Business & Economy

Tuesday, 20 November 2018 09:34

Ethical sentiment among professional South Africans drop sharply following bruising year of corporate scandals

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Survey reveals 1 in 4 believe financial success is more important than doing the right thing - while 25% in public sector say they fear for their lives when reporting wrongdoingJohannesburg, 19 November 2018

Ethics is not prioritised enough in corporate South Africa. And, according to a wide-ranging survey conducted in both the private and public sectors, the country’s leaders are failing us.

These are just some of the findings of the 2018 AEPF Ethical Practices Survey. The annual survey - the first was conducted last year - serves as a barometer and quantitative tool to capture “the perceptions of professionals regarding ethical practices in society, organisations and professional institutions”.

An initiative of the Anti-Intimidation and Ethical Practices Forum (AEPF), the 30-page report reveals how unethical behaviour is perceived by professionals in the governance, auditing, risk management, fraud management and ethical practices domain in South Africa.

The AEPF is a forum of professional bodies and other like-minded organisations formed two years ago following the rising levels of corruption, fraud, ethics failures and lack of corporate governance in the country.

It was established to assist professionals who experience intimidation and whistleblowers keen to expose unethical behaviour in the workplace.

It’s founding members include the Institute of Internal Auditors SA (IIA SA), Corruption Watch, the South African Institute of Chartered Accountants (SAICA), the Institute of Directors Southern Africa, The Ethics Institute, the SA Institute of Professional Accountants (SAIPA), the Association of Certified Fraud Examiners (ACFE) and the Institute of Risk Management SA (IRMSA).

The results of the ethics survey, meanwhile, show a sharp decline in perceptions as compared to the inaugural study.  This year 1900 professionals from across corporate South Africa participated with the largest group working at an executive level (28% compared to 10% in 2017) with the second largest coming from middle management level (21% compared to 19% in 2017).

The majority of the responses were from the private sector while at least 32% who participated work in the banking and financial services sector.

Key findings, meanwhile, include:

* 36% agree that doing the right thing is more important than financial success. In the public sector 23% of the respondents agree compared to 42% in the private sector;

* Leaders in the public sector are perceived as a lot less ethical than those in the private sector. Only 10% of respondents in both the public and private sectors agreed that leaders in the public sector are ethical;* 17% of respondents in the public sector agree that leaders in the private sector are ethical - a significant decline from the 60% in 2017;

* Only 32% of respondents in the private sector agree that leaders in their sector are ethical, representing another sharp decline from 70% the previous year:

* 32% of those in the public sector agree that ethics is a priority in their organisations compared to 43% previously;

* Just 39% agree that their organisations encouraged employees to do the right thing compared to 63% in 2017;* 44% agree that their organisations encourage them to report unethical behavior compared to 59% previously;

* This could be why there is also a decline in the percentage of respondents in both sectors who believe it is their personal duty to report unethical behaviour (84% in the public sector compared to 91% and 89% in the private sector compared to 92% in 2017);

* Professionals in both sectors say they have been intimidated for doing the right thing (26% in the public sector and 17% in the private sector) and that they feared losing their job for doing the right thing (26% in the public sector and 20% in the private sector); and,

* 24% in the public sector and 15% in the private sector say they were threatened for speaking out about unethical behaviour and that they feared for their lives for reporting unethical behaviour (25% in the public sector and 20% in the private sector).

Chair of the AEPF and IIA SA CEO, Dr. Claudelle von Eck, admitted that leaders in the private sector “have taken a substantial fall from grace” in the past year which explains why the respondents “significantly downgraded their perceptions in the ethical nature of their leaders”.

She said, however, that there were some “heartening” data to emanate from the survey.

“Despite the negative sentiment around leaders in the private sector, the perception of ethics remains relatively high, with no significant shifts. Of the respondents in the private sector 78% agree that ethics is a priority in their organisation, 80% agree that talking about ethics is encouraged, 80% agree that people are encouraged to do the right thing and 80% agree that people are encouraged to report unethical behaviour.”

Deputy chair of the AEPF and CEO of the ACFE SA, Jaco De Jager, said the results also revealed that the perception of ethics in professional institutions “remain very high”.

“For example, 83% in the public sector and 87% in the private sector agree that these bodies have ethical leadership - and 86% in the public sector and 88% in the private sector agree that these bodies are ethical. This is the only dimension where both sectors seem to be in agreement in their positive sentiment.

”De Jager adds that in both sectors there seems to be an increase in trust in professional institutions.

“In the public sector 47% agree that they preferred to report unethical behaviour to their professional body and not to their organisation, as compared to 38% in 2017. In the private sector the percentage that agree is 31% compared to 24% in 2017. It must be noted, however, that while this increase in trust in professional bodies is good for their reputation, it does not signal comfort in the leadership in the respondents organisations.

”For the full report visit http://www.aepf.co.za/AEPF_Ethical_Practises_Survey_Results_2018.pdf

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