Irene Charnley Case Summary

Irene Charnley Case Summary
Irene Charnley is a colored (black) lady of South Africa. She was former trade unionist made first mark as a shrewd negotiator for the National Union of Mineworkers in South Africa. Went on to take up a job as an Executive Director at Johnnic, led MTN, Africa’s largest telecoms group, where she led the company’s successful foray into several African countries. Was instrumental in negotiating for and acquiring one of four GSM licenses in Nigeria. She also helped MTN secure the second GSM license in the Islamic Republic of Iran. In return, was rewarded with huge chunk of MTN stock. Left MTN in 2007. Now serves as CEO of Smile Telecoms, a low-cost telecommunications operator based in Mauritius.

At Johnnic, Charnley was main catalyst for change in strategy which involved increasing the holding company’s exposure to telecommunications company MTN while divesting profitable but non-core assets like South African Breweries. She convinced the board and proceeds from divesting the non-core assets were used to purchase sole ownership in media company TML and entertainment company Mega, and a majority share in MTN. As Charnley had spearheaded Johnnic’s acquisition of a controlling interest in MTN, later the company provided eighty percent of Johnnic’s revenue when she became chairperson of MTN. At MTN Irene Charnley was must to transform the mostly white-led company to be more representative of South Africa's demographics. In addition to chairing MTN’s board, Charnley sat on three of the board subcommittees, the Investment and Strategy Subcommittee (ISC), the Human Resources and Remuneration Subcommittee (HRRS), and the Regulatory Subcommittee. MTN had employed only one black executive before Johnnic had acquired the majority share of the company. Now, in 2000, there were five black executives in top management including the managing director for SA operations. In the case study, the company was currently recruiting a black executive to head up MTN International. Bringing in black hires had not been easy—some had encountered overt racism—but, Charnley had been pleased to see that, as “hires began to deliver, tensions seemed to relax.” The government’s impatience with South African business was growing and the vast majority of the black population was still marginalized from the mainstream economy. Since her appointment as executive director of telecommunications for Johnnic, Charnley had pressed MTN to think more strategically about its future growth. She had pushed MTN to pay attention to the black market in South Africa, to aggressively expand into foreign markets, and to capitalize on synergies with Johnnic’s other subsidiaries. In addition, she had insisted that MTN diversify its virtually all-white management team. Although progress had been made on all fronts, Charnley feared that senior management was too complacent. This was a high-growth company used to success. But their market was maturing, a third cellular license could be issued any day, and they were still runner-up in market share. They need to speed-up feel urgency. They do not understand the urgency that the regulatory environment calls for in integrating the ranks of professionals and senior management. Now, Charnley was considering speeding up the process of black economic empowerment (BEE) at MTN. The main issue was black people think they are deprived, having low support from white veterans and not sure of long term consistency. On the other hand, white people were feeling that all new opportunity and future growth is for blacks as company is focus is on diversification. The divide, Charnley felt, between these two perspectives was very wide. The task is to somehow honor both of those viewpoints while keeping MTN growing – because, if earnings fall, everyone will be unhappy.