Corporate Governance and Ethics

American Businessman, Howard Schultz, once said: “When you're building a business or joining a company, you have to be transparent; you can't have two sets of information for two sets of people.”

Finding small plugs to fix the monumental leaks that cause overspending, inefficiency, corruption and fraud is the answer to South Africa’s growing public sector problems, says Professor Norman Faull of the Lean Africa Institute ahead of Africa’s 8th Lean Management Summit.

The recent murder of an anti-mining activist has thrown into the spotlight the critical need for business to understand societal expectations if it wants to be sustainable.

Ethical, or unethical, leadership behaviour is a hot topic in our country. One issue receives relatively little attention – the relationship between the moral high ground and less lofty considerations such as profits, brands and careers.

Corruption and unethical behaviour in South Africa continues to be an ongoing concern – not only for the growth of business but also the South African economy.

There is a need for a more values-driven leadership model in business worldwide, says a South African leadership expert, and the evolving FIFA scandal illustrates this only too well.

Taking an independent stance and engaging on the hard questions is crucial for a principled and effective board of directors.

The Boardroom plays a critical role in channelling corporate behaviour. Boardrooms not only play an initiating role in defining corporate culture, but are key players in implementation.

Globally, there is emerging evidence of a trend towards employees entering the
working world to seek employment with businesses that demonstrate ethical corporate
behaviour, and which support the local communities in which they operate.

South African companies have little to fear from the accounting and auditing
reforms announced by the European Union in April, according to Andrew
Hannington, CEO of Grant Thornton Johannesburg.

Accountability is an important vital behaviour that spans across every sector
according to Helene Vermaak. "Instead of team leaders being the only ones
to hold others accountable, everyone in the team or department should hold
everyone else accountable.'

Globally, there?s a desire for effective leadership.Best practice boards recognise the
value of ethical leadership and the need to take cognisance of a broad stakeholder
base. Sound governance demands committing to ethical behaviour throughout the
organisation.

What are the responsibilities of directors when deciding to place a business under
business rescue or to declare insolvency? Both options come with their own set of
challenges and executives should understand their duties and options clearly before
taking that first step.

The process of political appointments that currently undermines board independence
in state-owned entities will not be discarded according to the latest presidential
review committee report. Will this practice undercut progress in other areas of
governance legislation.

South Africa, along with Brazil and China, is at the forefront of corporate governance
transparency policies. According to a global sustainability report these economies are
leading the pack in their requirements for reporting and social responsibility.

The board selection process has gone awry because it emphasises specific
competencies and skills. More emphasis should be placed on science, politics and
intuition in the selection of board directors in order to meet the challenges facing
today?s corporations.

In its quest of ensuring that a just war is waged against the scourge of corruption CESA has partnered with Dr Janette Minnaar-van Veijeren to present a corporate governance and ethics course to their members and any other organisation wanting to be part of the solution.

We are at a defining moment in our country?s history. The tragic violence brought on
by Marikana, the multitude of service boycotts, countless reports of corruption,
ineffective policy execution and the high inequality levels in South Africa, are
indicators that the country has broadly-based value creation issues.

The Department of Governance and Traditional Affairs has announced that that
municipal managers could face a ban if found to have committed fraud or corruption.
This was stated in its Municipal Systems Amendment Act draft.

Based on his chapter on board selection and risk, Amrop Landelahni, director Alan Witherden said that SA companies undertaking operations in multiple jurisdictions across Africa are faced with divergent legislative and governance regimes that make doing business more complex.

The emergence that Lance Armstrong, seven-times winner of the Tour de France, not
only used prohibited performance-enhancing drugs in each of his victories but also
led a highly organized doping program of remarkable sophistication could have
widespread legal ramifications for professional sports.

Increased competitiveness globally, along with economic uncertainty, massive technological advances pose increased challenges to directors. Sandra Burmeister speaks about the importance of sound corporate governance and the consequences of unethical leadership.

In recent times it has become much easier for companies to operate in various countries simultaneously. The most integral challenge for these companies is to align its strategies with the corporate governance policies within each country. Within SA BEE requirements pose particular challenges to companies.

Denel has been named by the Centre for Corporate Governance as the best-performing state-owned company in terms of corporate governance. Their commitment to good corporate governance has been increasingly recognised by independent analysts.

Ethics in business has come under increasing scrutiny over the years as businesses use more and more underhanded means to beat their competitors to a customer?s door. The real problem with the topic of business ethics is the perception of the company.

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