Nov 30

Corporate South Africa Finding it’s Voice

An article by Ian Kilbride

The power relationship between government and business is shifting perceptibly. The state is failing and the private sector is stepping in and stepping up to provide a raft of basic services demanded by its citizenry. The change in power dynamics has important implications for the conduct of corporate citizenship in South Africa.

Definitional clarity, precision and consensus remain elusive with respect to corporate citizenship. This is variously accounted for. Most fundamentally, the lack of definitional agreement rests on the metaphorical construction of the term itself. Demonstrably, corporations are not citizens. While they carry and adopt the attributes of a legal personae, they lack either natural rights or the co-equal human and social rights enshrined within the constitutional bill of rights. At the most fundamental level, corporations lack political rights as they cannot vote.

A sceptical view of corporate citizenship holds that it makes a virtue of necessity and then turns that virtue to strategic advantage. Another interpretation holds that it is little more than a contemporary re-packaging of corporate social responsibility. For others, corporate citizenship refers to how companies relate to, work with and manage a range of internal and external stakeholders vital to the sustainability of the firm’s operations.

But it is clear that corporate citizenship is no longer synonymous just with doing the right thing through corporate social responsibility programmes, but rather constitutes a far wider and deeper set of policies and engagements with multiple stakeholders. Indeed, corporate citizenship in South Africa cannot be reduced to a singularity, interpretation or definition. Rather, it is a complex, multifarious and layered set of engagements aimed at corporate commercial sustainability and heavily influenced by its operating environment.

When applied to the South African context the concept of corporate citizenship arrogates to the holder a degree of political and social legitimacy that implies the possession of rights, but equally too, responsibility, responsiveness, accountability and national loyalty. This identification and solidarity with a national identify is reinforced by the construction of ‘Proudly South African’ campaigns, leading to corporates frequently prefacing their products, publications and public relations communications with this national branding label. All of these features strengthen corporate reputation, and by so doing, provide a veneer of political protection against the more predatory and avaricious elements of the state.  

Notably, corporate citizenship in the South African increasingly benchmarks itself against global standards, codes, and peer-reviewed best practice. This serves multiple purposes. For example, it provides local corporates with a form of global best practice guide to and measurement of how to conduct ‘good corporate citizenship’. This has both internal utility as a performance benchmark and the external utility of positioning the corporate as a responsible and accountable corporate citizen. Support for, adherence to and excellence in performance against such international soft law and codes of conduct provides valuable local corporate reputational capital, but also underpins efforts at self-regulation.

Yet it is the absence of political engagement that constitutes the weakest and least developed dimension of South African corporate citizenship. This is particularly notable given the progressive shift in the government and business power dynamic. The support and intercession of the private sector in the delivery of basic services such as energy, health, security, education and infrastructure provides it with an exceptional opportunity to exercise its latent political voice.

Engaging in political corporate citizenship does not mean taking to the streets, although it would be instructive for corporate leaders to spend more time on the streets of the CBDs and the residential areas of their employees and workers. Political corporate citizenship need not be shrill and arrogant. A former CEO of the Post Office recently commented that “Government suffers from an inferiority complex and business suffers from a superiority complex.” If this observation is true, then the prospects of collective dialogue to tackle country’s crippling challenges are slim. Consequentially, a government business relationship reset at the narrative, behavioural and responsibility levels is required. This will not be achieved by muted obeisance from the corporate sector, or ‘checking out’ from political engagement altogether. Equally, obsequious corporate diplomacy, overlaid with public relations spin in the face of structural social and economic crises constitutes corporate irresponsibility that undermines the legitimate rights and interests of its key stakeholders.

South Africa’s hard-won constitutional democracy provides multiple entry points for political corporate citizenship. In addition to formal institutional structures such as NEDLAC, corporate South Africa has the opportunity to insert itself fully into the development of green and white papers, socio-economic impact assessments, draft legislation and parliamentary hearings. Business chambers and associative bodies also provide a useful forum for the private sector to exercise its collective political interests, particularly as government has expressed its preference to deal with sectoral bodies rather than individual companies.

Yet all of these structures and forms of engagement are institutionalised and conduct their business behind closed doors. By definition they are exclusive and can be exclusory. For a maturing democracy we still see and hear precious little from corporate figures whose leadership qualities fail at the point of speaking truth to political power. Yet the emerging truth of the new state-business dynamic in South Africa is that the private sector does have the power to exercise its political corporate citizenship openly, honestly, clearly and without fear of retribution. It merely needs to recognise and exercise it.

Ian Kilbride is Chairman of