The strategic role of the business sector in combating corruption

  • 0


Observers often report on the high prevalence of corruption in South Africa. Despite South Africa’s assent to international anti-corruption efforts the country is continuously confronted with negative perceptions about high levels of corruption. These negative perceptions relate not only to public sector corruption, but also to widespread corporate corruption. The highly publicised Transparency International Corruption Perceptions Index (TI CPI) of 2012 ranks South Africa 69th out of 174 countries (Corruption Perceptions Index of 2012), and in 2018 South Africa was ranked 73rd out of 180 countries (Corruption Perceptions Index of 2018), confirming corruption as a real and ever-worsening problem for the country. In addition, 54% of South African participants to the TI Global Corruption Barometer of 2013 felt that the business sector was corrupt or extremely corrupt (Global Corruption Barometer of 2013). The results from the latest African edition of the Global Corruption Barometer indicate that business executives across sub-Saharan Africa are seen as the second most corrupt group across the region (42% say most or all business executives are corrupt) (Pring 2015:8). This is evidence that corruption is not only a problem for the country as a whole, but also for the business sector.

Goss (2013) as well as Dubbelman (2011) suggest that the business sector should become more involved in combating corruption by increasing the accountability of company executives and boards of directors. Calls for increased anti-corruption activity on the part of the business sector raise questions about the adequacy of the level of activity of the business sector in the development and implementation of the business sector’s Anti-Corruption Plan (ACP). We submit that this lack of activity can be ascribed to the fact that the business sector does not have a business sector anti-corruption strategy. Based on first-hand experience and involvement as a member of the Business Unity South Africa Anti-Corruption Working Group (BUSA ACWG), the primary author corroborates the fact that the development of a business sector anti-corruption strategy, recorded in the ACP, has not been accomplished. However, there is a strong case for businesses to develop an anti-corruption strategy (PricewaterhouseCoopers 2008:3–5). Anti-corruption strategies assist businesses to prevent financial losses, reduce the risk of losing business opportunities, and reduce reputational, legal and regulatory risks that can negatively affect a business. We further submit that the absence of a business sector anti-corruption strategy that would complement the ACP leaves the business sector exposed to such risks. One example of losses being suffered by South African businesses and negative reputational exposure due to alleged corruption is the imposition of fines totalling in excess of R1,4 billion by the Competition Commission on 15 construction companies for alleged price fixing and collusive cartels (Symanowitz 2013:9–13). 

What is the potential value and importance of a business sector anti-corruption strategy? To address this question, this paper presents qualitative data as experienced by business sector representatives serving on the National Anti-Corruption Forum (NACF) and the BUSA ACWG. The guiding research question is: What is the strategic role of the business sector in combating corruption? Rather than focusing on the role of government and law enforcement agencies in combating corruption, this article focuses on the strategic role of the South African business sector in combating corruption. This article is based on research for a Master of Arts degree (Goss 2016). A qualitative research approach was followed since this study is exploratory-descriptive in nature and was aimed at gaining an understanding of participants’ experiences regarding the strategic role of the South African business sector in combating corruption. A single instrumental case study design was chosen as the research design for this study. Individual in-depth interviews were conducted with a purposive sample of (n=15) South African business sector representatives, which included the public sector, business sector and civil society serving on the BUSA ACWG and the NACF. These members were selected as the sample for inclusion in this study since they are involved in combating corruption by virtue of their participation in the NACF and/or the BUSA ACWG, are responsible for developing and implementing business sector anti-corruption measures, and have been entrusted with developing an ACP for the business sector and a business sector anti-corruption strategy. The participants were from diverse industries and entities. Interviews were conducted by the primary author according to a prepared interview guide and were digitally recorded. Interview transcripts were subsequently analysed by means of the data analysis spiral method (Leedy and Ormrod 2010:153). Prior approval to conduct this study was obtained from the NACF. Ethics approval was granted by the University of South Africa’s research ethics committee.

The findings of this study suggest there is no strategic approach which enables the business sector to effectively combat corruption. We propose a Business Sector Anti-Corruption Strategy complemented by an improved ACP to enhance the business sector’s measures to combat corruption. The combating of corruption by law enforcement agencies and South African government departments as well as parastatals dictates the anti-corruption environment in the country. However, the strategic role of the business sector in combating corruption has been neglected. Currently the South African business sector does not fulfil its strategic role in combating corruption. Instead, it merely takes part in various local and internal anti-corruption discourses. Examples are the NACF, the National Anti-Corruption Summits, individuals personally participating in B20 dialogue and a myriad of fragmented, and poorly implemented aspirational activities, many of which hardly take root or make a notable impact. Perhaps the most laudable, specific anti-corruption action here is that of the National Business Initiative (NBI) participating in business sector efforts, albeit hardly directed and universal in nature, and limited in scope of activities. The business sector effort is visible via the United Nations Global Compact (UNGC), predominantly driving the concept of Integrity Pacts, and promoting whistle blowing via Corruption Watch. However, it is enacted without the necessary follow-up investigative and enforcement rigour, does not drive corporate governance measures in certain industries and also has no obligatory participation, rigorous enforcement and scrutiny of delinquency.

Anti-corruption efforts and corruption itself are not treated as a strategic issue and therefore the involvement and committed, rigorous intervention of senior business leadership are absent. For example, the business sector and its leadership fall far short when it comes to being transparent and accountable and diligently probing corruption. The absence of corruption as an agenda item at business leadership forums is evidence that corruption is not sufficiently prioritised in local business sector leadership. The business sector needs a national, empowered, business sector anti-corruption body that scrutinises corruption via investigation and supports prosecutions, with the ultimate aim of “social ostracisation”. To achieve this, a business leadership forum focused solely on corruption is necessary; it should be supported by government, civil society and other stakeholders. The lack of a business sector anti-corruption strategy is a fundamental cause of a poor ACP and, ultimately, the current poorly structured and incomplete anti-corruption efforts on the part of the business sector. 

The business sector, especially business leadership, needs to take a more active and committed role in combating corruption. This must start with an understanding of the scope and depth of corruption in the business sector, and the impact on the literal “business case” must be met with a responsive business sector anti-corruption strategy. The diversity, non-integration, resource constraints and trust issues between the stakeholders involved in combating corruption pale beside the value and importance of addressing the problem of business sector corruption. The limited activities in the ACP, including limited implementation thereof, do not bode well for the prospects of a flourishing business sector. A great deal should be done, and with relative urgency, to develop a business sector anti-corruption strategy to serve as a strong prologue to illustrate the seriousness of the business sector in combating corruption. 

Keywords: Anti-Corruption Plan; anti-corruption strategy; business sector; Business Sector Anti-Corruption Strategy; corruption; National Anti-Corruption Forum


Lees die volledige artikel in Afrikaans

Die strategiese rol van die sakesektor in die bekamping van korrupsie


  • 0


Jou e-posadres sal nie gepubliseer word nie. Kommentaar is onderhewig aan moderering.