WHOSE PROBLEMS IS DEPLOYMENT SOLVING?

Lead article – Kris Dobie

When you have a problem, the logical thing to do is to try to fix it. 

As Gwede Mantashe points out: in 1994, when the ANC came to power there was a definite problem in that most (if not all) senior managers in public sector departments were white, and many were antagonistic to the new regime. It would be impossible to build a democratic state if those leaders remained in place. To fix this, the ANC took the approach of cadre deployment which had been remarkably effective in installing public service managers that were more sympathetic to the ideals of the government of the day, and more representative of South Africa’s population. 

Today, however, the problem of the day is corruption. If we do not solve corruption, we will not attain our democratic ideals. While cadre deployment was effective at solving the problem of its day, it is not the correct tool with which to address the challenges of today. 

The Ethics Institute has been doing research into public sector ethics in numerous studies since 2015. One problem that we have been trying to come to grips with is how to address ethical leadership challenges in local government. We are working on the assumption that most people who work in local government are ethical individuals, but that there may be systemic features of local government that make it difficult for them to actively live out their values. As part of the Local Government Ethical Leadership Initiative, we have therefore been asking the question: What makes ethical leadership difficult in local government?

The one theme that repeatedly comes up is that the politicisation of local government makes it difficult for people to live their values. And the one thing that causes the politicisation of local government is cadre deployment. 

Focus groups and interviews with hundreds of public servants paints a very bleak picture of a highly unprofessional environment in which politics trumps performance. The impact is not only on society at large, but also on an increasingly demotivated host of public servants who want to contribute and want to work in professional organisations. 

There are those who say that it is not the policy of cadre deployment that is to blame, but the abuse of this policy for factional and personal agendas. True cadre deployment, they assert, will always seek the best person for the job; someone who has the most competence, but with the understanding that they can work with the policies of the government of the day. 

The truth is that cadre deployment will never be implemented purely in its true ideological guise. In reality, the line between cadre deployment and patronage politics disappears very quickly, and people stop being deployed to address racial and ideological divides, and start being deployed to promote personal and factional agendas. Personal and factional agendas, by extension, are – based on existing research – very strongly associated with corruption. 

The narrative goes something like this: A certain faction will get voted in, and they will appoint people to positions of influence so that they can award tenders and jobs in line with factional demands. If they do not, the politicians can easily get rid of them. If they transgress in other ways, they are untouchable because they serve a particular purpose. Those who want to do the right thing cannot because their livelihoods (and increasingly their lives) depend on their silence. Then the next faction is elected, and the story repeats. In the process, the governance of the municipality is destabilised and eroded to the point of dysfunction. 

The research is noticeably clear on the fact that, far from solving anything, cadre deployment is a very real cause of corruption and plays a significant part in capture at the local, provincial, and national levels. 

So how, then, do we fix this problem?

The one challenge that we have is that politicians are responsible for appointing heads of department in the public service, as well as all senior managers in local government. This was a useful tool for redressing past imbalances after 1994 but is now also proving a useful tool for destructive deployment practices and the associated corruption. 

The first port of call is, therefore, to change the appointment processes for heads of department and other senior managers to ensure a greater focus on professional rather than political considerations (an EFF councillor once told me that he finds the deployment policy very strange, because there is no such thing as an ANC road, or a DA road, or an EFF road. There are just roads, and these need to be built by professional people). It is not so much a problem that politicians are unable to appoint professional people as it is a case of politics being unstable by its very nature. If each politician brings in his/her people, the organisations will struggle to achieve the levels of stability required for good governance and will find itself incapable of attracting the calibre of leaders required. We need to create greater distance between politicians and the appointment of administrative leaders, and we need to ensure greater stability of tenure for those senior administrative leaders who currently face the instability of five-year contracts that are seldom served to completion. 

The National Development Plan has already made some exceptionally good recommendations in this regard, as has the Professionalisation Framework for the Public Service. These are not recent problems, and the solutions are already entrenched in government frameworks. The only thing that is still required is implementation. 

If we want to fix the problem, the data is very clear about the fact that we should stop deployment practices and move towards a professional public service. If politicians are committed to solving the problem, they will implement the solution. That is, of course, if we assume that the problems that politicians want to solve are South African problems and not party-political problems.

 

Kris Circle

Kris Dobie is a Senior Manager: Organisational Ethics at The Ethics Institute

NOT SO INNOCENT UNTIL PROVEN GUILTY

Photo by Sora Shimazaki

“I have done nothing wrong. No court has convicted me on any charges!”

Does that sound familiar?

Of course it does!

That was roughly the parting message from former President Zuma when he was forced out of office on Valentine’s Day in 2018.

And as the Zondo Commission of Inquiry into State Capture was wrapping up its work, and more and more persons were implicated as facilitators of state capture, we heard more echoes of ‘innocent until proven guilty’. This defense could be heard from cabinet ministers and chairs of parliamentary portfolio committees. Even in the current President’s response to the theft at his Phala Phala farm, one can discern the undertones of this presumption of innocence until proven guilty.

The doctrine of presumption of innocence is a well-established principle in courts of law.

According to the Wex legal dictionary and encyclopedia, “presumption of innocence means that any defendant in a criminal trial is assumed to be innocent until they have been proven guilty. As such, a prosecutor is required to prove beyond a reasonable doubt that the person committed the crime if that person is to be convicted.”

There are certainly very good reasons for this rule being applied in courts. What I find worrisome is that this rule is also applied outside courts – at least in some contexts  – and seemingly almost consistently in parliament. There are, in my mind, two flaws with the application of this rule of court in non-court contexts.

