This is how we end corruption

People don’t make unethical decisions because they are greedy.
Restoring ethical standards across society is a responsibility that has to be taken up by everyone. Image: Shutterstock

For a number of years, South Africa has been dealing with an ethical crisis. The disclosures being made at the Zondo Commission of Inquiry have highlighted just how severe and far-reaching corruption was at state level.

State capture, is not, however a purely public sector problem. It has required the involvement of many private sector players – as beneficiaries, enablers and willing participants.

At the same time, allegations of fraud and other irregularities have been hugely damaging to the share prices of a number of JSE-listed companies, including Steinhoff, EOH, Tongaat Hulett and Choppies. As John Green, co-CEO of Investec Asset Management, told the Morningstar Investment Conference last week, this has forced asset managers to do some serious introspection.

Read: SA’s corporate meltdown

“In South Africa, for too long management teams and boards were given the benefit of the doubt, and the consequence of that is that we’ve seen some situations that have destroyed significant value for investors,” says Green. “As investment managers, we have reflected on that deeply, and that benefit of the doubt doesn’t exist anymore.”

Who’s responsible?

There is no doubt that asset managers need to be more vigilant, and put boards and management teams under greater scrutiny. Their duty to investors requires them to ask tougher questions of the companies they invest in.

At the same time, however, asset managers are not going to be able to restore the ethical standards required across South African society. That is a responsibility that has to be taken up by the country more broadly.

As Professor Piet Naudé, director of the University of Stellenbosch Business School, told the Morningstar event, that has to start with understanding how we reached this point in the first place.

“Our research shows that people take bad ethical decisions not because they are greedy,” says Naudé. “It’s about social power.”

He explains: “We have built a culture among the privileged part of SA where your social approval does not rely on your knowledge or character, but what you have, the address where you stay, and what you drive. If you create a society that accords massive social power to material wealth, people learn that if they want to be accepted they must increase their private wealth.”

This calls into question whether we need to rethink our individual purpose. Why do any of us do what we do?

“Do not tell me your purpose is to make as much money as possible,” says Naudé. “Money can never be a purpose. It is a means to an end. The question is, what is that end?”

Restoring trust

South Africa has unfortunately also fostered a perception that people can act with impunity. None of the major players in state capture has yet been arrested, and Jacob Zuma has still not faced trial 14 years after he was first charged in relation to his role in the arms deal.

“You cannot run a system where the consequences are so long deferred from the actual wrongdoing,” says Naudé. “If you create a culture of impunity you don’t stop corruption or wrongdoing.”

This has led to a lack of trust in the system, both among the general public and the international investor community. That has to be restored through arrests and prosecutions.

Unless and until that happens, says Naudé, everybody has to remain vigilant about their own actions, because in such an environment, it is easy to overestimate our own moral character. We may believe we wouldn’t engage in wrongdoing, until the opportunity actually presents itself.

The solution

“You know where corruption starts?” challenges Naudé. “With you. What kind of leader are you, what kind of organisation have you created? Let us first take personal responsibility and not point fingers at the Zumas, Tom Moyanes and Markus Joostes of this world, if they are guilty.”

This is not just about being susceptible to doing something unethical, but also standing up to and reporting those we see around us behaving inappropriately. As strategist and former partner at Bain & Company Athol Williams noted at a recent speech at the Finance Indaba:

“Most of us are prepared to do the right thing until our bonus is at stake, our career prospects, our job, our family’s livelihood.”

Once again, the question comes down to priorities and purpose. What are we telling ourselves, and those around us, about what is most important when judging a person’s status? Is it material wealth, or something more?

Naudé puts it this way: “Unless we inculcate in our children and society that the best people are those who benefit mankind, we will not stop corruption.” 

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What! People don’t make unethical decisions because they are greedy. Well we know that they don’t do so for the benefit of others or to donate their ill gained spoils to charity.

Informal fallacies rule the roost here. Prof Piet thinks the corrupt, the crooked, the dishonest are not after money, they are after the end. The end being social status which is built on what they have, and what they have (or want) is in turn directed by a society that accords massive social power to material wealth which equals private wealth.

How is material wealth / private wealth not about money and greed and the size of the bank account? Either learn to call a spade a spade or pull the other one.

yes, even if all the human beings on earth had the same amount to their disposal at a specific date, the following day the “equility” will be past tense due to their different needs, and then the greed factor kicks in.

My question is: why must one study for a doctor or engineer at their own cost, if the raw scholar is earning / demanding a high salary totally out of relation to the educated professional level of the say doctor / engineer??? – once again the imbalance in money terms appears, but surely for a reason

What planet does this guy live on?

