<p>Johannesburg, 19 November 2018 &#8211; Ethics is not prioritised enough in corporate South Africa. And, according to a wide-ranging survey conducted in both the private and public sectors, the country’s leaders are failing us.</p>
<p>These are just some of the findings of the 2018 AEPF Ethical Practices Survey. The annual survey &#8211; the first was conducted last year &#8211; serves as a barometer and quantitative tool to capture “the perceptions of professionals regarding ethical practices in society, organisations and professional institutions”.</p>
<p>An initiative of the Anti-Intimidation and Ethical Practices Forum (AEPF), the 30-page report reveals how unethical behaviour is perceived by professionals in the governance, auditing, risk management, fraud management and ethical practices domain in South Africa.</p>
<p>The AEPF is a forum of professional bodies and other like-minded organisations formed two years ago following the rising levels of corruption, fraud, ethics failures and lack of corporate governance in the country.</p>
<p>It was established to assist professionals who experience intimidation and whistleblowers keen to expose unethical behaviour in the workplace.</p>
<p>It’s founding members include the Institute of Internal Auditors SA (IIA SA), Corruption Watch, the South African Institute of Chartered Accountants (SAICA), the Institute of Directors Southern Africa, the Ethics Institute, the SA Institute of Professional Accountants (SAIPA), the Association of Certified Fraud Examiners (ACFE) and the Institute of Risk Management SA (IRMSA).</p>
<p>The results of the ethics survey, meanwhile, show a sharp decline in perceptions as compared to the inaugural study. This year 1900 professionals from across corporate South Africa participated with the largest group working at an executive level (28% compared to 10% in 2017) with the second largest coming from middle management level (21% compared to 19% in 2017).</p>
<p>The majority of the responses were from the private sector while at least 32% who participated work in the banking and financial services sector.</p>
<p>Key findings, meanwhile, include:<br />
* 36% agree that doing the right thing is more important than financial success while 25% disagree. In the public sector 23% of the respondents agree compared to 42% in the private sector;<br />
* Leaders in the public sector are perceived as a lot less ethical than those in the private sector. Only 10% of respondents in both the public and private sectors agreed that leaders in the public sector are ethical;<br />
* 17% of respondents in the public sector agree that leaders in the private sector are ethical &#8211; a significant decline from the 60% in 2017;<br />
* Only 32% of respondents in the private sector agree that leaders in their sector are ethical, representing another sharp decline from 70% the previous year:<br />
* 32% of those in the public sector agree that ethics is a priority in their organisations compared to 43% previously;<br />
* Just 39% agree that their organisations encouraged employees to do the right thing compared to 63% in 2017;<br />
* 44% agree that their organisations encourage them to report unethical behavior compared to 59% previously;<br />
* This could be why there is also a decline in the percentage of respondents in both sectors who believe it is their personal duty to report unethical behaviour (84% in the public sector compared to 91% and 89% in the private sector compared to 92% in 2017);<br />
* Professionals in both sectors say they have been intimidated for doing the right thing (26% in the public sector and 17% in the private sector) and that they feared losing their job for doing the right thing (26% in the public sector and 20% in the private sector); and,<br />
* 24% in the public sector and 15% in the private sector say they were threatened for speaking out about unethical behaviour and that they feared for their lives for reporting unethical behaviour (25% in the public sector and 20% in the private sector).</p>
<p>Chairperson of the AEPF and IIA SA CEO, Dr. Claudelle von Eck, admitted that leaders in both the public and private sectors “have taken a substantial fall from grace” in the past year which explains why the respondents “significantly downgraded their perceptions in the ethical nature of their leaders”.</p>
<p>She said, however, that there were some “heartening” data to emanate from the survey.<br />
“Despite the negative sentiment around leaders in the private sector, the perception of ethics remains relatively high, with no significant shifts. Of the respondents in the private sector 78% agree that ethics is a priority in their organisation, 80% agree that talking about ethics is encouraged, 80% agree that people are encouraged to do the right thing and 80% agree that people are encouraged to report unethical behaviour.”</p>
<p>Deputy chair of the AEPF and CEO of the ACFE SA, Jaco De Jager, said the results also revealed that the perception of ethics in professional institutions “remain very high”.<br />
“For example, 83% in the public sector and 87% in the private sector agree that these bodies have ethical leadership &#8211; and 86% in the public sector and 88% in the private sector agree that these bodies are ethical. This is the only dimension where both sectors seem to be in agreement in their positive sentiment.”</p>
<p>De Jager adds that in both sectors there seems to be an increase in trust in professional institutions.</p>
<p>“In the public sector 47% agree that they preferred to report unethical behaviour to their professional body and not to their organisation, as compared to 38% in 2017. In the private sector the percentage that agree is 31% compared to 24% in 2017. It must be noted, however, that while this increase in trust in professional bodies is good for their reputation, it does not signal comfort in the leadership in the respondents organisations.”</p>


