In May 2021, the chief executive officer of Telkom SA SOC Limited (Telkom) in South Africa was facing a dilemma. Fifth generation (5G) technology was about to be introduced to the country’s communications industry. While Telkom had fared well during the COVID-19 global pandemic, even managing to gain market share from its much larger competitors, the anticipated release of additional coverage spectrum for the new 5G technology was going to put pressure on Telkom’s finances and business model. The chief executive officer, appointed in 2013, had helped transform the company’s business model from a struggling state-owned enterprise with a monopoly and unhappy customers to a thriving business in open competition with complementary strategic business units. However, with continuous evolution in the industry, Telkom was forced to innovate again and possibly reposition its strategic business units.
The share price of EOH Holdings Ltd. (EOH), a company listed on the Johannesburg Stock Exchange and Africa’s largest technology service provider, decreased by over 30 per cent in December 2017 following allegations of fraud in relation to a corporate action within the group. Despite strong denials by the then–group chief executive officer (CEO), Zunaid Mayet, EOH’s market value continued to plummet, from a peak of 22 billion South African rand to 4 billion. In September 2018, Mayet was replaced as group CEO by Stephen van Coller, a former banker and telecommunications executive, who recruited a new executive team, replaced the board, and contracted out an unfettered internal corruption investigation. By June 2020, van Coller was wondering whether he and his management team had done enough to prove to the market that EOH was an organization once again worthy of trust and investment. Had they taken sufficient steps to restore EOH’s reputation? Had they earned the right to push the board to approve the next phase of EOH’s turnaround?
When Peter Moyo was appointed as chief executive officer (CEO) of Old Mutual Emerging Markets (Old Mutual), one of South Africa’s largest and oldest financial institutions, in 2017, the chair of Old Mutual, Trevor Manuel, and the Old Mutual board were optimistic, as Moyo seemed like the ideal candidate. However, less than two years into his tenure, Moyo’s employment was terminated owing to a conflict of interest and a breakdown of trust between Moyo and the chair and board. From the moment he was suspended, Moyo made the dispute very public, and appeared to be orchestrating a media campaign against Old Mutual and the directors, especially Manuel. A protracted and bruising legal battle ensued, and many corporate governance lessons were learned. It was now incumbent on the board to identify and appoint a new CEO of Old Mutual. Given the local and international environment, and in view of internal and external challenges, they needed to consider what kind of CEO would be appropriate for Old Mutual; what criteria they should set for this crucial position; and what the right timing and communication process would be around the new CEO’s appointment.
The head of the South African subsidiary of the US consulting firm McKinsey & Company (McKinsey), has to address the implications of the firm’s involvement in a corruption scandal. The South African office was implicated in a scandal involving its local partner, Trillian Capital Partners (PTY) Ltd. (Trillian), and Eskom, a South African state-owned enterprise (SOE). McKinsey was required to partner with a local company as a condition of any contract with a South African SOE. McKinsey took on Trillian as its local partner after Trillian was recommended by a former client. Trillian was, however, associated with the Guptas, a family that the South African Public Protector (an ombudsman) had accused of using its influence with the South African president, Jacob Zuma, and his family for corrupt activities. The partnership (first with a company named Regiments Capital (PTY) Ltd. [Regiments] and then, following restructuring, with Trillian) directly benefited the Gupta family. More than three years into the relationship, McKinsey claimed to have discovered that its partner was politically exposed and under investigation by the South African authorities. McKinsey’s new global managing partner attempted to limit the damage to the company’s reputation by issuing an apology. However, the South African public appeared skeptical about the apology, and questions remained regarding McKinsey’s integrity. The questions left unanswered included the following: Was Sneader’s apology enough to enable McKinsey to quell the attack on its reputation? Should McKinsey do more to enhance its standing within the South African business community, or should it accept that its reputation had suffered irreparable harm?
Serge Belamant was the founder and chief executive officer of Net1 UEPS Technologies (Net1), a US$600-million company that had a contract with the South Africa government to pay social grants to the poor. The contract was controversial from the start and was under scrutiny through multiple legal challenges and three different investigations, including by the US Securities Exchange Commission and the US Department of Justice. When Belamant discovered a paper describing a conspiracy theory alleging that he and Net1 were involved in a form of corruption known as state capture, he believed he could be the victim of a disinformation campaign and wondered what to do.