First order of business is clarity of thought that compels right action

Decision makers are responsible for the wellbeing of all and must demonstrate an intolerance of misbehaviour

The past six weeks have seen a significant shift in our political history which, in the fullness of time, may appear to be just a short blur of events. We have to properly record these events because future generations will look to us as the custodians of the memory of change. I start counting with the ANC national executive committee meeting in February, which culminated in a delegation dispatched to meet with then president Jacob Zuma to request his resignation. He told them he had done nothing wrong and saw no reason to resign. The pressure intensified and eventually the country received a Valentine’s Day gift, though not an act of love, when Zuma announced he was resigning.

Then, in a whirlwind, Cyril Ramaphosa was elected president and inaugurated. His first state of the nation address on February 19 lifted the spirits of the nation. Just two months earlier, he had been elected president of the ANC by a mere 179 votes.

While I know the ANC national executive committee and its top six have many compromised members, I am convinced Ramaphosa will introduce fundamental changes to our body politic. Since his address we have already seen changes – a major cabinet reshuffle on February 26 and, more recently, the suspension of Tom Moyane as South African Revenue Service (SARS) commissioner.

I have no doubt that, in spite of the constraints of holding an awkward alliance of factions together, we are likely to witness more changes over the next few months.

The signal SA has sent to the world is that of good governance premised upon collective responsibility and accountability. This bodes well for ethical and moral leadership, because as the bar is raised in the public sector so the private sector will have to respond. Already we have seen an enlivened Parliament, where even those who are deemed to have done wrong in the private sector are invited to appear before committees.

So what do we need right now in the midst of all this change? Simply put, we need to demonstrate a clarity of thought that compels action. Suddenly, the old binary of public versus private sector as a proxy for good versus bad no longer seems to apply.

The message is that all decision-makers are collectively responsible for the wellbeing of all South Africans, and to this end we should demonstrate an intolerance for misbehaviour.

The changes we see are big and bold. Yet, we must understand and articulate a shared belief that what we are seeing is only the beginning of the reversal. The completion of this process is one that requires vigilance and strong, continuing directed action. What corporate SA needs is a huge cultural shift, and discussions such as these at the Unisa Graduate School of Business Leadership are vital to raise the participation criteria for the change we desire.

Part of our vigilance must include an understanding of how the country descended into such an awful, dark place so we can act together to prevent this in future. Much of what we know emanates from Thuli Madonsela’s State of Capture report and the leaked Gupta e-mails. Together they speak of a situation out of control, where state power shifted from elected representatives to the Gupta brothers and their lackeys, who were ministers, senior public servants and the heads of state-owned enterprises (SOEs).

It is in this regard that the names of some transnational companies tripped off our tongues – Bell Pottinger, KPMG, McKinsey, SAP and South China Rail. Then, their South African acolytes, including MultiChoice, Trillian and Regiments all appear complicit and, of course, SOEs such as Eskom, Transnet, South African Airways, Denel, the South African National Roads Agency, the SABC and even SARS, appear on this disreputable list of entities.

To understand the loopholes in the system and the scale of the problem, our vigilance over the next period must invite more whistle blowing, more exposures, more investigations and charges, and many convictions and sentences. We need to ensure we can lead the healing process, so not even traffic officers will feel they are entitled to “cooldrink money”.

The charges the National Prosecuting Authority (NPA) is preferring against Zuma go back to the strategic arms acquisition programme. Perhaps decisions back then marked a turning point. It appeared the cause of the conflict was then president Thabo Mbeki, his cabinet and the Scorpions, and that everything possible had to be done to change the order of things.

In 2005, I was almost lynched at an ANC national executive committee meeting because the National Treasury had produced regulations under the Municipal Finance Management Act for supply chain management, the rigid implementation of which would have seen a sharper focus on the quality of services rendered to citizens by municipalities. I have no doubt the intentions of those who sought regime change were absolutely venal. The driving force was the removal of rules for corrupt ends.

SOEs are deemed to have higher levels of accountability than private sector companies. Most are governed by their own legislation as well as the Companies Act, and have a cabinet minister to provide oversight and be the representative of shareholders’ interests. Most have boards that are either directly appointed or agreed to by the Cabinet. In addition, they have oversight by parliamentary committees for direct accountability, as well as to the standing committee on public accounts.