The first flaw relates to the very important distinction between the law and ethics. The fact that a court has not (yet) convicted someone on a criminal charge does not mean that a person has not done wrong. If, for example, the police fail to identify a murderer, and there consequently is never a murder trial, it does not mean that the unidentified murderer has not done something seriously wrong and behaved in a highly unethical manner. Too often we also hear the excuse from business that irresponsible labour, social, or environmental practices are not wrong because there is no law that forbids them from engaging in such irresponsible practices.

Collapsing the distinction between legality and morality implies that unethical practices can be easily condoned simply because the law has not (yet), cannot, or will not pronounce on such matters.

It is mark of integrity to admit that you have done wrong even in the absence of criminal conviction, albeit that such marks of integrity have become a very scarce commodity – especially in the political arena in the ebb and flow of state capture.

There is, however, also a second serious flaw in applying the rule of ‘innocent until proven guilty’ in non-court contexts such as in public and private institutions. If applied in such non-court contexts, it can often paralyse organisations and prevent them from acting timeously to prevent further harm.

Take the example of a bank discovering that one of their employees is defrauding the bank and its clients. It is reasonable to expect the bank to intervene as early as possible and remove or suspend the suspect to prevent further fraud from occurring. Allowing the suspect to continue to work in the environment until the suspect is found guilty in a court of law would be irresponsible.

The implication, thus, is that if there is reasonable suspicion that something is wrong – or a high probability that unethical or illegal conduct is occurring – it provides sufficient justification for taking preventative action to prevent further damage from occurring.

In the final volume of the Report of the Zondo Commission of Inquiry into State Capture, it seems that the Commission supports these points of view.

In its criticism of the lack of action during the Zuma presidency by Parliament and also the then-Deputy President Ramaphosa, the Zondo Report seems to imply that there was more than sufficient suspicion that the former president was abusing the powers of his office to facilitate state capture. His reprimand of parliament and people in positions of power for not preventing such abuse of office is thus sound. If these institutions and persons had to wait for the legal charges to stick to the slippery former president before they were able to act against him, state capture would have continued unabated for much longer.

The same criticism also applies to the ‘step aside’ rule that is practiced in the ruling political party, which also came under attack in the final volumes of the Zondo Commission Reports.

The ANC’s step-aside policy determines that officials of the party need to voluntary step aside once criminal charges related to corruption have been instituted against them. Failing to do so would result in them being suspended from the party.

It seems as if the ANC internally opted for the presumption of innocence to expire once a person is criminally charged with corruption. This implies that the trigger for taking action against criminals inside the party is always pulled by the law enforcing institutions outside the party.

This raises the question of whether the termination of presumption of innocence should not rather be triggered much earlier, and that this should be done so within the party itself. It seems that the ANC’s internal disciplinary systems do allow for such a possibility, as part of the step-aside policy determines that in the face of serious allegations of corruption, members can be called to appear before the ANC’s internal Integrity Committee.

As the current Phala Phala related allegations against President Ramaphosa for omission or commission of wrongdoing play out, the internal disciplinary procedures will be put to test.

Until now, no criminal prosecution on charges of corruption has been brought against the President. But there are serious allegations that must be investigated by the law enforcement agencies. It would stand the ANC in good stead to burst the bubble of presumption of innocence earlier rather than later in this case, and launch its own internal investigation into these allegations as a matter of urgency.

It is thus important that institutions other than courts should not be paralysed by the court of justice rule of ‘innocent until proven guilty’ when serious allegations of unethical or illegal conduct is brought against their members. This applies not only to the ANC, but also to all other political parties, and all public, private, and civil society organisations.

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

IN THE MODERN WORLD THERE IS NO ENEMY BUT WAR ITSELF

Photo by NASA on Unsplash

By Dr Paul Vorster

When Robert Oppenheimer observed the first nuclear detonation, he famously quoted the Bhagavad-Gita, stating: “Now I have become Death, the destroyer of worlds”. Oppenheimer realised that unlocking the secret of the atom, a form of high technology in the modern age, had incredible repercussions. Humankind now had the ability to not only wipe itself out, but to eradicate every other lifeform on the planet. 

Since that utterance by Oppenheimer in 1945 the world has ushered in much more high technology, including the nuclear fission, personal computing, the internet, genetic engineering, mobile technology, wireless technology, machine learning, and the anticipated advent of a general artificial intelligence. 

This technological boom is in part a testament to human cooperation and specialisation. Since the detonation of the first atomic bomb, more and more specialised professions emerged in both the sciences and humanities. The more information we unlock, the more we need individuals focused solely on understanding such technologies and making advances. 

Just consider the sheer number of professions, careers, and skills that must exist in order to make our world run effectively. Think carefully about this. Our society has become much more specialised. People study for years to become doctors, nurses, airline pilots, engineers, and scientists (to name a few). As human beings we are inherently reliant on others for our electricity, water, healthcare, financial income, shelter, and food. While we could provide some of these things independently – depending on your specialisation – it is almost impossible to provide them all. Although we like to think that we can interact independently in the world, we are by no means independent. 

Rather, human beings are a highly interdependent species which is becoming even more interdependent with the advent of modern communications technology. Whether our interdependence brought about communications technology or vice versa is a good question. 

