JOHANNESBURG – Ethics and ethical behaviour is not an integral part of South African organisational cultures.
And this has manifested itself in the recent spate of corporate and government scandals including, among others, the Steinhoff, VBS Bank, and state-owned entities related to state capture.
This is one of the key sentiments revealed in the 2018 Corporate Governance Index Report. The annual survey is in in its sixth instalment this year and casts an eye over the country’s attitudes towards good corporate governance.
It is undertaken by the Institute of Internal Auditors SA (IIA SA), which represents MORE THAN 8 000 members, and in partnership with the University of SA (Unisa).
The full report will be released on Thursday, 1 November 2018, during which Professor Mervyn King will also deliver a talk on “The State of Governance in SA”.
With more than 300 of the country’s chief audit executives (CAEs) participating, the latest report reveals that only 48 percent strongly agree that ethics is an integral part of the culture in their organisations. This represents a drop by 18 percent since the survey began. The survey also reveals a widening gap between the ethical tone at the top and the reality on the ground.
IIA SA chief executive Dr Claudelle von Eck admits that the audit profession has come under greater scrutiny as a result of recent controversies and laments the fact that the CGI shows that internal audit is often not equipped with enough resources.
She says: “It is my hope that the 2018 Index will serve as a wake-up call to leaders and will result in more introspection. It is clear from this Index that there is much work to be done in moving South African organisations to better governed organisations. The low percentage of CAEs (19%) who strongly agree that the output of their organisations in relation to their resources is alarming and points a finger at leadership across the board.”
The Index, which looks at 7 governance dimensions reveals a number of concerning areas which directly speaks to the competitiveness of the country.
Von Eck encouraged leaders serving on oversight bodies as well as in management to use the Index as a vital benchmarking tool
“South Africa’s overall score is the culmination of our collective efforts. I encourage all to resolve within themselves to not be the weak link in the collective and to ensure that they correct their mindset and behaviour in their own spaces of influence.”