Socio-political impact on Governance, Risk and Compliance Address by Mr B Holomisa, MP (UDM President) at the ITWeb Governance, Risk and Compliance 2017

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Socio-political impact on Governance, Risk and Compliance Address by Mr B Holomisa, MP (UDM President) at the ITWeb Governance, Risk and Compliance 2017

• Programme Director,
• Colleagues,
• Ladies and Gentlemen

1. Introduction

When discussing Governance, Risk and Compliance (GRC
) we must consider socio-political issues. It might be an obvious thing to state, but whether we like it or not social attitudes and political policy decisions, are the frames within which we must work to assure that our organisations (public or private) meet their objectives.

GRC as a discipline takes a dry, unemotional look at how we manage our organisations or businesses. Socio-political issues, on the other hand, are fuzzy, fickle and sometimes unpredictable. The obvious example of how socio-political issues affect how we operate, is the recent election of Donald Trump as the President of the United States of America. For many countries and companies alike, Mr Trump’s triumph will send (or has already sent) them back to the drawing board.

2. What is a “socio-political approach”?

Looking at GRC, with a socio-political approach, puts context at the centre stage and it assumes that politics matter. It must be understood that policy choices, that are not rooted in a deep understanding of how societies work will not produce the desired results.

A socio-political approach focusses on histories, social relationships, identities, capacities, power-dynamics, how resources are distributed and contested and it delves deeper into formal structures to expose underlying interests, incentives and institutions that determine how politicians act, how governments perform and how policy choices play out.

In this regard, the main issues to consider with a socio-political approach, is:
• To understand the interests and incentives facing different political, social and economic groups;
• How these influence politics, policies and efforts to promote development;
• How formal institutions and informal social, political and cultural norms interact and shape human interaction, as well as political and economic competition; and
• What are the values and ideas (including political ideologies, religion and cultural beliefs) that matter to political behaviour and public policy?

A socio-political approach is however not the “magic bullet” for the current political and economic issues and their implication on companies in South Africa, but it helps to identify opportunities and obstacles to reform, and it also assists leaders to target their efforts in a way that make them more likely to succeed.

3. Socio-political state in South Africa- Let’s talk politics!

Notwithstanding the possible impact that Mr Trump’s election has on South Africa, we have to consider our own space, our own challenges, and the impact of these issues.

We can make a long list, but for the most part South Africa’s economy is “Problem Number One”. In response to this challenge, we have since 1994 had:
1) the Reconstruction and Development Programme (RDP), then
2) the Growth, Employment and Redistribution (GEAR), then
3) the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) and thereafter
4) the New Growth Path (NGP).

The latest, plan number five, is the National Development Plan (NDP) which is touted as South Africa’s socio-economic policy blueprint. However, the NDP does not enjoy the support of the ruling party’s main allies, Cosatu and the SACP, which causes tension between organised labour and the business sector. This tripartite conflict undermines governance and compromises investor confidence, which leads directly to a rise in unemployment and poverty.

I make this sensitive point and talk a little politics at the risk of offending some of you, because of the following…

We could agree that our economy needs our undivided attention. Because, in one way or another, all the socio-political ills we suffer in this country could be eliminated, or at least mitigated, by a flourishing economy. Simply put, the dignity of a person is linked to his/her ability to put food on the table, to have a roof over his/her heads or own a property, to buy clothes, to be healthy, to have an education and so the list goes on.

But, how do we use the tools of Governance, Risk and Compliance to manage the business of government i.e. to reach our objective of a flourishing economy, if there is such continuous, fundamental dissent and lack of political will? The willy-nilly shifting the goal post, depending on who is in the pound seats, means we are not working towards the same objective.

4. GRC in Government

With the advent of the King IV report, good governance, effecting and efficient risk mitigation and maximum compliance are at the centre stage of our accountability framework. Practitioners of governance, risk and compliance must also appreciate that South Africa has a rich ethical and legislative framework for accountability and good governance which should help to realise GRC imperatives. They must consider their fiduciary duties as essential in the success of their organisations, they must be caring, act in good faith, be transparent and show loyalty to the South African taxpayer, and therefore shareholder.

The people at the helms of State Owned Enterprises and Companies must be persons of good standing, with independent minds and they should have the relevant expertise and skills to fulfil the tasks of these organisations. Board members and executives must be committed and should have unquestionable integrity and ethical values. They should respect and obey the rule of law and engage stakeholders comprehensively and transparently. GRC practitioners – both at a level of the organisational boards and the executives – must contribute to the development of relevant strategies and taking correct decisions; they must ensure accountability and introduce and maintain effective management teams.

This approach is lacking in far too many of our State Owned Enterprises and that is why they are always in the media for wrong reasons. There is a failure to internalise the meaning and significance of Governance, Risk and Compliance. Turnover of boards, board chairpersons and officials is an area of concern, as well as inappropriate interference from government and then, of course, perennial corruption. We saw the ugly breakdown of governance at the South African Broadcast Cooperation (SABC) and the conduct of some which could border on criminality.

An example of where GRC in government works, is the Competition Commission’s recent findings on alleged currency manipulation and collusion by many major banks operating in South Africa. The individuals who played these games, showed a shocking lack of patriotism and callousness; because this mess reverberates through South Africa – from top to bottom, left to right. It affects all of us. Not only could this directly affect the individuals on the street, as well as the futures of companies, but such shenanigans affect South Africa’s precarious standing with the ratings agencies.

Therefore, in terms of compliance, the Competition Commission has done courageous work to expose this malfeasance and corruption in the private sector. So, this is a good thing and it begs the question, why does our government not take GRC more seriously? After all, it is the business of government to make sure that South Africa becomes a prime investment destination, where our people flourish in their personal lives and thrive in their jobs.

One of the major stumbling blocks to the proper implementation of GRC in government is that, the very people who are supposed to walk-the-talk, are found (increasingly so) with their hands in the cookie jar. In far too many instances, the people and/or organisations that are supposed to preside over the effective management of government, shirk that responsibility and betray the people of this country; and in particular, the downtrodden masses. As voters, we have a responsibility to take stock of these tendencies, make different choices and exert pressure on government to do the right thing.

We can all agree that GRC is a good tool to eradicate corruption. Each of our ministers, directors’ general, premiers and MECs, mayors and city managers; and in fact, each person in a position of power must become a GRC expert of sorts. We forever hear that there is a limited budget and the Minister of Finance harps on stopping wasteful expenditure, but if we can “save” money by properly implementing GRC in government, there will be enough resources to fund bread-and-butter projects.

5. Conclusion

I have probably articulated some problems with GRC in South Africa, sketched ideals and not proffered a solution that will suit all. But, if we were to take the SABC example, the collapse of the institution is a result of a failure to do things the right way. The fundamental interest of society and the principles of inclusive development were sacrificed at the altar of divergent and divisive interests of some political and social elites.

A socio-political approach towards GRC must espouse high ethical values and standards which must in turn, be the foundation for sound policy development. It requires adoption and implementation that are in line with the purpose of serving the people and ensuring that societal development needs are met.

The success of governance in a risk mitigated environment and maximum compliance is at the core of the what needs to be urgently done in South Africa if the ideals of the National Development Plan are to be realised.

Thank you

2017-06-13T15:11:46+00:00 February 21st, 2017|2017 Archive, Home, Speeches|Comments Off on Socio-political impact on Governance, Risk and Compliance Address by Mr B Holomisa, MP (UDM President) at the ITWeb Governance, Risk and Compliance 2017