Often, we think of humans as self-serving (i.e., man is a wolf to man), but as Frans de Waal (the famous primate expert) would reiterate, that would be insulting to the wolf since they are – in truth – highly cooperative animals. It is interesting then that group species tend to develop cooperative structures and cooperation requires trust. Humans are quite cooperative, even with those they have never met. We become outraged when people are not treated fairly or decently (just check social media platforms). We stand up for causes, and we worry about people we see on our televisions or online; people we have never met. This empathetic behaviour towards our fellow humans is not an accident. It could be argued that our gregarious natures are a built-in component that compelled us to cooperate, and thereby improve our odds of survival as a group rather than deal with life alone. We noticed long ago that working together is not only a clever idea, but essential to our survival. It is also much easier, more efficient, and personally rewarding. The development of language further facilitated cooperation. 

We often take language for granted. It is interesting that language has enabled us to communicate more precisely and accurately and to share our minds with others (something that is still a little tricky). It helped us to interact more effectively, which allowed for more efficient communication and knowledge sharing. It facilitated further cooperation.

But cooperation has not just resulted in better chances for survival or specialisation, it has also made humans thrive. Our very civilisation is a testament to cooperation, reciprocal altruism, and mutual beneficence. What we could call ‘ethics’ is an offshoot of this. It has to do with ensuring mutual beneficence and cooperation. Without trust, the sheer scale of trying to cooperate becomes an impossible task. We could argue that trust is the ingredient required for effective cooperation. 

Historically humankind often cooperated in a limited manner only (i.e., within a tribe, clan, or village). Those considered outsiders were often maligned in countless wars, disagreements, and conflicts, but also merged and integrated into one another. As time progressed, we could argue that today we are a contemporary global village. Even ideas of nationalism within countries are beginning to wane with people now referring increasingly to themselves as citizens of the world instead of a country. We have – in essence – become joined at the hip as a global, interdependent community. 

But interdependence – although allowing for large scale interaction and cooperation – has a weakness. Interdependent states rely on one another for meeting critical supply chains and ensuring the world order. This is can only be accomplished if a global ordering mechanism based on trust and cooperation exists. The current war in Ukraine is an example of how breaking the global order has dire consequences. We have seen the impact of supply shortages, runaway inflation, and an economic slowdown. This is all due to a single leader deciding to rebel against the presiding world order by invading a neighbouring country.  

A hundred years ago the impact of a war would have been limited to the regions directly involved, leaving many other independent states unscathed or unaffected (excluding the world wars, of course). In the modern world, a war thousands of kilometers away directly impacts everyone. A regional conflict now has global repercussions. 

Consequently, we should be acting in this vastly connected world with a different premise. This premise is that there are no enemies in the modern world; the only enemy is war itself. As Oppenheimer alluded, we now have the power to annihilate everything on this planet. With that power, we need to continually find ways to ensure that trust in the world remains; that we cooperate towards mutual survival and growth. The alternative rings in a sobering reality: If our cooperation in an interdependent world should break down, we are doomed. 

Human cooperation and trust have created our sprawling civilisation. Distrust and discord can ruin it. The only thing standing in the way of a global breakdown of trust is to regain, rebuild, and enhance it at all costs. This can only be done if we look at the world not as one ruled by economy or politics, but one defined by an ethical imperative to do what is good for the ‘self’ and the ‘other’.

Dr Paul Vorster is a Senior Research Specialist at The Ethics Institute. He holds a Doctors Degree in Industrial and Organisational Psychology from the University of Johannesburg. 

It’s Not All Doom And Gloom – There Is a Silver Lining To Our SOEs

Photo by Simone Viani on Unsplash

By Lulama Qabaka

Articles written about state-owned entities (SOEs) in the last decade and a half always depict a bleak and overwhelmingly gloomy reality for South Africans. There are, however, small slivers of hope which don’t receive the limelight they deserve, yet which may inspire others to perform better. We consume so many negative stories about our SOEs that it clouds our ability to think of practical solutions which might yield positive outcomes. 

If we compare our SOEs to SA football, we can all agree that the level of SA football is nowhere near where it should be. At the very least, much like South African footballers who don’t have the requisite technical skills, SOEs tend to have insufficient skills with which to run SOE organisations efficiently and effectively. This is directly due to deployment issues whereby political interference means that individuals are put in positions of power without having the requisite skills with which to successfully execute their mandates. 

In spite of the lack of sufficient skills and autonomy, there are indeed SOEs which function optimally given the available resources. This is not unlike Mamelodi Sundowns who manage to excel on the field, which is a testament to the fact that if one places the right people in the right positions, the possibility for excellence increases exponentially. 

The sad state of affairs is that all SOEs are painted with the same scathing and cynical brush. As much as we harshly criticise the many poorly performing SOEs, we should invest as much energy into extolling the virtues of those SOEs that are performing well, rather than denying them their moment in the sun. 

These SOEs do – in fact – exist and may not be known to many since they are often overshadowed by the overwhelming amount of SOEs receiving negative coverage. You may be asking “Which SOEs are you talking about?”, and “Do they even exist in SA?”. While the answer is more complex than it should be, organisations such as DBSA, Telkom, Sasria, and a few others are good examples of ethically effective SOEs.

It is interesting to note that some of these ethically effective SOEs that The Ethics Institute has had the privilege of working with share some common traits. 

Good to excellent ethical cultures

Many of the abovementioned organisations have a relatively mature ethical culture, where ethics is taken seriously and proactively managed. Talking about ethics is part of the organisational ‘speak’ and usually observable to employees at all levels. They have a dedicated official/s who manage ethics and provide support to individuals by allocating ethics-related resources to enable them to meet their objectives. 

Governance

Governance is diligently managed and often features high on the agenda of Board and Executive meetings. Top leadership often works hard at subscribing to leading governance standards and legislation (such as adherence to the Companies Act and the King IV recommendations).

