A tiger is chasing an ostrich around the vegetable garden - Business Day, 7th August 2012.

Frans Cronje explains why we hear so little in public from business organisations such as Business Leadership SA (BLSA).

David Gleason (From tip-toeing to stepping on toes, August 3) asks why we hear so little in public from organisations such as Business Leadership South Africa.

The South African Institute of Race Relations has decades of policy experience on South Africa, much of that spent briefing South African business leaders on a range of social, economic and political matters.

Out of that experience we think there are four answers to the question. These are set out below.

Some companies are making a very important contribution to policy formulation in South Africa. These realise that there is a long-term business case to be made for investing resources into policy advocacy and research in order to secure an improved future business environment. They are a tiny but important minority of the broader business community and many of them were engaged in this role long before 1994. Their efforts helped to defeat apartheid, and today benefit members of the broader business community, who are in a sense free-riders enjoying the benefits of improved policy but contributing no resources to securing improvements.

Gleason’s question is therefore generally valid. It is also an important question considering that our country is confronting levels of poverty and unemployment that are major risks to businesses invested in the country. It should therefore be obvious from the standpoint of self-interest alone that it is necessary for business leaders to play an active role in promoting policy alternatives.

Why, then, do so few of them do this?

It is true that there was a time when business’s general reluctance to speak publicly was driven mainly by fear. This was especially true during Thabo Mbeki’s tenure, which was characterised by incidents such as his 2004 attack on then Anglo American CEO Tony Trahar and his weekly ANC Today column via which he penned rambling attacks against any group voicing even the mildest concern at the state of the country.

However, today the era of denial is thankfully behind us. While this year has seen a tense confrontation between Nedbank chairman Reuel Khoza and the African National Congress (ANC) over his criticism of its leadership, that should not be detract from the point that President Jacob Zuma’s administration has heralded a far more open approach than the one preferred by Mbeki.

Cabinet ministers are now quite willing to admit to problems in their departments. Hence, we have the police now admitting to the problem of corruption in its ranks. The health minister is glad to agree that the quality of services in many public hospitals is not good enough. It is a widely held view in the government that our unemployment rate and education system are in crisis.

The critical point is that, in being willing to admit to these problems, the government has taken the first steps towards resolving them and has, by extension, created a new space for the business community to find its voice. Zuma deserves more public credit for this than he has received. Oddly, despite this window of opportunity, business remains slow to take up the challenge. In our experience four things explain this.

The first is latent fear, which is a hangover from the Mbeki era and the white nationalist era. These companies believe it is simply too dangerous to say anything in case the government acts against them. Like ostriches, they stick their heads in the sand and hope for the best. While that may have been true in our past, it is less so today, although there is still much sensitivity to particularly cutting criticism. However, that many in the government are willing to admit to problems suggests that reasoned and informed commentary from corporate leaders may be well received.

The second is that many companies wrongly regard the ANC as a bunch of wholly incompetent ideologues too irrational to be confronted with honest opinions.

These companies choose to say nothing because they really believe that no good can come of it. As one prominent CEO put it to me a few years ago: "How long do we have before they destroy everything?" This kind of attitude is a great pity because many good people in the ANC and the public service would welcome corporate opinions in order to bolster their own efforts at advocating for policy reform.

The third is arrogance. "We are very well connected and negotiate directly with the ANC," I have been told on many occasions. We are told that the company in question has an ANC "insider" on its board. These companies actually believe they are in control of the tiger they are riding. These companies need to realise that there are now more people who choose not to vote than those who vote for the ANC, so having the ANC onside, which I doubt they really have, is not going to be an effective insurance policy.

The fourth part of the explanation is indifference. Fairly often we will see a corporation, often a very big one, whose executives explain to us that they are not really interested in what some of them euphemistically call "this social and political stuff". We let them know that the "stuff" they speak of includes a 50% youth unemployment rate, a 50% school dropout rate and a 50% poverty rate for black Africans against 1% for whites. We therefore suggest that they take an interest in this "stuff" before it starts to take an interest in them — as we already see in calls to nationalise bits and pieces of the economy while subjecting others to increasingly draconian regulation.

However, even faced with such a warning, we will often still be told that they have a corporate social investment division and that we are welcome to talk to them.

In a recent case, despite our urging to the contrary, a retailer informed us that its policy on the "social and political stuff" was to fund vegetable-gardening projects and the like and that this would not change.

The answer to Gleason’s important question, therefore, has four parts; some companies are too afraid to have a public opinion; others are too ignorant to realise they have allies in the government who need their support; others are riding tigers; while yet others are planting vegetable gardens literally in the expectation that, with cabbages and turnips, they will secure their business future in South Africa.

This is a pitiful picture. It is surely possible to do better.

(First published on the Business Day website.)

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