Q&A: Business Ethics Network of Africa

Liezl Groenewald, president of the Business Ethics Network of Africa and senior manager of organisational ethics at the Ethics Institute, on instilling moral resilience by incorporating it in basic and higher education

Q&A: Business Ethics Network of Africa

Q: What role do business schools play in improving ethics within SA business?
A: Business schools are training future C-suite executives and managers who will be responsible for making decisions that demonstrate their organisations’ moral conscience (or not). Traditionally, business schools focused on the achievement of the bottom line, but – in light of corporate scandals – they have realised that incorporating ethics as a stand-alone module or as part of other modules is imperative to create ethics awareness among students, specifically as it relates to ethical decision-making. Our future leaders need to understand the impact of ethical business conduct – which can be negative on the bottom line in the short term but beneficial for the sustainability of a business in the long term.

Q: How does the Business Ethics Network of Africa (BEN-Africa) support business schools in their leadership education?
A: BEN-Africa, as a network organisation, provides a platform through our network, especially at our annual conferences where academics from business schools and business-ethics practitioners across the continent discuss business ethics and its role in leadership education. We provide opportunities for sharing ideas and research. And through our academic journal, the African Journal of Business Ethics, we publish academic research in the field of business ethics and related subjects, such as leadership education.

Q: What is ‘moral resilience’, and who needs it most in SA?
A: Moral resilience, which is the theme of the Ethics Institute’s (TEI) 10th annual conference in 2021, refers to an individual’s capacity to restore their integrity in response to moral confusion, distress or setbacks. It entails a resilience not to be knocked down, but to bounce back and build the ethically responsible society envisaged in the time of Madiba. Developing such resilience will take the willingness and earnest desire of our leaders in government and corporates, and every South African, to walk a path of honesty and integrity, with an unwavering moral compass.

Much of the fraud and corruption so prevalent in SA today is the result of a breakdown of ethics and values. We need to create a ‘moral revolution’ by getting our ethics right – in society, government, business and schools. The focus should not only be on punishment for wrongdoing (extrinsic motivations such as fear and punishment do not create ethical cultures); we need intrinsic motivation to do the right thing even when no one is watching. Society must celebrate its ethical heroes as evidenced by campaigns such as Lead SA and #ImStaying.

Q: How and when should young South Africans be introduced to business ethics?
A: In my opinion the core concepts of conducting business ethically should already be introduced at high-school level; not only as part of economic-management subjects but also in other subjects, such as design and technology, art and drama. The reason for this is that many learners will have businesses across a wide range of industries, be it in mining, oil and gas, the performing arts, journalism, retail and so on. The basics of business ethics are dominant in interactions between a business of whatever nature and its stakeholders.

Understanding why ethical values and principles should permeate all business decisions and actions, and how these principles and values should be entrenched in organisational cultures, will give businesses a competitive edge. Employees will be satisfied, profit will be generated, trust will be created in the business and, ultimately, the business will be sustainable. Learners need to understand these concepts from an early age to be equipped to deal with ethical dilemmas that are so pertinent in business.

Q: Why is unethical business behaviour so harmful to SA’s economy and society?
A: Although it sometimes seems without obvious victims, unethical business behaviour bears with it high costs – to the state, economy and citizens. It affects all of us, because it threatens sustainable economic development, ethical values and justice. It destabilises society and endangers the rule of law. Corruption and international perceptions thereof are damaging SA’s reputation, creating obstacles to local and foreign direct investment, flows to the stock market, global competitiveness, international trade and economic growth. Ultimately it distorts the development and upliftment of citizens, and increases levels of poverty and income inequality.

Corruption and bad management practices eat into the nation’s wealth by channelling money away from education, health, energy and water supply, infrastructure and social grants. Corruption increases the costs of doing business and stunts the innovation and competitiveness that are needed, and it has a negative impact on growth and jobs. Basically it deprives citizens of their constitutional and human rights.

Q: How do SA’s corporate governance frameworks act as examples for other African nations?
A: The King IV Report on Corporate Governance leads by example, not just in Africa but also internationally, because it takes new developments in corporate governance into account. These are matters such as directors’ pay, integrated reporting, responsible investing, mandated audit rotation and tendering, information security and protection, and board diversity. The significance of their inclusion lies in the fact that all these matters are underpinned by ethics. In other words, something such as mandated audit rotation rests on the fact that a long-term client-auditor relationship can result in an unhealthy familiarity between the organisation and an audit firm, which in turn can cause ethical dilemmas relating to whose interests should be served on the side of the audit partner. Examples abound. Reflecting on King I, one notices that ethics is mentioned towards the last chapter; in King II it is mentioned in the middle chapter. But in King III and IV, ethics has been elevated to the first chapter and the first three principles, giving credence to ethics being the foundation of good corporate governance.

Q: How do you rate the ethical culture in SA’s large companies?
A: TEI conducted the 2019 South African Business Ethics Survey among 2 253 employees of 19 large and listed private companies across various industries in SA. We found that, on average, these companies fall within a moderate ethical-culture risk category, with some aspects of an ethical culture present and others underdeveloped. Additionally, these findings indicate an overall ‘developing’ – but not ‘mature’ – ethical culture. This is encouraging, insofar as it indicates that companies are prioritising the building of an ethical culture to some extent, but it also demonstrates that more can be done to improve the ethical culture of large and listed companies in SA.

Q: What is a code of ethics, and who needs it?
A: The most fundamental reason for having a code of ethics is to provide clarity to stakeholders on the ethical standards that should prevail in the relationships and interactions between an organisation and its stakeholders. Employees have their own pre-existing ethical values and standards when they are employed in an organisation. Because it cannot be assumed that these are aligned with the values and standards of the organisation, all organisations have a responsibility to provide guidance and clarity on the required ethical standards.

Codes of ethics are furthermore an imperative decision-making tool for employees and other stakeholders when faced with inevitable ethical challenges – often described as ‘grey areas’. As a code of ethics provides clarity about acceptable and unacceptable behaviours in and for an organisation, it assists with ethical decision-making. Each organisation needs its own set of ethical standards, with guiding conduct provisions specific to the organisation and industry. Mining companies, for example, often have ‘safety first’ as their primary value, followed by acceptable and unacceptable behaviours relating to safety at work. But safety first would not necessarily be a value for a clothing retailer, which would probably put more emphasis on customer service as a value, followed by conduct provisions demonstrating customer service.

Q: What type of career opportunities do you see arising in SA business ethics?
A: Over the past few years we have seen an increased demand for TEI’s Ethics Officer Certification programme (EOCP) to address the growing acceptance in organisations that ethics cannot manage itself. The programme, which is accredited by the University of Stellenbosch Business School (executive development), is aimed at providing individuals responsible for ethics management in their organisations with not only the theory of ethics management but also practical tools on how to develop and implement an ethics-management programme. We’ve been presenting the EOCP since 2004 in SA as well as in Mauritius, Malawi, Nigeria and Kenya. There are currently 1 038 certified ethics officers.

We have also noted an increase in the inclusion of business-ethics modules in the academic courses for professionals. Career opportunities are thus developing in the academic-lecturing space. TEI’s CEO, Deon Rossouw, for example, lectures in business ethics at the University of Stellenbosch in the philosophy department, while I lecture in the IT management department of the University of Applied Sciences in Innsbruck, Austria. Other career opportunities in business ethics in which I see huge prospects are in consulting, the development of online business-ethics courses, virtual ethics officers, development of ethics-management tools and ethics-management apps. Although many of these are in the field of technology, it still requires good knowledge and understanding of business ethics to ensure their efficacy.

By Silke Colquhoun