Empowered employees

Ethically effective organisations tend to have employees who work autonomously, without fear of retribution for carrying out their duties in good faith. Employees feel free to voice their concerns without being punished. While micromanagement does occur due to the somewhat bureaucratic nature of SOEs, this is not as prevalent as it is in SOEs with toxic working environments.

Relationship with facts

Rather than denying the existence of structural and ethical issues, SOEs who are willing to engage with the facts make conscious decisions to mitigate potential and current risks. They are also not afraid to make difficult decisions no matter how unpopular these might be. Management tends to act in the best interest of the organisation, rather than making selfish decisions (for example, favourable tenders for friends and family).

Renaissance

A closer glance at how these high-performing organisations came to occupy their current positions reveals that some of them went through a large-scale organisational overhaul. They were not afraid to make unpopular changes and even tolerated some mistakes. The end result was a positive start to the demands of the 21st century.

Bold leadership

Many employees and other stakeholders do not feel comfortable with the leadership in more successful SOEs. For example, leaders in these organisations create environments where there is less tolerance for unchecked greed and wrongdoing, as well as increased accountability for decisions made and actions taken. The majority of functional SOEs are led by individuals who are not easily swayed by external influences. Such leaders fully understand and appropriately respond to the core of the calling of SOEs, which is to utilise taxpayers’ money responsibly and efficiently.

So, what to do? How does one go about ensuring that SOEs don’t fall into familiar traps of failure as a result of bad governance? We have reached a point where we know where the stumbling blocks are. Similarly, we’ve identified the paths to success, and we know that if we continue to keep our heads in the sand, we are likely to plunge our country into further gloom. The few existing well-governed organisations, therefore, should function as guides on the route to the efficient running of our SOEs. 

The Ethics Institute has conducted a Differential Analysis on SOEs and has found that ethically effective organisations versus ethically ineffective organisations have the following elements in place:

  • Ethics accountability and responsibility: The degree to which employees are held accountable for unethical conduct and decision-making in a swift, decisive, fair, and transparent manner.  
  • Employee commitment to ethics: This refers to the degree to which non-managerial employees understand the importance of ethics for business and sustainable development and are committed to conducting themselves in an ethical way 
  • Senior management and middle management commitment to ethics: This is the extent to which leaders understand the case for ethics in business, are committed to acting ethically, and act as ethical role-models for non-managerial employees. 
  • Ethics talk: The degree to which an environment is created where employees can openly discuss ethics and the potential ethical consequences of business decisions and actions. 
  • Ethical treatment of people: The degree to which employees and other stakeholders perceive that they are treated with respect, dignity, and fairness. 
  • Ethics awareness: The degree to which employees are aware that ethics needs to be factored into the everyday functioning of the business in meeting organisational objectives. 

It should be noted that ethics alone will not ensure a fully functional organisation. Organisations that are ethically effective, however, tend to be more efficient and productive than those that are not. This may not be the ‘Aha!’ solution we all seek, but it is a good starting point for our organisations that have fallen by the wayside.

 

Lulama Qabaka is an Ethics and Anti-Corruption Specialist at The Ethics Institute.

Is Business the Last Stand Against Moral Chaos?

Photo by fauxels from Pexels

By Professor Leon van Vuuren

On 13 March 2022, Ed Stoddard – a team member of the Daily Maverick – commented on a recent World Bank report that listed South Africa as the most unequal country in the world. The gist of the World Bank’s finding about this country is that “Based on Gini coefficients of consumption (or income) per capita, South Africa, the largest country in the Southern African Customs Union (SACU), is the most unequal country in the world, ranking first among 164 countries in the World Bank’s global poverty database.”

The 2021 Corruption Perceptions Index of Transparency International (TI) published in January 2022 lists South Africa in 70th place among 180 countries. This statistic lists us as precariously close to being ranked with countries where corruption is endemic and pervasive. Endemic corruption could mean that eventually only the corrupt will do business, and that this business will be done with others who are also corrupt. The World Bank and TI reports should, therefore, be causes of major concern. We are – in essence – morally fragile as a country, and in dire need of reform.

From where could our moral help come should we seek to build a morally-sustainable society?
Should we turn to government to obtain moral direction, we get a lot of hot air and insignificant ethical role-modelling. Blind loyalty and astute politics override justice and fairness as primary societal values.

With an unemployment rate of at least 34% the risk of reaching a state of irreversible moral decay is nigh. Add to that the plight of the substantial number of single parent and even no-parent households. Simply put, the country is in a psyche of survival ethics. Bread today; ethics tomorrow.

Similarly, the education system cannot be relied on as being facilitative to moral development and growth. Energy spent on teaching the absolute basics and teachers’ competence that is often in doubt, leaves little room, willingness, and skills with which to stimulate moral reasoning.

Where does that leave business (“business” being an umbrella term for public and private sector organisations and state-owned entities)? Do business organisations have a role – and possibly even an obligation – to positively influence the ethics of society? And what about non-profit organisations, such as professional associations, that should be the obvious ambassadors of the ethics cause? Of course, there are also organisations for which fighting the good fight is the reason for their existence. Entities such as OUTA, Corruption Watch, and GGA (Good Governance Africa) take a firm stand that has resulted in many success stories. Organisations such as these are, however, few and far between.

Can business play a role in halting moral decay? Can business be the last stand? The Edelman Trust Barometer of 2021 shows that – compared to government, the media, and NGOs – business organisations are the only institutions that are both trusted (a positive score) and perceived as competent (somewhat above average) by the public. We can take much from this. The Barometer shows that there is a relatively solid base from which business can operate.

