In a world where the line between corporate governance and ethical leadership has become blurred, it is important to revert back to the fundamentals, Deputy President Kgalema Motlanthe said on Wednesday.
Speaking at the Regenesys graduation ceremony, he said perhaps the best way to balance the cut-throat environment in which “we must thrive in business should always be guided by our conscience”, taking into account the abiding interest of humanity and the public good.
It followed then that the safest route to follow for any self-respecting business leadership was to align with the supreme laws of the country.
It might not always be easy to do so, but given the impartial credentials of the Constitution, it was not only safe to base business ethics on the constitutional framework, but also a sure way of ensuring that the ethical purview of the operation was just and fair.
“This therefore, calls for business to espouse universal ethical principles that define the best interest of humanity,” he said in a speech prepared for delivery at the event.
“Universally applicable ethical conception enables us to see life not only through the prism of profit, critical as it is to the survival of business, but also make us understand that if we destroy the planet through our operations, or unreservedly fleece society, there will be no one to do business with in the near future.
“On this account, I would like to appeal to you to mind the results of your intended and unconscious actions.”
For the sake of posterity, it was important to know one’s responsibility in ploughing back to the communities and crucially, giving back to the planet.
The BP oil spill in the Gulf of Mexico was a reminder of the path everyone needed to avoid, Motlanthe said.
The consequence of this tragic episode might very well affect millions, most of whom had stood to gain nothing from the mega-profits BP made.
He said generations to come, mostly from poor acres of planet earth, might be doomed to wallow in even deeper misery than their forebears for the environmental crimes of a few.
At the level of social context, the recent controversies around Fidentia and commodity price-fixing had called into question the status of corporate governance and ethical leadership in the private sector.
What had emerged quite clearly from these cases of price-fixing was the imperfection of the system.
In a situation which allowed for mergers and hostile takeovers, it reached a point where competition was determined from within and in the process competition was removed.
The end result was that prices were determined by price givers, the monopolies, and not through the laws of supply and demand.
“This is a reason why good governance has to be central in moderating the system through rules and regulations, he said.
For any society to thrive, especially for the benefit of the poor, it had to have in place moderating mechanisms, plus checks and balances because the system in its nature was imperfect.
According to the Ethics Institute of South Africa, ethics touched on good and fair conduct which “shapes the decision and actions of organisations and individuals making decisions on its behalf”.
If they were to have real meaning, codes of ethics needed to be enforceable.
If there were no mechanisms to enforce them, this left room for their manipulation and venality.
“Our society is full of examples where unethical actions have had negative effects on the lives of ordinary people, especially on the poorest of the poor.”
But, ethical considerations were not confined to the private sector only.
In the political sphere, good ethical practice had had its own ups and downs.
“We see a direct link in the practice of ethical leadership and transparent and representative governance.
“It is what we mean by servant leadership given that the opposite of servant leadership is self-seeking leadership,” Motlanthe said.
By definition, self-seeking leadership placed individual interests high above those of society and was subsequently liable to pursue ill-gotten wealth and fall into the trap of corruption and greed.
Self-centred leadership was an indication of unethical leadership which had forgotten its primary responsibility to the electorate, shareholders and ordinary employees.
Such a leadership had sacrificed the principles of accountability, he said. — Sapa