Do We Have 20/20 Vision When It Comes To Ethics?

When it comes to fighting corruption in both the private and public sectors, South Africa would seem to be something of an enigma. On the one hand, the 2019 South African Business Ethics Survey found that there has been an increase in unethical behaviour at work from 18% in 2009 to 31% in 2019. However, the number of employees who not only saw but, more importantly, reported this behaviour rose from 48% in 2016 to 55% in 2019. So, you’d think that, overall, in the fight against corruption and unethical business practices, we’re starting to claw our way slowly towards a win. And yet, it’s painfully evident we’re not.

As Adriaan Basson writes in this article for News24.com, “Despite some damning forensic reports, we are yet to see a powerful CEO in the dock for stealing from the public, his shareholders and/or clients, or for the loss of life.”

He goes on to highlight the fact that, despite companies such as Tongaat Hulett, Murray & Roberts Construction, Steinhoff and Sekunjalo, among others, all having been investigated for serious criminal conduct in the past 12 months, not one of these companies’ CEOs has been charged. As a result, all are all continuing to live the high life, effectively giving the proverbial finger to those trying to bring all their corrupt chickens home to roost.

So, although government and other regulatory bodies are making all the right noises when it comes to exposing and punishing large scale ethics breaches, very little is actually changing, and we are as far away from embracing a national culture of ethical business practices as we’ve ever been.

Why is this? Do we really even know – or care - what is meant when people talk about “ethical business practices? Or have we become a nation infected with such moral muteness that we can’t quite bring ourselves to do that much about it anyway?

Where Does The Buck Actually Stop?

In the 2019 edition of the Institute of Internal Auditors (IIA) SA’s Corporate Governance Index (CGI), we find some pretty damning statistics. Following a survey of over 2 000 employees in various sectors across South Africa, the report revealed that only 14% of government employees believed ethics were a reasonable part of their work culture. Even more alarming is that this figure drops to an incredible 0% among employees in metro municipalities.

But we surely can’t lay the blame for this lack of faith in the direction our general moral compass is pointed at the feet of the rank and file employees? The buck must stop further up the chain of command.

So who, ultimately, is responsible for this appalling state of affairs?

“Ethical behaviour and practices must be instilled at a leadership level,” says IIA SA’s acting Chief Executive Officer Charles Nel. “Leaders in organisations must reflect honesty, accountability, integrity, fair justice and good conduct, which is then in turn reflected throughout the organisation among key stakeholders including employees, customers and suppliers.”

And he’s not just talking about senior management. Inquiries instituted by President Cyril Ramaphosa continually highlight that senior executives and middle management are both complicit when it comes to flouting the guidelines for good governance and ethics.

The South African Business Ethics Survey (previously referenced) stresses that although the “tone at the top” is often seen as the main driver of ethical culture within a business, this can only take a company – particularly a large corporate – so far.

“Middle managers are the direct interface with employees, and are indispensable to the development and maintenance of an organisation's ethical culture,” it states.

Renate Scherrer, MD of JvR Consulting Psychologists, agrees: “Ethical behaviour in an organisation is impacted most by the behaviour and actions of employees’ direct manager,” she says. “His or her behaviour, and how much it embodies (or doesn’t) the ethics of the company, may authorise others to act in the same way.”

So, What Can We Do?

It’s true that the environment in South Africa at the moment means operating in an ethical manner is challenging to say the least. When you’re continually battered with reports of abuse of authority and power, it’s easy to see how an organisation’s ethical culture can degrade. 

Fighting this is not easy, but it’s imperative we try – and try hard. Every single employee must understand that ethics is not only a part of their corporate culture, but the driving force behind every action and decision. Ethical business practices are not simply a chapter in an operating manual left to gather dust on a boardroom shelf, or an item on the itinerary of an annual training programme. You can’t just plug into a bit of ethics culture occasionally – it has to be an integral part of the way in which all entities – private and public sector – conduct themselves.

And anyone found guilty of not playing ball cannot simply be reported and then left to carry on with impunity. They must be actively investigated, held accountable and punished.

JGL Forensic Services is a multidisciplinary team of experienced forensic accounting and investigation professionals. We strongly believe in the rule of law and the scientific method as it applies to forensic accounting and investigation. Talk to us in confidence, and let’s work together to prevent corporate corruption and fraud.