Corporate SA ethics improving, slightly

Albeit from a low base, the Corporate Governance Index 2019 Report reflects improvement.

According to the Corporate Governance Index (CGI) 2019 Report, there has been a slight improvement in both corporate governance and ethics albeit from a low base. Released last month, the report offers an overview of South African organisations’ governance ratings from the perspective of chief audit executives. It measures key elements such as ethics, leadership, compliance, risk, performance and internal audit and is based on the King IV outcomes and principles of governance. The King Code of good governance, a world recognised governance guide, instils an integrated thinking approach from the top down with leadership and oversight in organisations.

One of the key findings of the CGI report was that just 14 percent of those canvassed at national government level believed ethics was an important part of their organisational culture as opposed to 31 percent at provincial level, 23 percent at district level and 37 percent at local government level.

These compared to 42 percent at state-owned entities, 72 percent at privately held companies and 78 percent at publicly held companies.

Speaking at the launch the report, acting CEO of the Institute of Internal Auditors SA (IIA SA) Charles Nel said ethics went from a rating of 3.4 (out of a maximum rating of four in the quantitative study) in 2013 and 2015 to 2.8 last year. This year the rating improved 3.5 percent to 2.9.

“There seems to be a sense of imbalance as media reports indicate otherwise as leaders are often under fire for a lack of governance and direction in both the private and public sectors. This scepticism and lack of competence is, more often than most, perceived to be a lack of qualified skills, vision and governance direction. Sadly, South Africans are increasingly losing faith and trust in their leaders with their legitimacy and credibility being questioned,” he said.