range of black investors own 29,4% of the firm.
Unlike other financial firms, this broking company cannot be accused of having black shareholders for window-dressing. In a few instances, the black shareholders have actually stepped in to run the company, as Dudu Kunene did last year. Kunene is one of four brothers whose companies - Kunene Finance Company and Kunene Brothers Holdings - bought into Glenrand in 2000.
But Glenrand has other black investor groups, which include Ayavuna Women's Investments, Matemeku Investments and the Makgulong Employee Ownership Scheme Trust.
In financial terms, the company reported a loss of 36,2c/share. In the annual report, Chislett admits that Glenrand had "frustrated investors for several years with poor financial performance coupled with an inability to articulate a sound business strategy centred on its core [business]".
But things are looking up, primarily because Glenrand was able to remove the albatross from around its neck: the benefit services division.
And shareholders will be breathing a sigh of relief at the new direction. Though many financial firms' share prices have lost value, Glenrand has suffered more than most. Last year, its stock was trading at R1,58, but in January this year it fell as low as 20c, before recovering slightly to around 80c. Nonetheless, this is a nasty slide from the highs of R4,10 in 2005.
Says Chislett: "We know that the turnaround story will be acknowledged by the public and investors only when we actually start to show the right numbers. At the moment, they don't have much to go on but our word."
