A view from the ABSIP Asset Management Think Tank

13 March 2019 

Ethics, Growth and Transformation: Let us not be derailed

Since the monumental Steinhoff scandal broke in December 2017, investment professionals across the country have spent many hours of investigation and self-reflection trying to understand how such a large scale corporate fraud could have been perpetrated under their very eyes. This anxiety was magnified given the 2014 African Bank failure still remains in recent memory. When you add to that the series of alleged irregularities found for example in work done by auditors, KPMG, business conducted by VBS bank, irregularities at Resilient and EOH; the sector seems to be reeling from a series of ethical shocks.

Now 23 years old, ABSIP is South Africa’s foremost member organisation of black financial sector professionals and firms. We represent a membership of large established corporate firms; large and small black-owned firms and the full breadth of black professionals in the sector. At its heart ABSIP stands for 3 core objectives – advocating for meaningful transformation and diversity across the financial sector; ensuring black professionals and business contribute to sustainable shared economic growth and being a visible champion of an ethically run sector.

Unlike transformation and BBEEE, ethics is not about skin colour. That central moral compass of doing the right thing is a human characteristic which is genderless, colourless and creedless. Indeed financial sector professionals have to hold themselves to an even higher form of ethical principles, for a great deal of our responsibility is a fiduciary one, where we are deliberately entrusted with the care and safeguarding of other people’s money. It is for this reason ABSIP is as explicit as it is in our pursuit of ensuring an ethically run, transformed and equitable financial sector in South Africa. All members (whether individuals or corporates) are automatically expected to adopt and internalise the essential guiding principles and code of conduct that we as a body espouse. While we don’t have any jurisdiction to police this in everyday actions, this is our expectation and what we stand for.

At ABSIP, we have noted with deep frustration and offence that there have been recent events and media narrative, spurred in part by the current inquiry involving the PIC, which could be construed with giving ethics and corruption a skin colour (and the colour isn’t white). If anything, the examples of Steinhoff, KPMG, VBS, Resilient and EOH at their very essence reveal that wrongdoing rests with the morality of an individual irrespective of his or her skin colour. As an industry body, we could never know what goes on in the hearts and minds of each of our members in each of their dealings, but we do know is that we expect them to uphold the organisation’s high standards of integrity and professionalism. We believe our members, like all members of the public, are innocent till they are proven not to be so. We know should any member be implicated in any wrongdoing, we would expect them to submit themselves to any justifiable process that would involve them clearing their name or accepting the consequences, if innocence is not the adjudicated outcome.

When there is serious doubt raised about any material business practice, inquiries, just as the current one involving the PIC and the State Capture are positive developments. They seek to uncover why the doubts were raised in the first place and establish ultimately what is fact and what is fiction. Privy to only the very same information the public is, black financial sector professionals as a collective and ABSIP as a black member organisation is no different to the public at large when we say we welcome the pursuit of transparency and clarity in the PIC inquiry. However, often doubts and questions have a way of clouding everything. In the case of the PIC, even with the current inquiry underway, we refuse to ignore the good the corporation has done over the years – the force for transformation it has been; a leading champion in giving both black and small businesses a chance when few other private and public sector participants would do so. The knock-on effect therefore of its survival as a meaningful and sustainable player is not to be underrated.

Like ethics, competency too has no skin colour. In fact competency has no external identifier except itself. In the arena of intellectual capital (which financial services rests on), a young small business with the right talent could be as (if not more) capable of delivering a relevant service as a large multi-national brand. The PIC, and entities with similar transformation and growth objectives, have sought to provide opportunities to all businesses, whether big or small, known or unknown, black or not.

While some are destinations and some are journeys, ABSIP won’t rest till we meet our objectives. And we will remind all who care to listen what we stand for and why.