A great deal of effort has been placed on transforming the gender and racial balance of management in both the private and public sector.
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Employment Equity legislation and the various affirmative active initiatives such as BEE scorecards have essentially represented the ‘carrot and stick’ approach the state has adopted.
Co-determination
However, one area of transformation that has been noticeable by its omission, is the compulsion of representation by labour in the boardrooms.
Germany has since 1976 compelled companies to ensure representation on their boards determined by the size of their workforce, for instance, companies with more than 2000 workers must reserve half their board seats for worker elected representatives.
The policy, referred to as co-determination, has been identified as one of the factors in Germany’s ranking constantly, as one of the top manufacturing countries in the world.
Confrontational
In the South African context of confrontational rather than co-operative labour relations, the thought of including labour on management boards may appear unthinkable at first glance. However, the reality is that workers are at the coalface of operations – assembly line workers know how to speed up manufacturing, sales staff know what customers want, and engineers know what design tweaks can make a product sell.
It is perhaps instructive that even at state-owned companies, the representation of labour at the highest management levels is rare, implying that the Chinese wall between workers and management are widely present.
Executives are sometimes ill-prepared to address operational shortcomings, and traditional worker-engagement channels are rarely effective.
Increase in productivity
The other fear, that worker’s self-interest in terms of their benefits (wages etc.) would override the interests of the company as a whole appear to be unfounded as well. Recently published research by economists Jager, Schofer and Heining appears to show that the policy of co-determination expanded the entire ‘corporate pie’ rather than redistributed it between stakeholders. Further, the marked increase in productivity across the manufacturing sector since 1976 can also be attributed to the introduction of co-determination.
Breaking down the barriers between workers and management can yield surprising positive benefits for all stakeholders.
After matriculating, Vijay Naidoo studied Economics in the UK. Upon his return, he joined the family construction business as MD for 10 years.
He subsequently joined his sister in their furniture manufacturing business as director for quality assurance and operations. He was responsible for all quality aspects of their products, and led the project to the business achieving an ISO 9000 quality accreditation. As an export focused business, this was important for our international competitiveness.
Mr Naidoo has an abiding interest in quality management and productivity improvement, particularly in manufacturing.
More recently, he has focused a lot of his time on giving back to the community by way of mentorship of small businesses and sitting on the executive of the South Coast Chamber of Commerce. He also sits on the Board of the Ugu South Coast Development Agency.
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