* NOTE: Supporting video, audio and image available at http://bit.ly/1AXOiFk The year is barely a month old and already we have ample evidence of how easily societies can fracture. The escalating violence in West Africa perpetrated by Boko Haram, the massacre at the Charlie Hebdo offices in France and, thankfully less dramatically, the Twitter storm that broke after President Zuma’s remarks in Cape Town, and Zelda la Grange’s tweets from London—all these incidents graphically illustrate how different beliefs and opinions can pull nations apart. “We all want to live in countries that are safe and prosperous, and destructive conflicts makes that an impossibility,” says Deon Rossouw, CEO of the Ethics Institute of South Africa (EthicsSA). “Nations, and particularly nations like South Africa, with its history of division, need a strong moral glue to hold them together. Unfortunately, ethical behaviour cannot be legislated: we all have to make it habitual or we will find ourselves in a race to the bottom.” Rossouw argues that if we cultivate the following three ethical habits (or virtues), we will each be playing a role in creating a safer and more decent society. Moral sensitivity Moral sensitivity means considering how what we say or do affects others in the community. “It’s about transcending narrow, short-term interests to consider how our words or actions affect others,” he says. “The misuse of social media for instance is a concern because people use it in the heat of the moment, forgetting to put themselves in the other person’s shoes—we remain trapped in the business of scoring debating points and end up painting each other into corners.” Moral imagination Moral sensitivity should be complemented by cultivating the ability to look beyond the moment at what might be—the “big picture” so beloved of business strategists. “Moral imagination is the ability to look beyond existing divides and see the potential that can unfold if we approach matters differently”, he said. Take the Twitter storm that erupted after the President’s remarks linking Eskom’s current woes to apartheid, and that the arrival of Jan van Riebeeck spelled trouble for the Cape. The reactions were largely all too predictable, but what if they had focused more on the kind of society we want to create? After all, the President basically condemned himself by what he said, but the heated responses kept the debate at the same level, by and large. “People tend to fight instinctively for their position without realising the long-term damage they are doing to society,” Rossouw comments. “We have to learn how to lament what we see as current shortfalls in such a way as to bring forth the future we want.” Moral courage Quite simply, most people have the intention to act morally or ethically, but they also need to act on their moral intentions, even when doing so would be inconvenient or not self-serving. If we see corruption occurring, we have to put aside feelings of loyalty or expediency and report it; and if we are caught out, we should not take the easy way out by offering a bribe. Deon Rossouw emphasises that it would be a mistake to think that integrating these ethical habits into the way we live our lives is unattainable. “Nelson Mandela was a shining example of somebody who had moral sensitivity, moral imagination and considerable moral courage,” he explains. “He was able to think himself into the minds of his opponents, he never allowed a current issue to make him lose sight of the South Africa he wanted ultimately to create, and he acted on these insights even though it may have cost him some support. We need to follow his lead.” ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on EthicsSA please visit: Website: www.ethicssa.org LinkedIn: Ethics Institute of South Africa Facebook: Ethics Institute of South Africa International Fraud Awareness Week offers South Africans an opportunity to reflect on why the many measures taken to combat fraud simply don’t seem to be delivering results. The reason, argues Professor Deon Rossouw, CEO of the Ethics Institute of South Africa (EthicsSA), is that the remedies proposed typically fail to integrate ethics. “Most fraud studies mention the failure of ethics in their analysis of the causes of fraud, which always seems to have risen since the last study, but they seldom include an ethical component in their proposed remedies,” he observes. “I wonder whether that’s not because these studies are generally conducted by accounting firms which—quite naturally—focus on the tools they have at their disposal, primarily hotlines, controls and policies. Don’t get me wrong: hotlines, controls and policies are absolutely vital, but they simply don’t deliver results unless they are supported by an ethical corporate culture.” Only when a deep ethical culture has been created, and is self-sustaining, will employees and government officials do what is right irrespective of whether they are likely to be caught, or what their need might be. If ethical behaviour is imposed from above and compliance is solely based on fear, fraud will continue to grow because the factors that motivate it, a toxic mixture of greed and need, remain in place. Professor Rossouw proposes three actions to strengthen programmes for reducing fraud in both the public and private sectors significantly. This is critically important