Corruption is ‘a successfully coordinated project’ – Nhlanhla Nene on trust

Former finance minister Nhlanhla Nene.
Former finance minister Nhlanhla Nene.

An active citizenry is indispensible in holding government to account and for building trust, former Minister of Finance Nhlanhla Nene told a recent forum at the Gordon Institute of Business Science.

“A society of sheep begets a government of wolves,” he told the gathering.

Business and government should pursue common values in order to build South Africa.

The trust deficit in South Africa

Founder of Gibs’ ethics and governance think tank, Gideon Pogrund, said that while we live in a world where trust is in short supply, the trust deficit is especially serious in South Africa. This is a symptom of a deeply polarised society, which threatens the conditions for future success.

Moving ethics from the periphery to the centre would ensure compliance becomes less of a goal and more of an outcome, he added.

Business and government must espouse common values and focus on the same things in order to build South Africa, Nene said.

“I don’t think we’ve done enough to find each other, because when we get an opportunity we use it for finger pointing instead of trying to be able to see the other party.”

“Trust begets trust,” Nene added. Government and the private sector need to nurture their symbiotic relationship, as there are many with a vested interest in the success of the partnership and “many of us who are keen to build our moral values and our country,” he said.

“There are things you can’t exchange for anything. Trust is one of those, as is integrity.”

Laurie Dippenaar, founder and Chairman of FirstRand said it was important not to generalise about government corruption, as departments such as National Treasury and the South African Reserve Bank manage themselves ethically and have clean track records.

Nene called corruption “a very successfully coordinated project”.

Even with sophisticated corporate governance guidelines for the private sector, and legislation such as the Public Finance Management Act, corruption could not be legislated away.

“While some middle managers are victims of corruption, others are active proponents of it,” he said.

How to build and encourage trust in business

Equipping employees with a set of values is more likely to result in ethical behaviour than attempting to control them with rules, Dippenaar said. “Values are more important than rules as they will guide people how to act in every situation.”

Staff would then, in turn, reward the organisation with their trust.

“Trust is often taken for granted. But when it isn’t there, there are dire consequences,” he said.

Chief executive of Woolworths South Africa Zyda Rylands explained that building trust is a journey that “starts with an incredible set of values,” and is earned over time. While creating an ethical and trusted organisation trust starts with leadership, it cannot just be leadership that gives effect to the execution of the strategic vision: “Do it deliberately and execute through the business, creating the correct collective accountability,” she said.

Nene said building institutions to be centres of excellence meant each individual in the organisation must understand their role and contribution to a higher purpose.

The role of leadership in creating trust

The tone set by leadership at the top of an organisation is fundamental to fostering trust. Lynn Paine, Harvard Business School Professor and Senior Associate Dean told the gathering it takes a trustworthy person with a particular set of skills and competencies to build an organisation that is also trustworthy.

“Senior executives need a high capacity for responsibility under conditions of complexity and uncertainty,” she explained. They need to be able to make ethics a central part of their decision making process in complex situations with conflicting responsibilities.

While business leaders have economic, legal and ethical responsibilities, they need to make decisions that are simultaneously sound in all three of these components in order to build a long-term sustainable organisation.

“Ethics can encourage us to think in new ways and can force creativity and innovation,” she said.

Leaders should attach tremendous value to the tone they set at the top of the organisation, Dippenaar said: “Everything the leadership does filters throughout the organisation. Every action is a signal you send out.”

Rylands reiterated that messages encouraging ethical behavior by leadership need constant reinforcement to build trust.

“Leaders cannot simply abdicate after they have spoken. You have to act and check at all levels of the organisation,” she said.

“Leading by example permeates everything and you must be consistent in everything you say and do.”

  • City Press is a media sponsor of the Gibs forums.

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