Page 45 - IRMSA Risk Report 2020

EXPERT OPINION

CHRISTELLE MARAIS
EXECUTIVE DIREC TOR, LUCIDUM

In order to achieve an equitable society premised on sustainable economic growth, it is imperative that all stakeholders in society play their integral
role in contributing to the national socio-economic imperative. This means institutionalising, in the DNA of our organisations, a culture of corporate
citizenship as outlined and prescribed in King IV. For SA to realise a prosperous common future, corporates must see themselves as integral parts
of society. They must acknowledge that their decisions and their daily business practices have far-reaching impacts beyond the confines of the
organisation and their immediate stakeholders. To develop organisations that are good corporate citizens, the country needs governing bodies
that act ethically and effectively and organisations with deeply embedded ethical cultures. Such good governance is critical for all, including:
• Private sector organisations that have a critical role to play in distributing prosperity throughout our economy;
• Public sector organisations (including parliament itself) that should spend citizens’ money on service delivery and create an enabling environment
in which society can thrive;
• Labour organisations that protect the rights of workers in the economy; and
• Civil society that plays an important role in elevating the responsible treatment of citizens in different interest groups.
Apart from threatening the achievement of the National Development Plan objectives, the risk of increasing failures in governance poses an existential
threat to all levels of South African society, as sustainable public sector institutions (local, national, and provincial) are an essential condition for the
reduction of poverty, enablement of economic growth, economic transformation, and job creation, amongst others. Given the recent failures in the
public (e.g. PRASA, SAA, ESKOM) and private (e.g. Steinhoff, KPMG, Tongaat Hullet) sectors, we as a country may have run out of the luxury of time to
resolve our governance failures, which means that we can no longer avoid the negative consequences of the governance failures of the past few years.
Leaders in all spheres of life must set the tone at the top and must jealously protect the ethical and moral fibre of our society as a crucial enabler of a
resilient and sustainable society.

Our future depends on strong leadership across all sectors of our economy. In his book, Mr Mcebisi Jonas carefully analyses what is needed from our
leaders to realise a better future. This includes the following:

• While we struggle with our own complexities as a country, there are very few “big ideas” – simplistic solutions give rise to populism, resulting in
negativity as empty messages becomes over-personalised (this is true not only of SA but also internationally); and
• The national consensus that enabled our democracy more than 25 years ago has unravelled because of:
• Our failure to deliver services as inadequate economic growth has reduced our spendable income as a nation;
• Our failure to protect the functionality and effectiveness of the State at all cost; and
• A breakdown in the relationships between the four constituencies mentioned above.

As we continue down this slippery slope, we need to recognise that we have been boiling like the proverbial frog without realising how closely to the
fire we are playing. As a country, we have breached our risk appetite and tolerance levels and we now need to take some pains, as a collective, to ensure
we do not breach our ultimate risk-bearing capacity level (beyond which we can no longer exist as a functioning state). If we continue down this path,
chronic decline, eventual disruption, and ultimate implosion is a certainty (a slow death is still death). As a country, we therefore need a new consensus:
we need to think constructively and collectively. A key factor in this is consensus-building leadership instead of polarisation – we all need to walk in the
same direction.

We are a country without a national agenda and our mechanisms for consensus building are weak. As a society, we gave too much power to our
politicians in terms of our political, economic, and social well-being. We need to take that power back and keep our politicians accountable to deliver
on our well-being – not the other way around. We need to take back the power that we have given to political parties in terms of our socio-economic
well-being and we should be able to hold our politicians to account. That also requires of us as citizens to take a hard look at ourselves and ask whether
we have been very comfortable as armchair commentators, instead of taking hard stances against those who fail to deliver on the promises made when
we voted them into power. This will require ethical and visionary leadership in all walks of life and an unwavering commitment to the principles of good
corporate governance that actually achieve the outcomes of an ethical culture, good performance, effective control, and legitimacy in the eyes of society.

Our revival should focus on a few key areas:

• Job creation should be the focus of our national economic policy, not the
result of what we put in place. This includes the alignment of our skill levels
with the jobs we create;
• We need coherent incentives that distribute benefits fairly, but with the
understanding that all will take some pains, collectively and individually, to
bring about our turn-around;
• Policy consistency is key, and we need to focus our attention first on those
issues that can be easily resolved with little conflict; and
• A strong, vibrant civil society and active citizenry is key.

Sources: Mcebisi Jonas – “After Dawn – After State Capture”, King IV (IoDSA), IQ
Business “Credible Leadership and Good Corporate Governance: An Ethical Dilemma”
by Theko Moteane (2017)
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