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<p>What is the role of the private sector in driving global healthcare in Africa? CNBC Africa&#8217;s Wole Famurewa discussed this with William Roedy, Board member of GBC and former CEO MTV Networks International, on the side-lines of UN General Assembly where a high-level session focused on pathways to improving Africa&#8217;s health and prosperity.</p>


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Lagos’ Ambode explains role private sector can play in Nigeria’s education

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<p>According to a recent report by the National Bureau of Statistics, bank lending to the private sector in Nigeria fell from 15.8 trillion naira in the third quarter of 2017 to 15.74 trillion naira in the fourth quarter of 2017.</p>


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<p>Rwanda recognised the top 10 businesses that had enormous contribution to the country&#8217;s economy in 2017 at the Business Excellence Awards.</p>


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<p>A new report from Stanbic IBTC shows that November&#8217;s headline PMI eased to 55.2 from 55.8 in October. However, the index remained well above the long-run average and showed further strong improvements in Nigeria&#8217;s private sector business conditions.</p>


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<p>Olusola Olubi, Head of Specialised Markets and Capital Market Origination joins CNBC Africa to discuss ways to access long term capital for infrastructure projects.</p>


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<p>The city of eThekwini has partnered up with the National Treasury and the World Bank in a bid to be more competitive and attractive to investors. CNBC Africa spoke to George Bennet, World Bank Group Consultant for more on the progress.</p>


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<p>eThekwini Municipality has partnered up with National Treasury and the World Bank to find ways of attracting investors to the city of Durban.</p>


eThekwini Municipality, World Bank partner to bring investment to Durban

<p><em>Tahiru Azaaviele Liedong, University of Bath</em></p>
<p>In 2002, the African Union reported that Africa lost about USD$148 billion through corruption every year. This represented 25% of the continent’s combined GDP at the time. Nothing much has changed.</p>
<p><img loading="lazy" decoding="async" class="aligncenter wp-image-42882 size-full" src="http://cnbc.africa/wp-content/uploads/2017/02/bribery.jpg" alt="" width="600" height="350" /></p>
<p>&nbsp;</p>
<p>Last year, the global business advisory firm KPMG estimated that if South Africa reduced its corruption by one point, as measured by Transparency International’s corruption perception index, it could add R23 billion to its GDP.</p>
<p>The thrust of these facts is that the lost monies could have been used to finance institutional development and reduce the constraints to doing business in Africa.</p>
<p>In spite of the effects of corruption on the private sector, businesses in Africa are relatively silent about the menace. Efforts to combat corruption are largely championed by civil service, non-governmental organisations and international development agencies.</p>
<p>A new study has linked the private sector’s silence to the inadequacy of business education in the region. It notes that business schools can play a vital role in the fight against corruption. They can do this by nurturing business students to become institutional entrepreneurs – people who will bring about institutional change – not only in Africa’s economic domain, but also in the political arena.</p>
<p>Schools can equip students and managers with knowledge and expertise to advocate for public accountability and good governance, as advocated by the World Economic Forum.</p>
<h2>Why the private sector is silent</h2>
<p>There are several reasons why private companies often remain silent about corruption. One is that some of them indulge in and benefit from corruption.</p>
<p>In Ghana, for example, a “create-loot-share” model of corruption persists. Politicians, public officers and businesses collude to create and profit from fraudulent acts, including inflated contracts. This is also common in Nigeria, where between 2009 and 2014, about USD$2 billion was salvaged from inflated contracts by the government agency set up to vet procurement.</p>
<p>Even multinational companies from the least corrupt countries gain from Africa’s corrupt political elite. For example, in 2011, UK’s Shell and Italy’s ENI paid USD$1.1 billion to Nigerian officials for access to an oilfield currently worth USD$500 billion. US tyre firm Goodyear paid more than USD$3.2 million in bribes to Angolan and Kenyan government officials in order to win supply contracts.</p>
<p>The pressure on companies to indulge in corruption is considerable in Africa. According to data from the World Bank, 71% of enterprises in Sierra Leone, 66.2% in Tanzania, 64% in Angola, 75.2% in Congo and 63% in Mali expect to give “gifts” to secure government contracts.</p>
<p>The ethical dilemma for business managers is that refusing to pay bribes can cost their companies contracts, licences and revenues. Essentially, good companies which do not yield to extortion may lose out to bad competitors who do. Consequently, most companies yield to corruption or stay silent. Speaking up can make them targets for political witch hunts and discrimination.</p>
<p>A much deeper reason for the private sector’s inactivity is that managers simply lack the political skills required to shape their business environments. This deficiency arises because the link between political institutions and economic markets has not received adequate attention in business schools. So the schools are turning out managers with good knowledge of business but inadequate understanding of public governance and inability to influence public institutions.</p>
<p>Most people, including business managers, feel powerless when dealing with corrupt government officials. They regard official institutions as too powerful to take on and see corrupt practices, such as bribery, as unchangeable. But with good education and training, this can change.</p>
<h2>African business schools can help</h2>
<p>Corruption is multi-faceted. So there is no simple solution for it. It must be battled on all fronts. Business schools can do their part by developing competence to confront corruption.</p>
<p>Some in Africa have already done so: three business schools introduced an anti-corruption programme sanctioned by the United Nations into their classrooms.</p>
<p>But much more can be done. Business schools should teach business-government relations, or corporate political activity. This is crucial because many business managers don’t know how to influence their political environments even though they are affected by government policies. Students and managers may be taught ethics in schools, but ethical values are difficult to uphold in contexts where corruption is highly endemic, such as Africa.</p>
<p>If the fight against corruption in Africa is to succeed, business managers must learn to engage public officers differently. The ability to do this can be developed in business schools.</p>
<p>Students and managers need to learn about political strategies that can change the way institutions work. Techniques for ad hoc management of bribery are no longer enough. Companies can, for example, present a united front against corruption so that none can be singled out for “punishment”.</p>
<p>The business community could also learn to self regulate by refusing to deal with corrupt companies, as was recently reported in South Africa. Collective campaigns for public procurement transparency can also prevent politicians from using the private sector to plunder State funds. Inaction breeds corruption, as seen in Kenya’s USD$1 billion Anglo Leasing scandal.<img loading="lazy" decoding="async" src="https://counter.theconversation.com/content/87405/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" />African business schools are valuable in the fight against corruption. They can take bold steps to review their curricula and promote active corporate citizenship. When they see what a difference they can make, the continent may begin to shake off a major hindrance to its development.</p>
<p>This article was originally published on The Conversation.</p>


