Auditors reveal slight improvement in corporate governance, ethics in SA
Despite concerns raised at a number of commissions of inquiry, the Institute of Internal Auditors South Africa (IIA SA) says there has been slight improvements in the way the public and private sectors conduct business.
The seventh edition of the IIA SA’s corporate governance index (CGI) 2019 report, which is scheduled to be publicly released on Thursday, reveals a 3.5% improvement in both corporate governance and ethics.
The report notes that some statistics still remain dire with just 14% of those canvassed revealing that ethics in national government are important.
The IIA SA compiles the report with the University of Pretoria and offers an overview of South African organisations’ governance ratings from the perspective of chief audit executives.
The report is intended for organisations in both the public and private sectors to continue having conversations on the measurement of governance and identify their strengths and weaknesses while filling organisational gaps.
According to the IIA SA’s acting chief executive officer Charles Nel, ethics enjoyed a rating of 3.4 (out of a maximum rating of four in the quantitative study) in 2013 and 2015, this dropped to 2.8 last year and improved slightly to 2.9 in 2019.
”It indicates that ethical behaviour and practices must be instilled at a leadership level. Leaders in organisations must reflect honesty, accountability, integrity, fair justice and good conduct which is then in turn reflected throughout the organisation among key stakeholders including employees, customers and suppliers,” Nel said.
The IIA SA’s CGI report measures key elements such as ethics, leadership, compliance, risk, performance and internal audit within organisations and is based on the King IV outcomes and principles of governance.
The King Code of good governance is a world recognised governance guide, a direct source of trust in society and instils an integrated thinking approach from the top down with leadership and oversight, according to the IIA SA.
President Cyril Ramaphosa has instituted several commissions of inquiry to investigate state capture, the SA Revenue Service, the fitness to hold office of top prosecutors and into the Public Investment Commission.
The inquiries have all heard evidence of how senior executives and managers in both the public and private sector flouted corporate governance and ethics.