- The former public protector spoke at the Momentum Investment Matters Conference on Monday.
- She said Covid-19 left a lot of pain, hunger and anger in South Africa and businesses needed to step in to ease that pain.
- Madonsela said South Africa's inequality stemmed from how things were done in the past, where there was little responsible and impact investing.
Former public protector, Thuli Madonsela, says business will have to be more just and serve society better as Covid-19 has left communities extremely fed up with inequality.
Speaking at the Momentum Investment Matters Conference on Monday, Madonsela said the virus had altered so much, leaving the average man on the street destitute and looking to see how big corporates would step up to address inequality now that Covid-19 had once again shone a spotlight on this problem.
"As we emerge out of Covid-19 there's going to be a lot of pain, a lot of hunger and a lot anger. And businesses need to see where they can step in to help ease that pain, to help people bounce back, so that we bounce back together," she said.
Madonsela said it was no coincidence that Europe often showed up for Africa, through grants and loans among other things, but this was an example of how to keep one's market alive. Madonsela said when businesses helped society bounce back faster, their recovery would be much faster too.
"Key to our problems is addressing inequality. So, every business has to say 'yes, I'm here for profit because the business of business is profit and we do understand that. But whilst I'm making this profit, how do I create a better ecosystem to make this profit'," said Madonsela.
The concept of stakeholder capitalism has been gaining momentum in SA for years. But the level of inequality exposed by Covid-19 - as families queued up for food parcels as many sank deeper below the poverty line during the lockdown - has had many public figures warning corporate SA about the looming implosion if the problem of inequality is not urgently addressed.
Madonsela said she often proposed to big business before, that companies should adopt a formula from an initiative in the US called Just Business. The philosophy of Just Business is that companies needed to be just and humane as they pursued profits.
"It is about making sure that as you pursue profit, at the core of your value system is justice. Environmental justice, justice to your staff, justice to the communities that support your business, justice to your shareholders and to your customers," said Madonsela, adding that the days of putting only shareholders and customers first were not the sustainable way to go.
Madonsela said part of the problems we face as a country came precisely from how things were done in the past, where there was little responsible and impact investing.
"Everyone was just looking at which product is going to give me the fastest profits, but it should be about which one is going to give me sustainable profits. The truth is that the one that is going to give you sustainable profits is not going to move fast," she said.
An example of the many challenges that Madonsela - who is also a Law Professor at the University of Stellenbosch - said businesses needed to step up and provide solutions for, was student housing. She said the chronic shortage of student accommodation was causing many students to sleep in toilets. She would also like to see companies run their own version of Dragon's Den or Shark Tank.
"Instead of the traditional way of investing in things that are already proven, be Joshua Doore for somebody you've never met," she said, adding that there were many enthusiastic unemployed graduates that community development forums in the township can bring to such an initiative.