I do not believe the processes can be any tighter, so my sense is that matters went awry for a few other discernable reasons. It appears that ministers were appointed to deliver outcomes that were against the letter and spirit of the Constitution and must have appeared pliable to those who wanted them appointed. These ministers appointed boards of poorly skilled individuals who, again, had to deliver particular outcomes. The ministers presented incorrect candidates as CEOs and chief financial officers of these large companies to create a web of complicit individuals. The boards, frequently on behalf of other agencies, saw to the establishment of strange practices and committees, such as the board committee for acquisitions and disposals, which is a fancy term for a sub group of the board that decides on tenders and violates every norm of corporate governance by its very existence. Regrettably, despite the fact there may have been hundreds of people involved, none among them ever called them out.

There have been a number of further steps in the agenda to completely hollow out the capacity of the state to deter misconduct, including its ability to prosecute affected parties. The organs of state in the criminal justice cluster were consciously weakened and repurposed. Parliament was anaesthetised and slept through most of the wrongdoing, in spite of detailed reports from the former public protector and annual reports from government departments that showed advanced stages of decay.

Government supply chain management systems were destroyed by the employment of incompetent individuals who frequently saw their responsibility as serving the interests of favoured bidders. Finally, black economic empowerment was opportunistically abused, pretending that no rules existed, so the parties officials were instructed to favour were allowed to run rampant.

These matters relate only to the public sector and SA has yet to fully engage with the extent of malfeasance in the private sector. At the front of that queue is Steinhoff, where the scale of wrongdoing may prove to dwarf whatever has gone before. While much attention has been paid to KPMG in the context of the Guptas and SARS, it is important to note that the auditors of Steinhoff are Deloitte, which is yet to explain its oversight of African Bank, a company that collapsed more than six years ago. The Independent Regulatory Board for Auditors charged two Deloitte partners with misconduct on Friday.

An inescapable conclusion is that for every horror story in the public sector there is an even more alarming story from the private sector. The same opportunistic trends were used by larger firms that recognised there were few consequences because the state was disinclined to act against its own. For the state, the consequences of wrongdoing are observed in poor service delivery. For the private sector, they are evidenced by large volumes of savings destroyed, leaving pensioners out of pocket.

After a protracted period of corruption it is necessary to arrest the processes of malfeasance and embark on a period of healing. I am convinced the remedies are not going to suddenly emerge from a raft of new legislation and regulation, but rather from the proper application of those that exist.

For starters, nonexecutive directors need to be trained and retrained. The quality of chief financial officers must be regularly assessed and weaknesses addressed or replacements insisted upon. We should encourage detailed inquiry and reward the curiosity of members of audit committees. The internal audit function must be empowered and their outputs taken seriously everywhere. The norms of corporate governance should be insisted upon and a “no-person’s land” created between nonexecutive and executive members. Annual reports ought to report on more substance and less gloss. In addition, we should insist on higher standards from the professional and industry bodies.

The NPA has announced that it will prosecute Zuma. Regrettably, it is 12 years ex post facto. It also appears that nobody has called out the fact that the accused is given home ground advantage in KwaZulu-Natal, as this encourages mobilisation on the streets in support of him.

Still, the more wrongdoers find there is no place to hide, the better society becomes for those who want to do good. This is a moment for new beginnings, and we should all together claim this moment. Let us, together, be heard. Let us do what society demands of us and live up to the promise of a new beginning.

Manuel is chairman of Old Mutual Group Holdings and a past recipient of the annual Unisa Graduate Leadership in Practice Award, an honour shared with Cyril Ramaphosa (2008), Thuli Madonsela (2015) and Pravin Gordhan (2016). This is an edited extract of Manuel’s keynote address at the School of Business Leadership’s annual Research and Innovation Day.

AN INESCAPABLE CONCLUSION IS THAT FOR EVERY HORROR STORY IN THE PUBLIC SECTOR THERE IS AN EVEN MORE ALARMING STORY FROM THE PRIVATE SECTOR