Business organisations seldom ponder on their potential ethical influence on society. Many members of organisations engage with various stakeholders on a daily basis. Primary stakeholders such as employees, customers, suppliers, communities, regulatory entities, shareholders, and environmental protection agencies affect organisations; and are similarly affected by organisations. These relationships all have an ethical dimension of sorts that could lead to trust.

To engender trustful relationships, business leaders should firstly examine the way that they look at the world. One of the very reasons for inequality and poverty is that leadership look after themselves and their shareholders first. This often causes harm to others and to society. The rich get richer, and the poor get poorer.

There is a tendency to perceive ‘business’ as referring to the private sector only. Keep in mind that 27 000 employees in the public sector earn more that one million Rand annually. This sector must therefore be logically assumed to be a major contributor to real inequality, as well as the inequality perceived by the jobless and poor. The public sector is not exempt from influencing the morality of society. After all, they exist to serve the country and its citizens.

As a most basic reform initiative, business organisations should look inwards and clean up their own acts. If they do not to this, they will be perceived as looking down upon others from the lofty heights of their moral high grounds instead of fulfilling their responsibility of contributing to the building of a country with a stronger moral compass than currently evidenced.

A simple first step is to question how to best utilise the power business organisations could potentially wield. Is this power viewed by others as arrogant and selfish? If there is even a hint of this perception, organisations should consider the respect that they could earn through humility. To earn respect in this way, they should be cognisant of what they spend their money on. There is no humility (and thus, no respect) if billions are spent on gleaming headquarter buildings soon after a spate of retrenchments.

Practically, the point of departure should be to build on existing successes by designing and implementing concerted and structured collective action efforts with civil society, professions, and corruption watchdogs to promote ethical behaviour. Business, due to sheer size, power, and omnipresence should take the lead in this regard.

Many organisations are highly successful at cultivating a health and safety culture and thus minimising work-related deaths and injuries. Why can the same logic not apply to building strong ethical cultures? Organisations with strong ethical cultures can be hugely influential in contributing to societal ethics. For example, should the power vested in organisations have an ethical foundation, they have a right to insist on ethical behaviour by their suppliers, among others.

Ethical cultures are marked by the moral courage to assertively do business only with likeminded stakeholders. Organisations with such mindsets promote ethical behaviour and deal with those that transgress swiftly, decisively, transparently, and consistently. Achieving such cultures are easier that one may think – the majority of people and organisations are inherently good. There is often little convincing required.

The late Thembekile Kimi Makwetu (who served as Auditor-General of South Africa and championed ethical organisational culture not only in the public sector, but across all organisations in South Africa) uttered these words of encouragement: “For me to live ethically, is to recognise as a business that you are part of an integrated whole. There is no other option but to live ethically because it gives you an opportunity to sustain the achievements of what the business wants to do. A business is not there purely to make money for those who own it today, but it is also one of the institutions and instruments in a society that is mobilised and organised to create a life for citizens to come.”

It is clear that moral revival will not happen in a single month, year, or decade. It is not too late to start, though. Business organisations should realise that they may collectively be the last stand against unethical behaviour and further moral decay by aspiring to contribute to an ethical and thus sustainable society.

 

 

Prof. Leon van Vuuren is an Executive Director: Business and
Professional Ethics at The Ethics Institute. He holds a Doctorate of
Industrial Psychology from the University of Johannesburg.

 

Mr President, Why Should we Believe You?

Photo by Yan Krukov

“Authentic leadership is revealed in the alignment of what you think, what you say, and what you do.” — Michael Holland

The Nation eagerly (or maybe not) awaited President Cyril Ramaphosa’s State of the Nation Address (SONA) on 10 February 2022. Many may recall his adoption in 2018 of a phrase from a song by the late Hugh Masekela, “thuma mina” (“send me”), as his manifesto. At the time he asked 57 million South Africans to allow him to decisively deal with fraud and corruption, lack of service delivery, and other endemic social ills such as poverty. The Nation was excited and hopeful, and who could blame them after the dark years of the Zuma reign?

Unfortunately, his promises since – especially regarding addressing fraud and corruption – have merely become the chorus of a badly-written song that invokes brain/earworms: we’ve heard the same refrain so many times that we could almost sing it in its entirety by rote. We were, therefore, also not surprised when the same song was played yet again at SONA 2022.

It is said that trust (that which is ‘uncompromised by doubt’) is a leader’s currency. If leaders are not trusted, subordinates will not believe that they have their best interests at heart or that they will deliver on their promises. We are all familiar with the saying that trust is earned, not given. It is earned when leaders show authenticity, when they lead by example, and when they act on their words and their promises. Authentic and trustworthy leaders inspire others, talk about their values, and put said values into action and apply them in their decisions.

President Ramaphosa has been described as a strategist – a remarkable and invaluable trait for any person in a leadership position. However, strategies need to be focussed into action plans in order to achieve the strategic outcomes. Since the inception of his term as president, little action has been observed. Stating, in his 2022 SONA, that “none of our efforts to revive our economy will succeed if we do not tackle the scourge of corruption once and for all” is not an earthshattering revelation. Everyone already knows that, Mr President. Telling us that corruption has weakened the ability of the State to deliver services is also not unknown.

To be worthy of trust, leaders need to be clear about their purposes and the principles by which they lead. They must not succumb to pressures that could divert them from these principles and their ethical beliefs. Over the last few years, many of South Africa’s citizens have stood in disbelief because clearly corrupt, high-profile individuals are still walking free. Is that part of the strategy for the governing party to remain in power? Is the president of this country submitting to pressures that lead him astray from his values? Alas, only he can answer that.

