It’s a wise leader who keeps his or her eyes on ‘doing business right’ as well as on all the other balls in the air.

The evidence of people who have lost ethical perspective is abundant.

I read this week (again) about Steinhoff directors’ failure to ask the right questions. And about what columnist Ann Crotty has called Christo Wiese’s ‘egregious self-dealing’ in accepting a prepaid €325m during late 2017 for Shoprite shares, weeks before Steinhoff collapsed. And in still another report, the failure of KPMG SA’s team working on the VBS Mutual Bank account to report unlawful acts.

I concluded that people in business make choices about what we choose to see, and choices to consider the impact of our business decisions on others as well as self.

Let me explain.

This is about corporate governance, and more.

Having ethics is to act for the good of self and others.

I think people can be so busy in the daily grind of the corporate world that they don’t lift their heads up enough to have ethical perspective.

Or, individuals do not apply their minds, ask the difficult questions, or differ from the mainstream opinion because organisational culture does not require them to, or requires them not to.

A busy executive may be asked to divide his attention between multiple demands on any one working day: Where will our next sales come from? Are we meeting our customers’ needs? What are we going to do about the profit which is too low for our shareholders? How should we adapt to the trading context?

It’s often not through intent that responsible persons don’t see the governance problem right in front of them. The cause may be busyness. An element of naivety or inexperience may also be involved.

In addition, I also think that in SA we sometimes put our heroes (local boytjie Wiese) or ‘authoritative parties’ (KPMG SA) on a pedestal. Why were more questions not asked about the structure of Wiese’s investment in Steinhoff, and corporate governance throughout that organisation, before December? Why was it okay for the KMPG manager overseeing the VBS audits to authorise audit reports on the bank without naming obvious irregularities?

Not one of these reasons given for lack of ethical perspective is excuse enough.

If you or I are the head (of a function, a business unit, a business, an NGO, a college, a global conglomerate), we must create time to think.

We must have clear head space to create ethical perspective. We must ask the right questions.

What are some of the right questions? My own list includes the 6 below. In italics, I explain why I ask them:

• What is the essence of your organisation? Are values clearly set out and adopted?
• Exactly why have you been successful in the past? How big a role has ethical behaviour, or lack thereof, played?
• How do you measure your success? Are you defined by profit, or sales growth, or is there a true commitment to corporate citizenship? How does this exhibit itself in your culture, strategy and plans? What’s the link between compliance management and ethical decision-making?
• Do your people think for themselves, or are they automatons? An organisation that allows persons to disagree or challenge may be mature enough to deal with the insights that their thinking raises. On the other hand, too much independence of thought may lead to ethical lapses.
• Does your organisational culture actively give room for critical thought, or shut it down? An organisation where input is quashed may lead to unchallenged unethical behaviours. I’ve seen an unconfirmed report in which Markus Jooste was referred to as “the Seagull’ because he s**t all over a dissenting colleague (I’m not sure about what) and then fired him.
• What is the recourse for people wanting to report wrongdoing, and are they really protected? See the alarming news reports of NGO director Nomawethu Kunene who revealed alleged corruption in Gauteng’s Department of Social Development and has been missing since 26 February.

There’s none so blind as those who will not see. We must create time to think, and time to see the ethical implications of how we choose to do business.

References

Crotty, A. (2018) ‘Shock and disbelief as Dutch base gets Christo Wiese off the hook’, Business Day, 12 April. https://www.businesslive.co.za/bd/companies/retail-and-consumer/2018-04-12-shock-and-disbelief-as-dutch-base-gets-christo-wiese-off-the-hook/

Ziady, H. (2018) ‘Regulator reveals KPMG waved no red flags over Guptas and VBS’, Business Day, 13 April. https://www.businesslive.co.za/bd/companies/2018-04-13-regulator-reveals-kpmg-waved-no-red-flags-over-guptas-and-vbs/