given the huge impact that fraud, used in the broad sense to include bribery and corruption, is making on service delivery. Provide training on corporate anti-fraud policies that includes an ethical dimension. It’s a shocking fact that only around 30 percent of C-suite executives and 50 percent of employees attend current training on governance policies, providing one clue as to why simply having the policies is not enough. Corporate leaders must set the tone by doing the training and insisting those who report to them take it too. “And if the training has a proper ethical framework, we can start to change behaviour,” Professor Rossouw comments. Ensure ongoing communication about fraud and honesty, again made within an ethical framework. Building an ethical culture will not be achieved in a day, and must be considered to be a journey. A well-crafted communications strategy can help keep the issues top of mind and reinforce the fact that compliance with corporate policies is not just a business need but a moral obligation. Recognise and reward ethical behaviour. Companies and other organisations recognise financial performance, and thus they have successfully created a culture that promotes behaviour that improves profitability. Recognition and reward systems must be adapted to incentivise ethical behaviour. These three actions are relatively simple to put into effect but they can be extremely effective because they harness the power of ethics to change the way that people behave—even when nobody is looking! “Building an ethical culture is critically important because it helps us to go beyond detecting fraud to preventing it from happening in the first place,” Professor Rossouw says. “For fraud to happen, there needs to be opportunity, motivation and then the capability to rationalise the wrongdoing. Ethics helps to stop fraud from occurring by undercutting the motivation to commit it, and the individual’s ability to rationalise what he or she has done.” ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on EthicsSA please visit: Website: www.ethicssa.org LinkedIn: Ethics Institute of South Africa Facebook: Ethics Institute of South Africa While most business people can talk with ease about fraud and corruption, they have more difficulty talking about the ethical conduct that they would like to see in business. Very simply, business ethics revolve around actions that balance self-interests with the interests of others, and with the greater good. Taking or assigning responsibility for ensuring that business ethics is being practiced is however not as simple. For larger companies, it has become common practice to appoint an ethics officer. This incline in the appointment of ethics officers is mostly due to the various corporate governance developments and regulations. Smaller companies or organisations aren’t as strictly governed and regulated, and might therefore be unaware of the value of appointing an ethics officer. “There are many sound business reasons supporting the rationale for creating a position for an ethics officer, no matter the size of the organisation,” says Professor Deon Rossouw, CEO of the Ethics Institute of South Africa (EthicsSA). “At a broader level, widespread adoption of King III and similar codes, and the integration of many of its principles into law (such as the Companies Act) is testimony to the fact that good governance makes for good business. In the public sector, the Integrity Management Framework, which was adopted by Cabinet in 2013, requires that all national and provincial departments have an ethics officer.” According to Professor Rossouw, these codes and regulations came into existence because there is a business need for them, but businesses don’t necessarily understand what value an ethics officer can offer to the company. It is however easy to determine whether a business requires an ethics officer, with the following signs being the most obvious. Double standards for unethical conduct An ethics officer is more than a signal or a guarantee of a company’s bona fides. He or she can help to prevent fraud, corruption and other malpractices from occurring by actively managing corporate ethics and building an ethical culture. Ethics tends to be an all-or-nothing game, and companies that tolerate unethical behaviour in certain areas quickly become rotten. Poor employee morale, high staff turnover, constant litigation: all of these cost money and time, ultimately acting as a brake on growth. Employees are unsure of how to deal with unethical conduct The business environment is much more complex than it used to be, and its complexity is increasing. Navigating tricky ethical issues is increasingly something that requires professional expertise—common sense on its own (always in short supply anyway) is no longer a reliable guide. Ethics officers become the de facto helpline for company employees on all ethical issues. Stakeholders are concerned about fraud in the business Investors, business partners and customers all are asking harder questions to ensure that companies with which they do business are ethical. As the 2013/2014 Global Fraud Report shows, global fraud is on the increase. An ethics officer acts as a signal that the company is serious about maintaining a high ethical standard. Whistle-blowing data not analysed Ethical officers act as a clearing