Maybe one can start believing the President’s promises about addressing the endemic fraud and corruption in South Africa again when he consistently demonstrates the essential characteristics of authentic leaders, namely:

  • Being focussed on serving all constituents;
  • Placing the interests of those they serve above their own;
  • Showing integrity, telling the truth, and admitting mistakes;
  • Quickly adapting to new realities;
  • Being resilient and bouncing back when things go wrong;
  • Deeply caring for those they serve;
  • Encouraging constructive feedback and acting on it; and
  • Demonstrating moral courage, i.e. doing the right thing even if it is not self-serving to do so.

Stephen Covey commented in a recent article, ‘The New Role of Trust in the Pandemic’, that “trust is baseline humanity … and we need it to solve our problems”. Trust in the President and the law enforcement agencies stands central to addressing fraud and corruption in this country. The new dawn seems to have come and gone; we are still waiting to understand where the President wants to be thuma mina-ed to. We are still waiting for action to give effect to the promises of the last four years.

Having an epiphany that “we must now do everything in our power to ensure that [State Capture and the erosion of State institutions] never happens again” means nothing until South Africans see the corrupted in orange overalls. We are waiting with bated breath for 30 June – the day when South Africa

will be presented with an action plan for dealing with the corrupted responsible for stalling South Africa’s economy growth and denying citizens their Constitutional rights.

The onus is on you, Mr President, to show that you are an authentic and trustworthy leader.

 

Liezl BA Circle

Liezl Groenewald is a Senior Manager: Organisational Ethics at The Ethics Institute. She is also the author of the Whistleblowing Management Handbook, and co-founding director of The Whistleblower House NPC.

ARE WE GETTING USED TO THE HOT WATER?

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.

ETHICS RECOVERY – WITH A STATE CAPTURE HANGOVER

Prof. Deon Rossouw

The decline of ethical standards in organisations in South Africa has been thoroughly lamented over the past decade. The lamentations raised to a crescendo as revelations about corrupt practices were revealed before the Zondo Commission of Inquiry into State Capture.

There could be no doubt that the period of state capture seriously damaged the moral fibre of organisations in the private, public, and state-owned sectors. It is unlikely that, in our history as a democracy, there have been so many cries for the restoration of ethical leadership in our organisations.

But there may be hope that the corner has been turned – at least in the private sector in South Africa.

The Institute of Business Ethics, based in London, recently published their annual Ethics at Work survey report. Data for this survey was collected by an independent research agency and included the perceptions of more than 10 000 employees from 13 countries. For the first time in the history of this well-known survey, South Africa was included in the 13 countries that participated in the survey. The other 12 countries that participated in the 2021 Ethics at Work survey were: Australia, France, Germany, Ireland, Italy, the Netherlands, New Zealand, Portugal, Spain, Switzerland, the United Kingdom, and the United States of America. The Ethics Institute, based in South Africa, was the South African partner in this multi-country survey.

When South Africa is compared with the other countries that participated in the survey, we did remarkably well – at least in some of the aspects regarding organisational ethics that were covered in the survey.

The one area where South Africa outperformed all other countries was in terms of ethics management interventions. Four aspects of ethics management in organisations were covered in the survey. In three of these aspects South Africa were ranked first among the 13 countries; namely, the adoption of written standards of ethics, the provision of facilities to report unethical conduct confidentially, and the offering of advice to employees who are seeking advice about behaving ethically at work. On the fourth aspect (the provision of training on ethics) South Africa was ranked second – only one percentage point behind the USA. Overall, it is thus quite clear that South Africa outperformed all other countries when it comes to introducing formal ethics programmes in business. No small feat!

Should one start speculating about possible reasons for South Africa’s stellar performance in managing ethics in business, another recent survey that was published at about the same time might shed some light. In November 2021, the second Social and Ethics Committee Annual Trend Survey was jointly released by the Institute of Directors in South Africa and The Ethics Institute. In this survey it was found that ethics management is the topic that receives most attention in meetings of Social and Ethics Committees. Social and Ethics Committees were first introduced in 2012 in South Africa as a mandatory statutory board committee in all listed, state-owned, and public interest companies. This finding indicates that organisational ethics do indeed enjoy considerable attention at governance level in South African businesses.

It is, however, not only on governance level that ethics management is enjoying support in South Africa. In the Ethics at Work Survey, South Africa also outperformed all other countries as far as management support for ethics is concerned. South Africa ranked first for both the seriousness with which senior managers attend to ethics, and for the support that employees receive from middle managers in following the ethical standards of their organisations.

However, there was not only good news in the 2021 Ethics at Work survey. There were also several rather disconcerting findings. I would like to highlight three of these.

Firstly, South Africa ranked first for employees being aware of misconduct in their organisations. Thus, despite high levels of awareness of ethics standards in South African businesses, and despite leadership and middle management support to do the right thing, unethical behaviour and practices still prevail. One mitigating factor in this regard may be that it is exactly the high levels of awareness of ethical standards that make South Africans more sensitive to observing misconduct in their organisations. It was also encouraging to see that South Africans were quite willing to report the misconduct that they observed via their internal and external reporting mechanisms. In fact, South Africans ranked second highest for their willingness to report misconduct in their organisations.

Secondly, and much more worrying, was the finding that South Africa ranked second highest for employees feeling pressured to compromise the ethical standards of their organisations.

Thirdly, and equally concerning, was the finding that South African employees felt – more than in any of other countries that participated in the survey – that honesty is not practiced at work.