What a lot of intellectual mumbo jumbo . If you want to stop corruption you can’t go to wrong if you follow what the FBI and the IRS do to you when you get caught . We have gone so far the other side of bonkers that we
starting to feel corruption must be dealt with in a PC way . God help us if we think we can solve this scourge by making the Guptas write a thousand lines after school …………

……very true

Thabo Mbeki, as much as I scorned his racist rhetoric against whites for every conceivable ill in Africa, since the advent of man (and woman, transgender, non-binary idiot) he ran a very tight fiscal government with the likes of Tito and Trevor

Zuma began the binge to get rich offf taxes and Rama, indulged in half the “cake” as well. The next main course will be consumed even more ferociously by the likes of Mabuza and Ace Magashule

Yeah … thousands of years ago in the Middle East I think they used to cut off the head and impale it on a spike in the town square …

Total rubbish – put thieves behind bars and corruption stops, end of discussion.

Although there is corruption everywhere, most people would agree that the USA is far less corrupt than SA. Yet, especially in the USA, getting rich is seen as something to be admired. That’s also why there is no stigma to going bankrupt in the US – it shows that you took risks. So I don’t buy the story at all that corruption is due to material wealth equaling societal status. If that were the case, the uber-capitalist US would be 10x as corrupt as SA.

Government Corruption in the USA is actually far larger than in South-Africa since the Pentagon has never been audited. People who think corruption in South-Africa is terrible or that there is much unique about the way the ANC rules are basically just ignorant of the rest of the world.

It seems to me that some people failed to read the final paragraph,

“Unless we inculcate in our children and society that the best people are those who benefit mankind, we will not stop corruption.”

Proof once more that our reluctance to indulge in honest self-examination is perhaps the greatest weakness in society to day. We all suffer from self-centredness; Naude is pointing out that we need to encourage ‘other-centredness.’ He’s right……so let’s shoot the messenger!!

Pretty meaningless throwaway line in my view. Why not give an example or two of such people? Did he mean Mother Theresa or Bill Gates?? One who, by many accounts had a pretty unhappy life and the other who spends some of his ripoff monopoly money benefiting some of mankind; often misguidedly in my view..

Mother Theresa unfortunately makes bill gates look like a saint. I believe Hitchens covered some of that in one of his books .

The fact is that that the private sector is the source of the corruption as they have both the money to pay the bribes and the motivation to gain additional profit by doing business with those who have access to the public purse. This is the same IN EVERY country and when we suggest that South-Africa isn’t average in terms of corruption given our economic development level we are not doing ourselves any favors.

Very idealistic and how things should be in a perfect world. “Money can never be a purpose. It is a means to an end” Really. Tell this to the wealthy CEO’s and board members who are primarily motivated by obscene amounts of money. The problem is related to the societal system of greed (endorsed by organisations) where the divide between the rich and poor just gets wider by the day. Leadership and organisation culture starts at the top, not in the lower ranks. Do a better job of getting the right top management in place in maybe then things will improve.

“Man can live and satisfy his wants only by ceaseless labour; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labour of others. This process is the origin of plunder.

Now since man is naturally inclined to avoid pain — and since labour is pain in itself — it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labour.

It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder.” Frederic Bastiat – “The Law” 1850

South Africans should ask themselves where BEE fits into this paradigm.

And you should ask yourself why you can’t let your bigotry go and why Africans can’t benefit by the vast wealth of the country that whites monopolized for a century. BEE is a direct consequence of our history and people who don’t understand why it’s needed ( or why it will be flawed) have had far too much apartheid indoctrination and shouldn’t bother going to church anymore as it hasn’t helped them be even a modestly decent person.

Greed is defined as the intense and selfish desire for something, especially wealth, power, or food. So greed can be motivated by a need to attain a better social standing.

To conquer corruption you need clean enforcers and this is our problem. Everybody, including the enforcement agencies, has some dirt on each other and this paralyzes the system. And so we are having to find a “few good men” and women to prosecute the offenders but this takes time and will be resisted by the corrupt cabals. But we must persevere and challenge lethargy. Keep writing, keep talking, keep investigating, keep the pressure up. There is no quick fix!

Or we could just focus on making sure we do the correct thing in our country and stop worrying so much about the corruption. Corruption is very much a part of the capitalist system all over the world and with an fairly uneducated and conservative society our best hope is not to defeat ‘corruption’ but to concentrate on poverty aliviation by the most direect means possible. If we can’t create jobs without corruption just give people the money we would have used to try so they can at least survive and try to help themselves.

English 101. Wanting more (of anything) than a person needs is greed. Be it more money, more power, more possessions, more in the way of status or social standing, more food, etc, etc.

Oxford Dictionary
Greed – noun
1. a strong desire for more wealth, possessions, power, etc. than a person needs. His actions were motivated by greed. Greed for something. Nothing would satisfy her greed for power.
2. a strong desire for more food or drinks when you are no longer hungry or thirsty. I had another helping of ice cream out of pure greed.

