Business should lead by trusting workers
Sometime last week Business for SA (B4SA) handed President Cyril Ramaphosa a draft of what will soon be released as its report into the current and future state of the economy, its answer to Ramaphosa’s call for a national effort to come up with a plan for “inclusive growth” in the wake of the Covid-19 catastrophe.
“Inclusive growth requires an acknowledgment of what contributes to continued and sustainable growth. We believe that business is a primary driver of economic activity,” Bloomberg quoted Martin Kingston, the local head of Rothschild and leader of B4SA, a conglomeration of business groups dealing with the Covid-19 crisis.
“We have to work in partnership with government, acknowledging that its role is to oversee the economy and regulate as well as creating the right policy environment and ensuring that all social partners act together to achieve our economic potential.
“It requires political courage and conviction. Business does need to go further, but can only do that if we have a thriving economy. If all we’re doing is redistributing a diminishing economic pie, that will get us nowhere. We now need to kick-start and sustain high levels of inclusive growth.”
In other words, after all the effort and the work on this sector and that, and the “inputs” and the Zoom meetings and the late night calls, is it really going to be the case that the best business in this country can come up with as advice to an admittedly lost government is that if it wants an inclusive economy it has to “grow” it first?
Kingston does concede that business needs “to demonstrate an inclusive approach” if it is to harness the capital it needs. But inclusion is either real or it isn’t. Only a part of the problem is the government doesn’t have the money or the skills to make the economy grow. The other part is that growth may actually depend on inclusion and not the other way around.
This is a low-trust economy. It looks like one and it behaves like one. Yes, the ANC has been absolutely appalling at policy and management, but for every business leader champing at the bit about the lack of political leadership from Ramaphosa you also have to ask why business is so supine so much of the time.
It is time to do what’s right. There’s a moment in this for business to take a lead and set a tone. It needs to publish, even in these dark and frightening times, a manifesto for growth inclusion, to recognise that while business is part of the solution it is also part of the problem.
The world has changed and it had before the virus. The way we South Africans create wealth is obsolete and cruel.
I spoke to a business group Zoom meeting the other day and while people were nice to me, a few took offence at my advocating for company law to be changed to encourage companies to invite their stakeholders, including labour, onto their boards.
I say encourage, but once you do that everything changes. Your board becomes instantly smarter and knows more about the greatest risk to the company (that would be the country).
Problems become shared and there are no secrets to exploit for political gain on the shop floor. The 2008 amendments to the Companies Act required the establishment of a social and ethics committee on every board. How many chairs know that?
Along with the audit committee, the social and ethics committee is the only other one written into law and yet few companies take it seriously and that’s crazy. Business and the working (and unemployed) poor are the two communities in our country that stand to benefit most from clean government and yet here were establishment figures after the Zoom meeting saying the German model was not the way to go.
I just know they are wrong, as German business was about the idea after World War 1. “Economic democracy will complete the downfall of Germanness,” warned Emil Kirdorf, a German industrialist much admired by Adolf Hitler, in 1929. Nowadays, labour is not only on the boards of every German company worth mentioning, it is consulted and part of the decision-making process right through to the shop floor. The German economy remains one of the world’s most productive because of it.
German unions strategise with their managements. The decision to stop making the BMW 3 Series in Pretoria and to replace it with the X3 would have had union backing on the supervisory board, the board of management and the works councils. German unions contribute to company strategy. The fact is, trust works, even if you have to work at it.
Here this simple solution to so many blockages in our economy is shunned by business and unions alike. The old boys don’t want chaps in overalls in the boardroom, and unions worry they would be overwhelmed (or “co-opted”). They’re both wrong.
This thing, this recovery, if at all, has to be done together. I despair at the thought of business dropping its big report on us all and then retreating to its offices to wait for the next Nedlac meeting or an invitation from the president. It should take the lead.
LABOUR IS CONSULTED AND IS PART OF THE DECISION-MAKING PROCESS RIGHT THROUGH TO THE SHOP FLOOR
GERMAN UNIONS CONTRIBUTE TO COMPANY STRATEGY. THE FACT IS, TRUST WORKS, EVEN IF YOU HAVE TO WORK AT IT