This leaves one with the troubling question: How can South African businesses do so well with their ethics management programmes, but perform so poorly when it comes to the actual prevalence of misconduct and to compromising ethical standards and honesty in the workplace?

The explanation to these seemingly contradictory findings might be related to a hangover from the era of state capture. South Africans might have become so used to the unethical practices associated with the era of state capture, that old bad habits still prevail and are actively endorsed as part of the ‘way we do business here’.

There is, in fact, some evidence in the findings of the Ethics at Work Survey that indicate that South African employees have a higher tolerance of unethical practices compared to employees in other countries. When asked to respond to statements related to tolerance for unethical behaviour, South African employees ranked first for indicating that minor breaches of rules are inevitable in modern organisations, as well as for indicating that if an organisation should crack down on every minor breach of rules, it would soon find itself without any staff.

These findings are strong indicators that a certain level of misconduct has become quite acceptable to most South Africans. It is not regarded as serious.

As long as this attitude prevails, one should not be surprised to see a discrepancy between excellent ethics management programmes, but high prevalence of – and tolerance for – minor unethical misconduct in our businesses.

 

Deon Circle

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

Organisational Ethics During the Covid-19 Pandemic

In times of crisis, Organizational Ethics becomes even more important because the problems organisations face become more complex and difficult to solve, and the decisions they must take become more urgent and riskier. COVID-19 has taken many organisations into unchartered waters and has demanded courage, flexibility, and ethical leadership from management in steadying the ship. Leaders have been forced to navigate the murky waters of the COVID-19 crisis by making massive changes in order to bring their organisations to recovery, assess the needs and interest of their stakeholders, and find creative and innovative ways of thinking.

GMA Ethics Office

Gautrain Management Agency (GMA) is a Provincial Public Entity established in terms of the GMA Act (Act 5 of 2006) and is listed under Schedule 3 (c) of the PFMA. The overall goal of the GMA is to manage, coordinate, and oversee the Concession Agreement for the Gautrain Rapid Rail Link Project, as well as assisting the Gauteng Province and other organs of State in realising their integrated public transport, and rail-related and smart mobility objectives.

The Board identified the need to establish an Ethics Office in the GMA in 2019 in order to assist the Board and the Social and Ethics Committee in monitoring and overseeing the ethics performance in the GMA, and to coordinate ethics management activities at an operational level. The GMA Ethics Office started by conducting an Ethics Risk and Opportunity Assessment during 2019 to determine the status of ethics in the GMA, and to evaluate its ethics management systems. The results of the assessment were used in the development of the ethics management strategy, review of ethics codes and related policies, and the design of targeted training on ethics management.

Challenges Imposed by COVID-19

When COVID-19 emerged in South Africa during March 2020 and the National Lockdown was imposed, the review of Ethics Related Codes and Policies had already been completed, and the Policies were approved by Board. Some of the challenges imposed by COVID-19 included:

  • Closure of businesses and remote working – Levels of uncertainty and lack of access to ethics awareness campaigns by employees.
  • Training and Awareness Sessions could no longer be conducted face to face.
  • Delays in the implementation of Ethics Management Interventions.

Ethics Interventions Implemented by GMA Ethics Office to Address COVID-19 Challenges

GMA prides itself on being a high-performing and innovative organisation whose core values are caring, excellence, learning, and leadership. These values are not only espoused but are also discussed and implemented by all members in the GMA. In living up to the value of excellence, the GMA Ethics Office adopted technology as an important tool in the implementation of the Ethics Management Programme. Digitisation assisted in improving employee access to ethics information, documents, and training material. Digitisation also assisted with the development of Application Systems by replacing traditional manual processes. A SharePoint Site was developed to house all the web applications developed, Ethics Management training materials, Policies, and the like.

All Ethics Interventions implemented by the GMA Ethics Office to address COVID-19 challenges are depicted in the diagram below:

 

The use of technology greatly enhanced the implementation of the Ethics Management Programme and increased employees’ participation in the ethics management interventions.

Lessons Learnt

The lessons learnt during the Pandemic and what the Ethics Office will take forward in enhancing governance and ethics management practices include:

  • Importance of keeping ethics talk alive – During a crisis, organisations must rely on their ethical culture to survive. Ethics talk assists employees in navigating ethical dilemmas and empowers them with tools to detect, prevent, and report unethical conduct.
  • Focus on the opportunities – COVID-19 Pandemic created many challenges; however, many opportunities were also created, i.e., remote work has changed the workplace and introduced a better work-life blending.
  • Innovation and creativity – Use of technology was part of the solutions to enhance the Ethics Management Processes and fast-track the achievement of the GMA’s ethics objectives.
  • Promotion of ethics in the organisation – Impact on ethical maturity, especially in a time of crisis, to guide and facilitate effective decision making.

In summary, while the Covid-19 Pandemic imposed new challenges to a young organisation and an equally young Ethics Office, it also provided opportunities to innovate and excel by providing new tools and methods of applying and maintaining the highest possible ethical standards at the GMA.

Objective Selection of Board Members

Restoring Trust in SOEs Through the Objective Selection of Board Members

Lulama Qabaka & Leon van Vuuren

The Ethics Institute – October 2021

 A story going around relates to a boy who, upon his return from school, is asked by his mother how his day went. The boy indicated that every child in his class was asked to tell a story about his father and what work he does. The mother then asked the child: ‘So what did you say that dad does?’ He replied, ‘I said that he is a stripper at a nightclub’. In shock, the mother asked why he had lied about it. He replied that he did not feel that he could tell his classmates that dad works for a state-owned enterprise (SOE).

