Corruption thrives in the dark | Fin24
 
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Corruption thrives in the dark

Jul 29 2018 17:44

It is a widespread belief that corruption thrives in non-transparent environments. But what constitutes a transparent environment?

Being transparent is the willingness to be open and share explicit information. In business, this means sharing information with the public on how money is made, lost and spent. Transparency itself is a reflection of honest actions and good management. It is built on intimacy, from which trust grows.

To the most relevant of leaders, transparency is a form of control and accountability.

Transparency is beneficial as it enables feedback loops and includes individuals, teams and organisations. It can be good organisational strategy; if an organisation is open, they must communicate this. When an organisation communicates openly and frequently with the media and public, there are few vacuums left to fill with misinformation.

At work, most of us are under some form of scrutiny. Yet increasing transparency decreases everyone’s risk, while enabling value creation. And transparency enables workspace awareness.

Documented

Transparency is also the consequence of well-oriented and complete policies. South African institutions, like its heavily regulated banking industry, have been forced to be more and more transparent, especially around banking fees.

As a customer, you can check and compare bank fees and make your own decisions. Banks in South Africa are also controlled by a slew of Codes and Acts, chief among them the Financial Intelligence Centre Act, Code of Banking Practice, National Credit Act and the Consumer Protection Act.

Other industries, such as medical aids, are similarly regulated. In fact, the Medical Schemes Amendment Bill will soon be published in the government gazette for public comment. The Advertising Standards Authority furthermore provides a prompt, accessible and cost-efficient mechanism to ensure that advertising is legal, decent, honest and truthful.

Governments around the world are also taking action. Kenya, for example, recently enacted legislation which compels all government departments in that country to publish information pertaining to the awarding of tenders, the amounts of the tenders, as well as the names of the directors in the companies involved in the transactions.

Need to know

What is transparency not? Transparency is not the intentional or unintentional withholding of information. It is never vague or ambiguous and it does not obfuscate. Within companies, transparency is not dictated from the top down. Instead, it is a two-way street.

Secrecy is the antonym of transparency – a way to hide mistakes – and often is intended to conceal bad management. Most crisis communication cases have a secret or lie at the bottom of them. While people often forgive mistakes, they do not forgive deceit, deceitfulness, dishonesty, lying, mendaciousness, mendacity or untruthfulness.

Furthermore, secrecy increases the likelihood of confidential information being leaked. Consider the likes of WikiLeaks, the Panama Papers or even the Ashley Madison hack.

Taxpayers want and need to know how their money is being used. The real challenge for the public and private sectors is finding a balance between security and privacy because, sometimes, complete transparency is not always possible, nor is it necessarily desirable.

According to Transparency International’s Corruption Perception Index of 2016, there is a distinct connection between corruption and inequality. When traditional politicians fail to tackle corruption, people become cynical.

When people are cynical, they increasingly turn to populism and populist leaders, who promise to break the cycle of corruption and privilege.

Now, consider the political situation we find in South Africa today and the inequalities that exist in our society.

Safeguards

A democratic country, South Africa placed 71st out of 180 countries in Transparency International’s 2017 Corruption Perceptions Index and, apart from active civil society groups and a free press, is further policed by a Public Protector, Corruption Watch and similar corruption-busting NGOs.

In addition, South Africa’s efforts to deepen transparency in its budget processes have been recognised internationally, jointly winning the 2017 Open Budget Index (OBI) survey with New Zealand.

The Electronic Tolling Company (ETC), the company that provides the technology and collection services on the Gauteng improved freeways is another organisation taking transparency to heart. With e-tolls obviously being a hot and contentious issue, the company has opted for an open-door policy. 

“Our doors are open. We are happy to provide information on e-tolling and our business model, information about where the money goes or answer any question about the project,” says Coenie Vermaak, chief project officer of the Gauteng Open Road Tolling (GORT) Project at the ETC.

But talk is cheap, and so the ETC decided to publish an infographic to outline how e-tolls are collected on behalf of the government. This is in direct response to what the public have been asking for: greater transparency about where the e-toll money goes.

“Contradictory to what many people believe, ETC owner Kapsch has not taken vast sums of money out of the country,” explains Vermaak. “In fact, it has invested close to R800 million into South Africa. This money will likely be written off once the GORT contract has been finalised.”

Vermaak adds that ETC’s books are audited by PwC (PricewaterhouseCoopers) who are also the company's auditors. In addition, the company is subject to SANRAL's auditors as well as to the scrutiny of the Auditor General on a permanent basis.

“Everything we do is audited, verified, validated and checked, inside-out,” Vermaak says. “We have adopted transparency as the cornerstone of our governance policy – without it, it would be impossible for South African’s to hold organisations and governments to account.”

Enshrined

The South African Constitution, recognised as being one of the best in the world, stipulates that the South African public and media have the right to access information. According to the Promotion of Access to Information Act:

"One of the basic values and principles governing public administration is transparency. And the Constitution demands that transparency ‘must be fostered by providing the public with timely, accessible and accurate information.’ […]"

It is often said that we live in an information age, from which people and companies cannot hide. This phenomenon has led to growing consumer intelligence and better informed citizens, all of whom compel companies and governments to be more transparent.

Most would agree that social media has played a massive role in the information age. It has become a useful tool because, as human beings, we overwhelmingly trust the recommendations we get from our friends and family since we expect them to be more transparent.

Even if that trust fails, there are backups in the form of journalists like Wendy Knowler – arguably South Africa’s leading consumer commentator – and a professional that has built a successful career tackling consumer rights issues, all the while being respected by corporates for her fair, accurate and balanced reporting.

There are also pockets of South African excellence as far as corporate transparency goes. Examples include Clover, Pick ‘n Pay and FNB, which continue to excel in the Reputation Institute of South Africa’s annual corporate reputation study, which lists and ranks South Africa’s most reputable companies.

David North, Pick 'n Pay's group executive for strategy and corporate affairs, says reputational strength stems from integrity, which evolves into loyalty. "When organisations act with integrity, the result is likely to be a good reputation."

Any company’s reputation is important, because it drives supportive behaviour and, through the support of its stakeholders, allows it to achieve results. For consumers, it's all about trust, which has to be earned – think verified Twitter accounts and SABS-approved certifications.

Virginia Magapatona, FNB Corporate Affairs Executive adds to this. "As economic conditions tighten, customers place an even higher premium on trust and the ability of a brand to exceed their needs."

Magapatona says research has shown that companies can also enhance trust by developing new services that develop this trust and add value for customers on a consistent basis.

Tristan Wiggill is a writer, columnist, photographer and editor. He is also the owner of Road Transport News

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fnb  |  pick 'n pay  |  clover  |  pwc  |  corruption
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