house for all ethical issues. Noteworthy added value they bring is the analysis of a company’s whistle-blowing data to look for trends. “Ethics officers are often appointed from amongst a company’s own staff in addition to other duties, and that is certainly a good option for smaller companies,” Professor Rossouw concludes. “However, training and certification are absolutely essential to ensure that the ethics officer is empowered and can deliver the maximum business value.” EDITORS NOTE: EthicsSA is currently the only organisation certifying individuals as Ethics Officers in South Africa and in Africa. More information as well as a list of certified ethics officers is available at www.ethicsa.org ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on EthicsSA please visit: Website: www.ethicssa.org LinkedIn: Ethics Institute of South Africa Facebook: Ethics Institute of South Africa A recent three-day dialogue between Chinese and African stakeholders has identified a number of actions to improve the business relationship between China and its African trading partners. “The three-day meeting was an intense and valuable process that identified some clear action points for the major role-players, with the aim of improving this important relationship to the benefit of both parties,” says Professor Deon Rossouw, CEO of the Ethics Institute of South Africa (EthicsSA), who hosted the Dialogue. China and Africa must share responsibility for ensuring mutual economic growth Overall, the dialogue concluded that both business and government, Chinese and African, shared responsibility for ensuring that China’s business presence in Africa was not just one focused on extracting raw materials, but one that stimulates African economic development as well. Public sector must create and enforce framework for investors When it comes to the government arena, delegates were clear that African governments have a responsibility to create and enforce a clear framework for foreign investors. In countries where such frameworks do exist and are enforced, relationships between Africans and Chinese businesses are noticeably better. The Chinese government also had a role to play by setting clear standards for Chinese companies working overseas. There has been some talk of introducing a corporate responsibility rating system which, Professor Rossouw believes, could make a positive contribution. In addition, if the Chinese government engaged with African civil society organisations, especially in relation to aid, it could materially improve the image of Chinese business on the continent. Private sector must be good corporate citizens Delegates agreed that Chinese businesses needed to build closer relationships with their host communities by acting as good corporate citizens. By taking their social and environmental responsibilities seriously, they would be positioned to break down the isolation in which many of them operate. “In particular, by working more closely with local businesses, Chinese companies could build cultural understanding and create more opportunities for everybody,” remarks Professor Rossouw. “One of the big gripes about Chinese businesses is that they often import all their own labour, and thus deny African citizens and businesses the opportunity to participate in massive infrastructure projects.” An issue that was raised for further discussion was how to reach informal Chinese traders who are operating in Africa without the assistance or sanction of the Chinese government, and often under the radar of their host countries as well. Civil society organisations must act as watchdogs Delegates felt that civil society organisations could continue to play an important role as watchdogs by undertaking in-depth studies of the impact of Chinese business in Africa. It was also felt that, by working together, African and Chinese civil society organisations could help build bridges between Chinese businesses and their African host communities. Business schools must focus on business culture training Both Chinese and African business schools have important parts to play. African business schools need to prepare business leaders for working with Chinese businesses, and their Chinese counterparts need to focus on training the next generation of business leaders in ethical leadership. The dialogue was attended seven stakeholders each from Africa and China, representing business, policy-making, government, academia and civil society. The CEO of Globethics, a worldwide ethics network based in Geneva, acted as a neutral facilitator. “All the delegates have committed to developing a detailed set of recommendations and ensuring it gets as much exposure as possible,” Professor Rossouw concludes. “We will also hold a second dialogue in China in 2015 to take the process forward.” Organised by EthicsSA in conjunction with the Centre for International Business Ethics in Beijing, the dialogue is the outcome of research conducted by EthicsSA earlier this year, which found that Africans were generally negative about the impact of Chinese business in their countries. ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za For more information on EthicsSA please visit: Website: www.ethicssa.org LinkedIn: Ethics Institute of South Africa Facebook: Ethics Institute of South Africa |
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