Business Leadership South Africa, the country's largest business lobby, has become increasingly vocal about rising levels of corruption and mismanagement of public assets. Concerns are growing in the country that corruption, particularly the looting of state assets, is embedded in the way business is done. Stephen Freedman has questioned CEO Bonang Mohale as the body representing South Africa's largest and multinational corporations takes a new political stance.
To what extent does Business Leadership South Africa represent the country's private sector?
The organization represents approximately 75% of South Africa's largest companies. Obviously, their interests are not the same as those of small businesses. For example, large companies can adapt much more easily to onerous government mandates that drive up the cost of doing business.
But what we have in common is far greater than what separates us. It is the desire to implement pro-growth economic policies under the rule of law. Business confidence in South Africa is currently at its lowest level in 30 years. This is not only due to factors beyond our control, but also because of actions we can control, such as governments increasing policy certainty in areas such as mining. This is disastrous for large companies. The same goes for small and medium-sized enterprises.
BLSA commits its members to changing practices that can hinder economic growth and inclusion.
Are your members on board with the change agenda? How are you going to ensure they support it?
Yes, it is. Business Leadership South Africa has taken a much more active role over the past year in better listening to business, shaping government policy and speaking out against corruption. We are demanding significant resources to achieve this, and our members support us.
They understand that it is critical to achieve the policy context that enables the issues we are addressing: economic growth, job creation, and transformation.
In terms of recognition, we set out our vision in our contract with South Africa and a pledge of integrity that establishes our business values. We expect our members to respect these. If you violate this, you will not be able to become a member. We demonstrated our commitment to contracts and commitments by suspending the operations of three major companies: KPMG, Eskom and Transnet.
You suspended Eskom and Transnet, claiming it was contrary to the organization's values. What does this mean?
The Integrity Pledge makes clear that we have a zero-tolerance policy against corruption. There is ample prima facie evidence that both of these organizations are involved in corrupt practices. They were unable to satisfy us that they recognized the seriousness of the accusations and were determined to deal with them. Therefore, the suspension of their membership was appropriate.
Business Leadership There is a perception that South Africa is tougher on corruption in the public sector and more tolerant when it comes to the private sector. what is your view?
It's not true. If there is wrongdoing in the private sector, there will be accountability. For example, construction industry executives involved in bid rigging around the World Cup are now out of work. Recently, there was also the KPMG incident. The executive responsible for decisions that landed the company in trouble has left. and was suspended from the BLSA.
In contrast, governments and state-owned enterprises lack accountability. Executives act with impunity. And while corruption is wrong wherever it occurs, the false symmetry of discussing it as if South Africa faces the same critical problems in both public and private sector corruption We must resist. Unfortunately, the current government is corrupt from top to bottom. By contrast, our private sector is overwhelmingly law-abiding. That's a huge difference.
How far are you prepared to go in your anti-corruption mission? Some of your members have been convicted of abusing vulnerable consumers. Will you act against them?
Business Leadership South Africa takes action against members who behave in a way that is contrary to our values and which harms the reputation of the business. These values are encapsulated in the organization's Integrity Pledge and South African Contract. Taken together, they outline a zero-tolerance attitude towards corruption, a belief that businesses should act with courage, integrity and consistency, and a strong belief that business can be a force for good. Masu.
Sometimes companies make mistakes, but as long as the organization takes appropriate steps to address the problem, it's acceptable.
Do you accept that companies themselves need to change the way they do business in order to win public trust in their mission to fight corruption?
Yes, it is. There is clearly a large “trust gap” between the general public and businesses. Part of it is due to ignorance. Some of that can be explained by deliberate misinformation, such as that seen in the harmful White Monopoly Capital campaign. As we now know, this was a deeply racist narrative that sought to blame everything that went wrong in South Africa on a fictional lily-like private sector. We believe this particular attack technique is being used to distract from the real issue of increasing corruption.
And some of that mistrust is rooted in history, with companies still seen by many as collaborating with and furthering the apartheid system's legacy.
However, some of this is due to the actions of companies themselves, such as collusive behavior in certain industries and soaring executive compensation.
However, business is a national asset and is not a problem. It is therefore in everyone's interest for South Africans to improve their understanding of business and its overall reputation.
Businesses need to explain and demonstrate that they are part of society and not independent. It is that we share the same vision and goals, especially to fight the scourges of unemployment, inequality and poverty.
Businesses also need to help society understand that the big problems facing this country are not at hand. Yes, there are things that companies can improve on, but the far bigger problem is the havoc caused by state capture and poorly designed and implemented policies.
This is part of a series run by The Conversation Africa called Face-to-face, where leading academics interview prominent figures from the public, private and non-profit sectors.