Dictionary.com
Greed – noun
excessive or rapacious desire, especially for wealth or possessions.

Perhaps the Prof should go work in the real world to see that it’s absolutely all about greed.

Bribing a cop or government official to process an application speedily is not about greed

Only a very few people in the private sector function entirely on greed and consider the bottom line their only concern. There’s a hundred things that goes into how we interact and since we are all human beings what we can instead of presuming greed is to look at how we can change our economic systems to take the pressure off people thus avoiding the consequence of desperate actions.

People DO make unethical decisions because they are greedy. The ONLY way to end this is to charge and convict (the immoral, corrupt and the greedy ones) of high treason! The looting of SA`s resources, including its people MUST stop.

Personally I think SA (and ironically globally this persists too) have a problem with hiring. If you look at the C-Suite we seem to prefer hiring these types of people.. combo that with a lack of opportunities, high inequality and a lot of moral decay in society and not expecting this to have an impact on ethics & fraud is hilarious.

We have a choice.. either go the way Nzl does where the ability to commit fraud is extremely limited due procedural impediments the government has placed and polices or stay with the free form and suffer more.

This being Sa, ruled by the personality types that want to take advantage, they will not put up with such limitations on their ‘power’.

The societal decay.. well.. easily fixed by making civil offenses undesirable for c-suite. If you drive past some pricey golf course in Gauteng, business parks etc, could the number of flashy cars jumping red robots, going thru barriers, cutting barrier lines, painted islands, speeding.. why the hell are putting up with entitled c-suite execs who can’t control themselves? If a c-suite exec thinks nothing of committing civil offenses like traffic offenses.. how are we trusting them running a company? When no one is looking that’s shows what’s happening..

People do make unethical decisions so what we can do is lock up some hundreds of the worst abusers in the Apartheid police state. Maybe this sets a nice example and the ANC cadre’s now understand that crime will be punished and that they should look banish the criminals among their ranks.

Of course that will not happen and we will just pretend that the worst criminals in this country were never punished and that some of them now have the audacity to demand the punishment of middling crimes and only in the public sector. Such hypocrisy will not get you far with African voters but you can probably at least get the beneficiaries of apartheid to overlook it.

The wealthiest people I know drive modest cars, very nice houses that are not palatial, and have modest lifestyles. The flashy guys and girls are the exception.The rich are mostly discreet, sort of Warren Buffet like.
There is a big difference between socialites and discreetly wealthy people.
I cant agree with the Prof.

Some of those very wealthy gained their money trough such exploitative methods they at least have the good sense to keep a low profile. Of course some do not and try to spend all their ill gotten goods before someone can come take it back… Do remember that most wealth is still inherited and that if you grow up with it ( as most in south-Africa do) it does affect the way you see it and what you consider to do with it.

Personally i do prefer those who inherit wealth over those who have to gain it as it overwhelmingly takes a killer instinct to gain true wealth. That Balzac quote about how every great fortune involves a great crime may be an overstatement but i doubt gaining great fortunes often involved great morality.

Because there has been no implications for the ANC cadres implicated in State Capture and corruption the measured indice of irregular expenditure in our SOE’s has risen. The problem persists.

Yes, this is also probably why racism and bigotry persist. I sincerely think we should punish some of the worst abusers under apartheid and see if that helps cure this country of the bigotry among the beneficiaries of apartheid.

Articles are getting worse and worse.

This is the most ridiculous article I have ever read and to think that Prof Naude is linked to teaching up and coming students – heaven help S Africa

What a pile of trash.

There is a complete lack of consequence management, allowing and encouraging people to become corrupt, because they know they will get away with it.

The worst possible outcome will be to pay back the money, so no net loss. Just try again, because most of the time you get away with it.

Leaders set the example of behaviour that the populace follows. Leaders show that you will get away Scott-free.

Those of us who already have ethical standards are sick of having to watch everyone else get away scot free. You can’t teach ethics to habitual thieves.

LONG JAIL TERMS ARE A GREAT DETERRENT !!!!!!!!!!!!!!!!!!

A number of Patrick’s articles are nothing but hoggwash, which is unfortunate and dissapointing to say the least.

Corruption only stops with Consequences = Jail.

It is no different than the death penalty debate. Murderers don’t worry about the noose because the risk of being caught never mind prosecuted is too low.

Corruption is even slippier. If construction company or bread company or bank or whatever is caught colluding, the shareholders end up paying the fine a decade after the overpaid hired help were paid bonuses. Corrupt officers in private and public sector should face ten years in jail and a high probability of being sentenced. What salesman (sorry, business development director) will risk ten years in Diepsloot for a R5m commission for colluding on deals or paying a bribe?

The end of humanity is the only viable solution.

End of comments.

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