Johannesburg – Businesses should hold those implicated in allegations of state capture to account and no longer be silent on challenges facing society, said Nedbank chief executive Mike Brown.
He was speaking on the role of banks and business in securing the future of the country at the Nedgroup Investments Summit in Sandton, Johannesburg on Tuesday. Brown, who is also part of the CEO Initiative, spoke out against state capture and called for an investigation to find out the truth.
“That is the only way we will find out what is happening in the state capture environment,” he said. Brown indicated he is not confident that inquiries into state-owned enterprises (SOEs) will reveal much.
He shared on what the CEO Initiative had done, alongside former finance minister Pravin Gordhan, under the leadership of Jabu Mabuza to stave off a downgrade. Among the projects established is a fund for small and medium enterprises, with R1.5bn committed. The Youth Employment Scheme (YES) is an example of an initiative where young people will get work experience.
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“It was all going quite well, but then we were rudely poked in the eye when the president recalled the finance minister from an investor roadshow and immediately after, changed the finance ministry and the country was unnecessarily downgraded purely as consequence of political events,” he said.
But despite this, the CEO Initiative has regrouped to deliver on the SME Fund and the YES Initiative as this is important for South Africa, he explained.
The CEO Initiative has set new ground rules for engagements with government and has extended its focus to the issues facing SOEs. He stressed that the mismanagement and amount of theft of resources is astounding. “And it is certainly a massive threat to the fiscal sustainability of our country.”
Brown suggested ways that economic growth and job creation can be achieved. This starts with an environment of ethical and inspirational leadership. This kind of environment will create confidence, a foundation for investment, he explained.
Investment coupled with education will then create economic growth and jobs. But Brown said often in engagements with government, it is apparent that creating jobs and economic growth is viewed as the starting point.
“Actually to create jobs and growth, we need to start at the top with leadership.” This will drive confidence and investment. “That is the only way to sustainably create jobs as businesses in our country.”
Breaking the silence
He said that when it comes to social change, businesses should no longer be silent as they were in the 1990s and early 2000s. “Every single business leader and everyone in business must recognise business is not separate in any way to society.”
Business leaders have an obligation as leaders in society to defend institutions and to be vocal about justice and the rule of law. “The foundation of any risk management decision is country risk, and the foundation of any country risk assessment is the rule of law.”
Businesses should behave in a way to improve lives in society; if they don't, they will lose their social licence to operate, he warned. He listed the ousting of Bell Pottinger as an example of society’s power in revoking such a licence.
He explained that the role of any corporate is to “balance the tensions” of delivering to different stakeholder groups, and not just shareholders. Businesses can improve the lives of citizens by providing access to goods and services at competitive prices, employing and skilling workers, and paying taxes which are vital to the economy and the country.
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