Temperance, according to the Oxford dictionary, means the practice of controlling your behaviour so that it is always reasonable or moderate.

On a weekend when commentators are analysing the fallout at KPMG SA over its failure to take appropriate measures in its dealings with non-listed Gupta entities, and in issuing the R23m report on the so-called “rogue unit” at SARS, the words “governance”, “ethics”, and “ethical leadership” have been bandied about – but not so much the concept of “temperance”.

KPMG SA exhibited a spectacular failure in governance.

Its own risk management and internal oversight was missing.

Its leaders exhibited a failure in ethics. Their actions do not show that they reasoned well about the good of selves and others.

From a fiscal and political perspective, their lack of governance and failure to lead ethically has had far-ranging impact – on the functioning of SARS in effective tax collection (and thus on our fiscus); and on this country’s democratic future (through their role in supporting State capture).

Back to temperance. It’s one of the six virtues of ethical leaders which transcend cultures, according to Rick Hackett and Gordon Wang, two academics in Canada who have published consistently on this topic.

Temperance is the power to control oneself in ways that lead to moral outcomes and beneficence to all

Is their definition published in Elkington (2017).

Temperance. Otherwise called self-restraint, self-control, self-discipline. The opposite of rash.

Beneficence. Doing good. Or resulting in good.

Let me show the link to KPMG SA, and make the connection to ethical culture within organisations.

Temperance as a characteristic may at first glance suggest slow, overly controlled, missing the opportunity, risk adverse, or even inflexible.

Modern business requires from leaders that they’re quick and responsive. But that’s exactly what gets people into trouble. They just don’t – or can’t – stop to think. There is very little space to withdraw, reflect and make considered decisions. Elkington calls this “undermining their capacity for ethical leadership”.

On Friday, I read the press release from KMPG SA in which new CEO Nhlamu Dlomu said that ethics and integrity were fundamental values of that organisation, and that changes in how the firm operates would seek to underpin these. She emphasized that the tone from the top of the organisation needed to change.

I would suggest that in any organisation, the commitment to “the necessary rigour” and governance that Nhlamu Dlomu speaks of, is reflected in the firm’s culture.

Nortz (2015) recommends that in organisations that habitually step over the line in the interest of getting jobs done, responsive actions that will change the culture of the organisation should be implemented.

[T]emperance comes into play frequently because, like the millions who exceed speed limits every day, there are many circumstances in which companies can violate laws for years with little risk of getting caught. [E]xamples include . . . choosing not to tell a buyer about a product defect, failing to perform all mandatory corporate sexual harassment training, failing to comply with all applicable workplace safety rules, failing to fully comply with all aspects of operating permits, improper disposal of hazardous materials, making late payments on amounts owed to suppliers, [and] failing to comply with all applicable data privacy laws.

Nortz proposes a culture where people “speak openly about the importance of self-restraint in running an ethical business”. He suggests that individuals evaluate their own habits, considering “the degree to which you may be failing to restrain yourself from ‘speeding’ at work”, and make adjustments.

A junior auditor at KPMG SA recorded that, in a Gupta-owned entity, expenses incurred outside its line of business should not be considered as such. That’s is an example of an auditor doing his or her job.

But his or her seniors ignored that input. Which to me suggests an environment where some colleagues had a habit of stepping over the line to get the job done (or earn the management fee).

Hackett says that while an ethical virtue like temperance is strengthened within the individual “through self-learning and repetitive practice”, over time the exhibition and recognition of such a behaviour can build a strong normative culture in an organisation.

And, he says, “virtuous leadership positively predicts the well-being of both leaders and their followers, and the performance and citizenship of (employees)”.

I think that’s a strong case for an organisational culture that includes self-control or temperance in individuals, and which then makes the compliance or corporate governance change, more meaningful and effective.

 

References

Elkington, R. 2017. Ethical Leadership at the Speed of VUCA: Visionary Leadership in a Turbulent World. Bingley, United Kingdom: Emerald Publishing Limited.

Hackett, R.D. and G. Wang.  2014.  Leadership Character and Virtues Ethics. A presentation at the Ron Joyce Centre on 25 April 2014. https://www.slideshare.net/degrootebiz/virtuous-leadership accessed 15 September 2017

Nortz, J. 2015. Temperance – The Cornerstone of An Ethical Corporate Culture.

http://www.corporatecomplianceinsights.com/temperance-cornerstone-ethical-corporate-culture/

accessed 15 September 2017