Business schools have a role to play in fighting corruption in Africa

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<p>CNBC Africa attended the Invest Durban Launch and spoke to Moses Tembe, Co-chair of the KZN Growth Coalition about the City of Durban&#8217;s competitiveness when compared to its global counterparts.</p>


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<p>&nbsp;</p>
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Ajiv Maharaj on what makes Durban attractive to investors

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<p>CNBC Africa spoke to the Honorary Consulate of Finland, Jouni Dahllund at the launch of the Invest Durban initiative about the need to attract foreign direct investments to South Africa.</p>


Private Sector

Ethical sentiment among professional South Africans drop sharply following bruising year of corporate scandals

The role of private sector in improving Africa’s healthcare

Private sector led economy: Is it a myth or fact?

Concerns raised over implementation of continental free trade deal

VW’s Thomas Schaefer speaks about ‘Moving Rwanda’ digital mobility concept

Lagos’ Ambode explains role private sector can play in Nigeria’s education

Bank lending to Nigeria’s private sector falls

Beaufort Properties’ Ernest Hanson sees opportunities in Ghana’s property market

Rwanda’s top businesses recognized at awards ceremony

Nigeria’s Stanbic PMI eases to 55.2 in October

How to access long-term capital for infrastructure projects

SME, investor partnerships key to growth of Durban- World Bank

eThekwini Municipality, World Bank partner to bring investment to Durban

Business schools have a role to play in fighting corruption in Africa

Durban seeks to remain a competitive investment destination

Ajiv Maharaj on what makes Durban attractive to investors

Why Finland is keen on investing in SA

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Private Sector

Ethical sentiment among professional South Africans drop sharply following bruising year of corporate scandals

The role of private sector in improving Africa’s healthcare

Private sector led economy: Is it a myth or fact?

Concerns raised over implementation of continental free trade deal

VW’s Thomas Schaefer speaks about ‘Moving Rwanda’ digital mobility concept

Lagos’ Ambode explains role private sector can play in Nigeria’s education

Bank lending to Nigeria’s private sector falls

Beaufort Properties’ Ernest Hanson sees opportunities in Ghana’s property market

Rwanda’s top businesses recognized at awards ceremony

Nigeria’s Stanbic PMI eases to 55.2 in October

How to access long-term capital for infrastructure projects

SME, investor partnerships key to growth of Durban- World Bank

eThekwini Municipality, World Bank partner to bring investment to Durban

Business schools have a role to play in fighting corruption in Africa

Durban seeks to remain a competitive investment destination

Ajiv Maharaj on what makes Durban attractive to investors

Why Finland is keen on investing in SA

News Tips

Advertise With Us

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