Walter Bhengu | Project Director | Legislation & Governance | South African Institute of Chartered Accountants (SAICA) | mail me |
Collaboration between government and business is vital to realising economic growth. Government should set up a conducive environment for businesses to operate while businesses ensure that they help grow the economy and employ citizens. This partnership must ensure that socio-economic goals are also met for the benefit of citizens.
We have heard of government initiatives such as Operation Phakisa, Operation Vulindlela and the South African Government and Organised Business Establish Partnership Initiative. These initiatives are key to ensuring smooth collaboration to address socio-economic challenges faces the country.
Collaboration between government and business
Collaboration between government and business is something commonly seen at the global stage with the G20 setting up the B20 in 2010 to ensure that the business voice is heard while trying to address the sustainable development goals.
One of the critical aspects that the B20 has focussed on this year has been how to incentivise private integrity and anti-corruption measures to enhance responsible and sustainable governance.
Responsible and sustainable governance refers to the practices and principles that ensure organisations and governments operate in a way that is ethical, transparent, and accountable, while also considering long-term environmental, social and economic impacts.
In the midst of various corporate failures and corporate scandals across the globe, addressing integrity and anti-corruption issues should be at the heart of any government or business. Ensuring that the entire accountability ecosystem is on board to implement, regulate and enforce appropriate measures to address integrity issues is vital.
The B20 is set to recommend to the G20 some proactive, preventative and incentive-based approaches to supplement more prevalent existing reactive, corrective and disincentive-based approaches to integrity and anti-corruption breaches in corporate. There are still debates on the final recommendations but there are general agreements on some of the initiatives that are critical.
Weeding out cartel behaviour
The Competition Commission introduced the Corporate Leniency Programme some years go. It is a process through which the Competition Commission will grant a self-confessing cartel member, who is first to approach the commission, immunity for its participation in cartel activity. This has proven to be a successful programme to weed out cartel behaviour.
In similar fashion at a global stage, it has been recommended that governments employ exemptions from prosecution and penalty mitigation for organisations that self-report a violation. It is important to note that such process tend to be viewed as being too lenient and do not act as a deterrent however success in South Africa should be seen as a handy barometer.
Think of the carrot and stick approach which is a term used to refer to a policy of both offering a reward and threatening a punishment to persuade a person to behave in a certain way. A complimentary system with that approach can go a long way. South Africa does still criminalise cartel behaviour as a deterrent.
Another very important aspect that is currently being debated, is how to make whistleblowing effective and how to adequately protect whistle blowers. The issue of financial incentives for whistle blowers has been mooted multiple times. It is a two-fold approach. In one angle you financially reward whistle blowers moving forward and the angle is to financially assist those whistle blowers who have over the years lost their livelihood due to their heroic acts.
It is often forgotten that introducing financial incentives to encourage whistle blowers to report wrongdoing promotes greater transparency and accountability within organisations.
Costs of corruption
The financial cost of corruption has a direct link to stunted economic growth. The last recommended incentive is that governments should provide preferential access to government support or services, such as grants, licenses, development assistance, export credits, trade assistance and procurement preferences, to organisations that implement effective integrity systems and anti-corruption measures, to promote responsible and sustainable governance in business.
The Department of Trade, Industry and Competition runs incentive programmes that stimulate and facilitate the development of sustainable and competitive organisations in line with national priorities. Eradication of corruption is a national priority, and other countries have the same objective.
Having vegetables in your meal gives you a healthier option for your diet. So let’s add carrots to our integrity and anti-corruption measures to enhance responsible and sustainable governance.
Related FAQs: Incentivising integrity boosts governance and accountability
Q: What is the significance of business integrity in incentivising governance and accountability?
A: Business integrity is crucial as it fosters transparency and accountability within organisations which enhances good governance and reduces corruption risks. By adhering to standards of integrity, businesses can build trust with stakeholders and contribute to a more ethical corporate environment.
Q: How does the OECD anti-bribery convention relate to corporate governance?
A: The Organisation for Economic Co-operation and Development (OECD) anti-bribery convention provides a framework for countries to combat bribery in international business transactions. By encouraging adherence to this convention, countries can improve their corporate governance structures and promote integrity across the private sector.
Q: What are some key messages related to the implementation of anti-corruption and integrity policies?
A: Key messages include the importance of a strategic approach to compliance, the need for effective oversight mechanisms and the role of collective action among businesses and institutions to prevent and detect fraud and corruption.
Q: What related policy issues should be considered when promoting integrity?
A: Related policy issues include the establishment of robust compliance frameworks, the need for transparency in governance processes and the importance of engaging stakeholders in the development of anti-corruption policies.
Q: How can businesses uphold integrity in their operations?
A: Businesses can uphold integrity by implementing comprehensive compliance programs, providing training for employees on ethical practices and establishing clear reporting mechanisms for corruption or fraud. This proactive approach helps to mitigate corruption risks and enhance overall governance.
Q: What role do OECD countries play in promoting transparency and integrity?
A: OECD countries play a pivotal role by providing guidance and best practices for implementing anti-corruption measures. They support the development of a robust framework that encourages businesses to adopt integrity practices and comply with international standards.
Q: What are the benefits of strong oversight in governance frameworks?
A: Strong oversight in governance frameworks helps to ensure accountability, detect potential corruption and enforce compliance with integrity policies. This not only protects the institution but also promotes public trust in the governance process.
Q: What strategies can be employed to mitigate corruption risks in the private sector?
A: Strategies to mitigate corruption risks include conducting regular risk assessments, fostering a culture of integrity, engaging in collective action with other stakeholders and implementing effective reporting and whistleblower protection mechanisms.
