Corruption remains an uphill battle

2017-10-08 05:43

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Given the diverse companies – KPMG, McKinsey and Bell Pottinger, among others – that have fallen foul of the law through their unholy association with the Guptas, one can conclude three things. First, ethics outplays technical knowledge and competence in the end. Second, for corruption to exist, there must be corrupters and enablers in the mix. Third, the private sector is not immune to corruption.

The codes of ethics and conduct that many leaders subscribe to in their various professions as auditors, accountants, lawyers, public relations practitioners and so on mean nought to a character who is morally bankrupt because they will always find ways to circumvent the rules and laws that exist – hence the saying: “You cannot legislate ethics.”

What has become clear through the Gupta scandals is that business and public sector leaders subverted their training and professional ethics to ensure that the dodgy deals happened at any cost. Those decisions ultimately undermined any professional stature they had. Even from my outsider’s viewpoint, it is clear that, had they applied their skills and knowledge without being ethically bankrupt, they would have reached different conclusions.

Thus, the training and development of leaders should not be just about imparting technical knowledge and acquiring competence. The focus should be on an internal journey and on assessing each candidate’s fitness to hold their positions.

When my company works with leaders, it is about their putting a mirror in front of themselves and asking: “Why should anyone be led by me?”

This question is pertinent now, more than ever, when the decisions of leaders can result in a firm’s reputational damage and the loss of thousands of jobs.

Corruption is a tangled web

To tackle corruption, there must be equal intolerance and disgust for both corrupter and corruptee, as well as for the enablers – as demonstrated by the actions of KPMG, which fired its South African chief executive and seven other top staff members. Lest we forget, the audit profession has been implicated in enabling many corporate scandals and failures over recent years. Enron, Bernie Madoff, WorldCom and Lehman Brothers are just some of the guilty parties on a long, long list.

Corruption is a tangled web. We cannot rely on whistle-blowers to expose misdeeds if they fear victimisation and reprisals, and if there are no effective penalties when corruption is exposed. The unrealistic expectations placed on management to post high returns and profits, regardless of local and global economic conditions, only add to the problem.

Although not an excuse, it seems as if management is willing to throw out its ethics to please boards and shareholders. The fact is, it is unrealistic for businesses to always increase their returns on equity to the levels required of them. Growth, like life, has its ups and downs. I believe that these impractical targets are contributing to the burgeoning unethical practices in our country, such as price-fixing, overpricing of services and retaining clients at any costs.

Corruption has always existed in South Africa. Apartheid survived as long as it did because there were private sector companies that continued to support the illegitimate regime and do business in and with South Africa. Sanctions were what finally forced the government to its knees. The Guptas’ dominance of our economy is not because of robust business models, but through patronage. Notably, the narrative around their corrupt behaviour is not spoken of as private sector corruption, even though this is the case.

The emphasis is placed on the state-owned companies and government departments that enabled these entangled corrupt relationships to thrive at the cost of billions of rands to taxpayers.

Will the war on corruption ever be won? Not while humans differ on what is right and wrong. Add to this that all-encompassing trait in some of them: greed. These factors, coupled with the powerful enablers in law enforcement and correctional services, have ensured that corruption is turned into an endless war.

Msomi is CEO of Busara Leadership Partners

Read more on:    mckinsey  |  kpmg  |  state capture  |  corruption

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