“Part of the reason I am dedicated to producing technology that simplifies financial management and forecasting is because I enjoy order and structure,” says Kevin Phillips, MD of idu Software. I am drawn to the unspoken rules, boundaries and balance of accounting, budgeting and corporate governance. Having said that, I cannot find fault with the laws, codes and guidelines that our government has put into place to enforce compliance with what must be the highest global ethical standards.
As corporate leaders we owe a fiduciary duty to our principals: our clients, our staff, our shareholders and our community. The word comes from the Latin fiduciaries – from fiduciarius literally meaning “to hold in trust and faith”. When we legally impose such a duty, it means that we have to act, at all times, for the sole benefit and interest of the one who trusts. We cannot get profit from them, we cannot hold a conflict of interest and we must at all times remain loyal. These principles are so sacred that they are written into our statutory and common laws. Directors who fail to uphold these laws face criminal prosecution.
I wonder what would happen if we held all the custodians of our trust (and money) to the same standard?
Last year, we vehemently waged a battle against a Secrecy bill that will allow our custodians to obscure their actions under a legal cloak of darkness. This year may see us take up arms against new laws on intelligence, security and graft-busting that seeks to serve the interests of the political elite, rather than the people who trust them.
Any financial institution or manager can attest that there cannot be any measure of accountability without transparency – perhaps this is why all three of the major global credit ratings agencies downgraded South Africa’s economic outlook due to “increasing levels of corruption”.
Perhaps we should change our mindset surrounding political governance and start viewing ourselves as investors, not citizens. After all, we exchange our hard-earned tax money for functioning schools, decent health care, well-maintained roads and public order on an annual basis. If those funds are misappropriated, we have to hold our directors – the government – to account.
After all, no CEO or MD can plead ignorance when it comes to financial transparency. As technology has moved beyond the days of paper ledgers and dusty archives, we’re able to view exactly what our corporate leaders are spending – even before the month is out. If an organisation is unwilling to deliver timely, accurate information that enables its stakeholders to hold them accountable, we have to wonder what it has to hide.
If we start demanding that government acts in line with their fiduciary duties with the same dedication that company directors are obliged to do, what will South Africa look like? Why should our tax monies be managed with any less accountability and visibility than our corporate investments?
As Reuel Khoza of Nedbank Group wrote in their annual report, “Our political leadership’s moral quotient is degenerating and we are fast losing the checks and balances that are necessary to prevent a recurrence of the past…”
Several politicians have added their voices to this concern. ANC Treasurer Mathews Phosa encouraged discipline and governance in his recent speeches; Public Service and Administration Minister Mildred Oliphant demanded that government intensifies the fight against corruption among public servants.
If we, as the investors of this country, add to the pressure to reveal information – not in trickles over months or years, but in a regular, accurate and timeous fashion, we will remove the temptation to exploit the system and perhaps start seeing the returns we’ve been craving.