Corruption - A social disease (Part 138): The role of corporates and oversight bodies in tackling corruption
Johan Coetzee - Corruption is an add-on and/or inflation that increases the prices of consumer goods and services and reduces profit.
Business compensate for such add-on cost by increasing prices. All consumers in Namibia pay for corruption and the poor in comparison with the affluent in terms of affordability pay the most. The business sector that can afford corruption the least of all sectors are Small and Medium Enterprises (SMEs) that cannot absorb public service inefficiencies compared to large corporates.
Partially due to reluctance of the South African government to investigate corrupt leaders, AgriForum is initiating civil and criminal cases against corrupt individuals. Against the background of the severe impact of corruption on the business environment in deterring investment, the dire current economic situation, reduced government resources and mediocre political commitment to reduce corruption, the private sector, civil organisations and professional bodies in Namibia need to increase public awareness about corruption and initiate civil and criminal cases to investigate corruption.
CORPORATE GOVERNANCE
The NamCode is Namibia’s version of King III and IV. The NamCode is not well known/and or not applied in Namibia as it should be. The magnitude of corporate corruption such as State Owned Enterprises (SOEs) illustrates the substandard level of corporate governance.
Areas for major improvement by boards of private companies and public entities, include the following.
The private sector should create an awareness programme to market the voluntary implementation of the NamCode. Since the Namibia Stock Exchange and Deloitte & Touche Namibia were the initiators of developing the NamCode (funded by First National Bank of Namibia), they should take the lead in this process.
Boards of private companies and public entities should improve their corporate governance and reduce the level, frequency and magnitude, and/or monetary value, of corruption in Namibia. It is recommended that the NamCode be amended in order to make provision for changes in King IV, e.g. from the "apply or explain" approach to "apply and explain".
LIABILITY
Board members should receive training on their fiduciary powers and skills training in areas such as interpreting financial statements, risk management and liabilities. Board members are individually liable for financial losses incurred in terms of the Companies Act.
Given the gross negligence of board members in general in Namibia, it is high time that board members are held liable so that the level of governance improve and corruption is reduced. Such training should be measurable in terms of outcomes and board members’ performance agreements and appraisal to enable a turnaround in the level of governance.
Deloitte & Touche’ Namibia Surveys of Corporate Governance should in future include questions to board members about donations, gifts and entertainment offered to them, as well as questions about declaration of interests, recording of interests at board meetings and monitoring of the execution of such declarations.
ASSISTING THE ACC
Oversight bodies consisting of members of the public could cooperate and assist the ACC in their awareness of corruption and prevention programme.
Based on the best practice example of Singapore, the private sector and interest groups should request the ACC for monthly meetings between the ACC and oversight bodies to report on the ACC’s progress, e.g. on the number of cases reported, cases pending, cases referred to the Prosecutor General’s Office and cases finalised.
Since the Anti-Corruption Act is to be reviewed starting in June 2018 it is an appropriate opportunity to amend the Act so that monthly reporting can be legalised as part of the ACC’s accountability towards the public (Shipena).
THE CHALLENGE
Corporates and oversight bodies have a critical role to play and an undeniable accountability in reducing corruption in the public-private sector interface. The private sector and specific corporates should refuse to pay bribes, expose corrupt public servants and corrupt public transactions.
Corporates should start putting their money where their mouth is if they are equally serious about reducing corruption as about supporting sport teams with millions of Namibian dollars.
I challenge all corporates to report corruption to the media and the ACC. Extensive protection is provided under Article 52, Section 4 of the ACC Act.
References
Coetzee, J.J. 2018. The role of the private sector in tackling corruption. Article commissioned and published by the Institute of Public Policy Research (IPPR), Windhoek: The Open Society Initiative of Southern Africa (OSISA).
Shipena, H. 2018. Permanent Secretary of the ACC, a panel member of the study commissioned by the IPPR, launched 9 May Windhoek.
[email protected]
Business compensate for such add-on cost by increasing prices. All consumers in Namibia pay for corruption and the poor in comparison with the affluent in terms of affordability pay the most. The business sector that can afford corruption the least of all sectors are Small and Medium Enterprises (SMEs) that cannot absorb public service inefficiencies compared to large corporates.
Partially due to reluctance of the South African government to investigate corrupt leaders, AgriForum is initiating civil and criminal cases against corrupt individuals. Against the background of the severe impact of corruption on the business environment in deterring investment, the dire current economic situation, reduced government resources and mediocre political commitment to reduce corruption, the private sector, civil organisations and professional bodies in Namibia need to increase public awareness about corruption and initiate civil and criminal cases to investigate corruption.
CORPORATE GOVERNANCE
The NamCode is Namibia’s version of King III and IV. The NamCode is not well known/and or not applied in Namibia as it should be. The magnitude of corporate corruption such as State Owned Enterprises (SOEs) illustrates the substandard level of corporate governance.
Areas for major improvement by boards of private companies and public entities, include the following.
The private sector should create an awareness programme to market the voluntary implementation of the NamCode. Since the Namibia Stock Exchange and Deloitte & Touche Namibia were the initiators of developing the NamCode (funded by First National Bank of Namibia), they should take the lead in this process.
Boards of private companies and public entities should improve their corporate governance and reduce the level, frequency and magnitude, and/or monetary value, of corruption in Namibia. It is recommended that the NamCode be amended in order to make provision for changes in King IV, e.g. from the "apply or explain" approach to "apply and explain".
LIABILITY
Board members should receive training on their fiduciary powers and skills training in areas such as interpreting financial statements, risk management and liabilities. Board members are individually liable for financial losses incurred in terms of the Companies Act.
Given the gross negligence of board members in general in Namibia, it is high time that board members are held liable so that the level of governance improve and corruption is reduced. Such training should be measurable in terms of outcomes and board members’ performance agreements and appraisal to enable a turnaround in the level of governance.
Deloitte & Touche’ Namibia Surveys of Corporate Governance should in future include questions to board members about donations, gifts and entertainment offered to them, as well as questions about declaration of interests, recording of interests at board meetings and monitoring of the execution of such declarations.
ASSISTING THE ACC
Oversight bodies consisting of members of the public could cooperate and assist the ACC in their awareness of corruption and prevention programme.
Based on the best practice example of Singapore, the private sector and interest groups should request the ACC for monthly meetings between the ACC and oversight bodies to report on the ACC’s progress, e.g. on the number of cases reported, cases pending, cases referred to the Prosecutor General’s Office and cases finalised.
Since the Anti-Corruption Act is to be reviewed starting in June 2018 it is an appropriate opportunity to amend the Act so that monthly reporting can be legalised as part of the ACC’s accountability towards the public (Shipena).
THE CHALLENGE
Corporates and oversight bodies have a critical role to play and an undeniable accountability in reducing corruption in the public-private sector interface. The private sector and specific corporates should refuse to pay bribes, expose corrupt public servants and corrupt public transactions.
Corporates should start putting their money where their mouth is if they are equally serious about reducing corruption as about supporting sport teams with millions of Namibian dollars.
I challenge all corporates to report corruption to the media and the ACC. Extensive protection is provided under Article 52, Section 4 of the ACC Act.
References
Coetzee, J.J. 2018. The role of the private sector in tackling corruption. Article commissioned and published by the Institute of Public Policy Research (IPPR), Windhoek: The Open Society Initiative of Southern Africa (OSISA).
Shipena, H. 2018. Permanent Secretary of the ACC, a panel member of the study commissioned by the IPPR, launched 9 May Windhoek.
[email protected]
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