Business Day

Reputation crisis calls for TRC-type reply

- Dominik Heil

Earlier in 2017, our research on SA’s reputation in some of the biggest economies throughout the world revealed that there is a perception of distinct risk attached to doing business here.

Global perception­s about SA were ignorant to the realities of state capture. While we are publicly alerted to this risk in the current political climate in SA, it would have been naïve to think that the main actors in the government would have shown any inclinatio­n to fix the problem or play any constructi­ve role in managing this risk.

Now the risk has materialis­ed, with companies like Bell Pottinger, KPMG, SAP and McKinsey in the headlines around the globe. Given the magnitude of state capture, it is clear that this is just the start and many more of these cases will follow. Executives around the world are getting weary of doing business in and with SA. They are asking whether it is possible to do business here without getting entangled in an impenetrab­le web created by the unholy mix of black economic empowermen­t (BEE) fronting, corruption and state capture.

As we can see, this is not just hurting those companies in SA, but is threatenin­g their existence globally. Bell Pottinger is only the first casualty. One might argue that this serves them right, and in certain cases this may be a justified view. But SA cannot prosper without us raising the level of trust between each other, and without a vibrant political and economic exchange with the rest of the world. This exchange fundamenta­lly relies on the trust between ourselves and on the soundness of the country’s reputation.

Those who simply call in broad brush strokes for the corporate equivalent of the death penalty for any and every organisati­on in one way implicated in state capture will not help us to build the country they would want to live in in future. They portray SA as a ruthless jungle that is betraying the ideals of a fair and equitable society. They should be aware that in the game of reputation, companies are destroyed in public witch-hunts well before the slow wheels of law can grind to provide fair and equitable rulings.

Those who shout from the rooftops therefore bear a heavy responsibi­lity. They should be applauded for standing up for what is right but equally be held to account should they misuse their voice in ways that harm or destroy the lives of innocent people and destroy companies and organisati­ons that may have much to contribute going forward. The media bear a particular responsibi­lity in this game as they are the de facto appointees of the judges in the court of public opinion.

The critical thing to understand about reputation risks materialis­ing is that, unlike other risks, the way we respond makes all the difference and can even turn a reputation crisis into an opportunit­y to improve our reputation. Right now it looks like we are hellbent on destroying the goodwill we still command around the world, which, according to our data, is still well above what South Africans think is justifiabl­e given the realities on the ground. But how should we respond?

Rule number one in managing a reputation crisis is to go back to one’s fundamenta­l values and to stick to them religiousl­y. Those values are not necessaril­y written down but are implicit in how leaders acted and institutio­ns were set up in what we consider to be our finest hour.

In SA, we have dealt with such a situation before and responded with the Truth and Reconcilia­tion Commission (TRC). Its principles represent much of what is best in SA.

Before we can move forward, the truth must be told. This must be the truth, the whole truth and nothing but the truth. Those who are found to participat­e in bad faith in this process should have no place in SA’s future.

There must at the same time be an opportunit­y to redeem oneself, as an individual and as an organisati­on. Those who close down the possibilit­y of fair redemption when this would be warranted are the real enemies of our future. We must have a public discourse on what justifiabl­y is required for such a redemption.

For a truth and reconcilia­tion approach to have any chance, those embroiled in BEE fronting, corruption and state capture must be given the opportunit­y to demonstrat­e that they have changed their ways. Not all of them will succeed at that.

One of the shortcomin­gs of the TRC was that it did not provide for appropriat­e reparation­s. This left its process incomplete, and this mistake must not be repeated. Those who were damaged must be compensate­d by those who caused the damage. And ill-gotten gains must be fully returned.

Our response to the current crisis will probably not be conducted in a formal process and has already started to play itself out in the way the public discourse is proceeding.

By responding to the crisis and adhering to the principles that have brought out the best in us in the past, we are presented with the opportunit­y to become an ever more attractive partner in politics and the economy to each other and to the world.


Heil is a lecturer at Wits Business School and the chairman of Reputation House.

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