What to do if your business is caught in web of deceit
Not a week goes by without yet another skeleton tumbling out of the Gupta cupboard of horrors perpetrated on SA.
Company after company is implicated in variations of the same story — paying off the Guptas and their associates for lucrative government contracts, friendly legislation and other favours.
Why did so many institutions become entangled in this web of deceit? Why are so few taking a public stand against corruption? The answer is obvious. From a business perspective it is so much easier to pay a bribe or two than it is to live under the burden of adverse regulation. You want to stop legislation — pay a bribe. You want to externalise your money from SA — pay a bribe. You want to secure a R1bn contract from the government — pay a bribe. Enough said.
Once caught out, however, each company seems to follow the same rule book. It starts with deafening silence as it hopes the scandal will go away and the media lose interest.
This is followed by half-truth statements that deny any knowledge of the wrongdoing. If that does not fob off the media, the public and the Twitterati, the denials get more vehement. The problem with strong denials is that the media and the public smell blood. In the current political environment, with a nation as angry as ours is and with SA in a downward economic spiral, once blood is smelt, there is no stopping the feeding frenzy.
The door has been opened to an onslaught of negative press, loss of customers and reputational damage.
Interestingly, I have been contacted by many of the culprits to ask me what they should do to restore their reputations in the court of public opinion. My answer is always the same: stop hiding.
The first step is for the nonexecutive chairman, rather than management or executive directors, to set up an independent forensic commission of inquiry. This sends a strong message that the nonexecutive directors who have little financial “skin in the game”, are taking the issue seriously.
The second is to never deny — if you don’t know the truth, say so. Once you have offered to investigate, in whatever guise, do so as quickly as possible. These are not complex cases. The longer it takes, the longer the level of mistrust and reputational damage prevails. Keep the public informed through the process of progress made. Once the investigation has been completed, announce the full results.
The chances are that the legal risks you expose yourself to are already there. No amount of short-term nondisclosure is going to keep the FBI or the US department of justice at bay.
After the investigation is completed and, on assumption that the wrongdoing has been proven, apologise as sincerely as you possibly can. Punish the guilty within the organisation, not by paying them off, but by holding a disciplinary hearing. Then look at your options in terms of restitution. If there are large monetary amounts involved, apart from refunding any affected parties, you need to do something for SA.
It had better be a “big gesture” and not part of your standard corporate social responsibility programme. Some ideas include making large donations to organisations visibly fighting corruption in court, such as the Helen Suzman Foundation or Gerrie Nel’s private prosecutions unit. Yet another idea would be to set up a foundation to fund hospitals for the vulnerable, to prevent further travesties such as Life Esidimeni. McKinsey’s R1bn would make a good start.
However the money is spent, it has to be a big, bold move and free from government interference. Perhaps then, the South African public could start to forgive.