I had to read and reread the thought-provoking opinion-piece by Patrice Rassou of Sanlam Investment in BusinessDay of 30 April, to understand the breadth and depth of the moral and ethical morass we find ourselves in.
One can draw a line from our down-and-out crime-fighting institutions poisoned by bad leadership, scandals and criminal investigations, through most of our state-owned entities unable to support themselves but acting as the troughs where many have for years gorged themselves, to several private sector high-flying businesses which are shown up to have been lead by executives with little moral / ethical fiber.
Our ethical morass indeed runs wide and deep.
The VBS Bank saga must rate as a particularly low point in all this. It apparently lent large sums of money to its own directors, to shareholders of its holding company and to municipal officials . It paid handsome commissions to attract the deposits illegally sourced from these municipalities. To top it off, several of the banks executives received mortgage loans amounting to millions.
Even the auditors received undeclared loans and did not find anything wrong with the bank’s governance structures. This is too much to stomach.
Patrice Rassou rightly asks what can be done to correct this state of affairs. “If auditors cannot be trusted, perhaps other insiders can help? Independent non-executive board directors may well be the last recourse for investors.”
To this I want to add the under-appreciated role of asset managers prepared to confront the directors and management of issuers when a change in strategy is needed, or to express their dissatisfaction with executive pay structures being applied. Please use it more often.
He mentions the success Jeff Bezos, one of the richest people in the world, is having on the back of a culture of high standards which is key to Amazon providing better products and services.
It is more than likely that these Amazonians are “Millennials” and typically in their thirties and generally familiar with communications, media, and digital technologies.
Millennials want to work for a company that stands for similar values they believe in and are drawn to socially responsible companies. Creating a secure workforce for the future makes it important for company management to better understand the next generation and what matters to them.
Read the full article from Patrice Rassou here