Photo © 2010 J. Ronald Lee.

Prof. Deon Rossouw

A well-known urban myth alleges that if you put a frog in a pot of hot water, it will try to escape immediately. However, if you put the frog in a pot filled with room temperature water and then incrementally increase the temperature, the frog will not try to escape, and will eventually be boiled to death.

A recent survey of business ethics in South Africa suggests that something similar is happening regarding unethical conduct in corporate South Africa. We are gradually growing accustomed to unethical conduct, and are learning to simply accept it as normal business practice.

The 2021 Ethics at Work Survey was conducted amongst employees in the private sector across 13 countries that included the USA, UK, Germany, France, Australia, and South Africa. The survey was conducted by the London-based Institute of Business Ethics, and The Ethics Institute (based in Pretoria) was the South African partner in this survey.

Remarkably, the findings indicated that South Africa was rated amongst the top for formal aspects of ethics management, such as: having a code of ethics, providing whistleblowing channels to staff, and training staff on organisational ethics.

Furthermore, South Africa was also rated first for both leadership and management supporting employee adherence to organisational ethical standards.

However, an equally startling finding was that South African businesses were more tolerant of accepting unethical behaviour as inevitable in the workplace. In addition, South Africa was ranked last with regard to practicing honesty at work.

There are several puzzling issues related to this glaring discrepancy. The one pertinent point that jumps out for me is: How can we fare so well with formally managing ethics, while having such a dismal record of tolerating dishonesty in our workplaces?

The finding on the leading position that South Africa occupies regarding ethics management is not difficult to explain. Over the four editions of the King Report on Corporate Governance since 1994, organisational ethics has gained an ever more prominent position in the King Reports. In King IV, the very first three principles (out of a total of 16 principles) are devoted to ethical leadership, ethical culture, and corporate citizenship. The introduction of Social and Ethics Committees in 2012 – as mandated by the Companies Act – gave further impetus to the rise in prominence of business ethics. The 2021 Social and Ethics Committee Trend Survey found that organisational ethics is the most prominent matter on the agenda of Social and Ethics Committees. The exposure of state capture, and the involvement of the private sector in state capture, gave rise to an unprecedented number of calls for ethical leadership across all sectors of the economy.

But how does one explain that despite the prominence of ethics in the corporate discourse, South Africa was found to be the country most willing to tolerate dishonesty in the workplace?

It is in this respect that the analogy of the frog in hot water might shed some light.

During the Zuma presidency the news about large scale corruption involving the state, state-owned enterprises, and the private sector started to trickle. What started as isolated incidents eventually culminated in the large-scale narrative of state capture. Over the last four years, the Zondo Commission systematically unravelled the details and extent of state capture. On an almost weekly basis, new revelations of unethical practices in both the public and private sector, as told by witnesses before the Zondo Commission, came to the fore.

Given the steady influx of bad news about unethical practices in the country, it should not be surprising that many came to accept that this is simply the way that business is being done – at least in South Africa. People started getting used to the hot water – just like the frog.

The most popular definition of culture is, after all, “the way things are done here”.

Once unethical conduct has crept into the culture of an organisation or a country, people find ways of rationalising improper and dishonest practices as normal: it is how things are done here.

So, when South African employees were asked in the 2021 Ethics at Work Survey whether “Minor breaches of rules are inevitable in a modern organisation”, 48% of respondents agreed. This is the second highest score of all the countries that participated in the survey.

Accepting unethical conduct as inevitable in business does not bode well for South Africa.

Counties that are sustainably safe, just, and prosperous are built on ethical foundations. Over time, unethical behaviour has a nasty habit of undermining the communities in which it thrives.

It is imperative that this culture of tolerance for unethical practices in business be reversed. The solution to this problem, however, does not lie in more codes of ethics, more ethics policies, more effective whistleblowing systems, or better compliance management. The 2021 Ethics at Work Survey illustrated that South Africa is doing rather well with these and other formal elements of ethics management. Tolerance for unethical conduct persists despite all these trappings of ethics management.

What needs to be tackled head-on is the conviction that unethical conduct and practices are an inherent and inevitable part of doing business.

We need a new discourse in which the ramifications of unethical business are brought to the surface. People need to understand the consequences of unethical business for the organisations in which they work, for their colleagues, for the morale of their organisations, for their supply chain, for their clients and customers, for the communities and natural environment in which they operate, for the appetite of international investors, and for economic growth.

Probably the most important aspect that we need to understand is what the tolerance of unethical behaviour is doing to ourselves as human beings. We need to comprehend and internalise the fact that the tolerance of unethical behaviour does not only harm others, but ultimately also ourselves. We become less than optimal versions of what we could be, and live less meaningful existences when we start taking unethical conduct as a given in our organisations, and ultimately in our lives.

Prof Deon Rossouw is CEO of The Ethics Institute, a Chartered Director, and Extraordinary Professor in Philosophy at Stellenbosch University.