The fact of the matter is that SOE employees often feel ashamed by the reputational damage incurred by their employers. This breach of trust extends beyond employees to other stakeholders: industry regulators, clients, suppliers, and the whole of society (in fact) feel the brunt of the loss in trust in SOEs. While it is well-known that the vulnerability of SOEs is often exploited for dubious intentions, the greatest resultant ‘sin’ is abuse of taxpayers’ – who are the ultimate owners of SOEs – money. Responsible and accountable behaviour by SOEs fulfils the ethical obligation that such institutions have to the taxpayer.

The primary challenge, of course, is that the government is the sole shareholder of many of our SOEs. This gives the relevant Minister – as shareholder representative – the unilateral right to appoint non-executive members of the Board of Directors for the SOEs that reside under their oversight. The practice makes sense, to an extent, as the government is the custodian of SOEs as assets to the country.

Whilst we agree with the President that a nomination or deployment committee should be established, this function does not necessarily have to reside with the ruling party. The net negative effect of this process is that the party can nominate its own people, and the country is consequently deprived of the best possible candidates to serve on boards of SOEs. A legitimate appointment process will require much more accountability and transparency than the current practice.

The extent to which the system is inherently problematic has been witnessed in the State Capture Commission of Inquiry where boards were shown to fall short of discharging their duties due to political interference. One of the more alarming examples is that of a former Eskom Chair who was allegedly told to call off a board meeting. The said board member belonged to the ruling political party, as did the government official who told him to call off the meeting. During his testimony at the Zondo Commission, this witness defended the ANC’s use of cadre deployment as an accepted standard in the country. If Board Chairs had been independent and had sufficient positional power, they could have prevented such an obvious abuse of power. Government representatives have no right to interfere with either the board or the day-to-day running of an entity.

The Organisation for Economic Co-operation and Development (OECD) guidelines on Corporate Governance of State-Owned Enterprises recommends that board members should not have any existing ties to the highest levels of government and should be appointed on professional merit.

It should be a precondition for SOEs to carefully vet board nominees. It is imperative to ascertain – prior to any appointment to a board – those potential candidates have verifiable skills, experience, and the capacity to discharge their duties with diligence (which should be the most crucial selection criteria). The ICRAFT characteristics (integrity, competence, responsibility, accountability, fairness, and transparency) established as guideline in Principle 1 of King IV (which also applies to SOEs) must be understood and translated into observable attitudes and behaviours in order to ensure legitimacy, adequate control, and sound performance.

In South Africa, it is the prerogative of a minister to influence decision-making by unquestioningly enforcing nominations, selection processes, and appointments as prescribed by the ruling party. Since the State is the main shareholder of many of our SOEs, some political interference seems inevitable. This does not absolve the State of the ethical obligation to the country to nominate their preferred board members in an objective and transparent manner.

The starting point for such nominations is to apply the precedents set with the recent transparent appointment processes applied to key functionaries – the FSCA Commissioner, the Head of the NPA, the SARS Commissioner, and (most recently) the Chief Justice. The imminent appointment of an independent, competent, and trusted Public Protector is likely to further bolster the notion of objective appointments.

For the positions mentioned above, an independent panel of relevant stakeholders and experts were chosen to nominate suitable candidates who were all subjected to the same rigorous screening and interviews. There were a few sparks of objection by certain stakeholders, but overall, the process appears both valid and legitimate. While we must give the President credit for taking steps in ensuring that a transparent process was followed in nominating and electing the heads of NPA, SARS, as well the Eskom CEO, many state-owned institutions need to follow a similar methodology for key appointments.

The OECD guidelines on governance in SOEs propose the following process for selecting Board Members:

  • Set clear minimum criteria for board nominations.
  • Informally vet or advise on ministerial board nominations; and
  • Establish nomination committees.

This essentially means having nomination committees that consist of both government and non-governmental representatives. In centralised governments, nomination committees’ vet potential board members and provide the relevant minister with a shortlist of candidates. In more decentralised governments, permanent and independent agencies are formed. Their key responsibilities include vetting, nominating, and interviewing potential candidates. These agencies also provide training to the incoming candidates. It is, however, recommended that proper background checks, lifestyle audits, and appropriate scientific selection methods be applied to complement the key responsibilities of the agency.

According to the OECD, standard practice is to use private sector guidelines when selecting board candidates. This applies particularly to commercial SOEs such as Eskom, Transnet, and Prasa. The OECD further recommends that SOEs follow the same practice followed by several listed companies which entails having external nomination committees advising their annual general meetings. These committees may be comprised of both civil servants and private sector representatives.

South Africa has many capable and willing leaders who have the country’s best interest at heart. Numerous key professionals doing well in the private sector are willing to offer their skills and capacity to fix some of our SOEs where ‘fixing’ has sustainable development and renewed trust as key outcomes. SOEs have lost a lot of goodwill with the general public. While we may not be able to fix our SOEs overnight, a good starting point would be the formation of strong and independent governance structures. This first step would not only give confidence to ordinary South Africans but to the world beyond our borders; a world which is increasingly sceptical about our ability to run our institutions competently and ethically.

Lulama Qabaka is an Ethics and Anti-Corruption Specialist at The Ethics Institute.

 

Prof Leon van Vuuren is an Executive Director: Business and Professional Ethics at The Ethics Institute. He holds a Doctorate of Industrial Psychology from the University of Johannesburg. Prof van Vuuren is the author of The Ethics Office handbook, and co-author of the Code of Ethics and Institutionalising Ethics Handbooks.