A year after King IV(tm) and our buckets (still) have holes in them!!

I wrote a number of years ago about one of what seems to have become standard feature of the South African economy – the leaking bucket of the state sector. At that stage there was a lot of ‘noise’ about improving the situation – and yet, things have got significantly worse.
We have gone from R 30 Billion wastage to over R 50 Billion in wasteful expenditure.
That is a 66% increase on the previous figure – how can things have continued to get bad so quickly?
The narrative of ‘State Capture’ and the result on a number of large state entities (including Eskom, Transnet, Denel, Prasa – to name a few) continues to sweep through the South African, and international, headlines. Yet this ‘leakage’ seems to permeate almost all of the South African Public Sector.
And this at the same time that South Africa is at the forefront of some of the most significant thinking in governance in the shape of the King IV Code of Corporate Governance(tm) launched a year ago today.
One of the significant inclusions (or extensions) of King IV(tm) was the inclusion of a number of ‘Sector Supplements’ aimed at answering the question – ‘how do we apply these principles in a specific sector?’ and at ‘allowing certain parties to use the excuse (used with previous King Codes) ‘that doesn’t apply to us!’
Having had the privilege of working extensively with both the King III(tm) and King IV(tm) Codes across a range of Public Sector Entities both in South Africa and a number of other African Countries I do think that some of the major challenges in implementing governance that is accountable, responsible, fair and transparent include;
  • The challenge of enabling legislation (an issue addressed in King IV(tm)) and the problem of separating the concept of ‘appointment’ and ‘control’. I continually emphasise that these are two very different things – appointment does not mean, either directly or indirectly (to coin a phrase from the SA Companies Act), or even imply, control. As soon as they are understood to mean the same thing we revert to very unhelpful concepts including ‘representative directors’, ‘political (and often personal) interference’ and an ongoing debate about exactly who the directors are acting for (or on behalf of);
  • A strategic dysfunction. by this I mean that directors often see themselves as ‘delivering the mandate of…’ as opposed to identifying more clearly what the real purpose and promise of the entity is all about (some or other aspect of actual service delivery) and using strategic foresight to envision and enable movement and momentum. A good understanding of what strategy actually means (and looks like) is severely lacking in the public sector – it is too often seen simply as a projection of the present, more of the same planning and budgeting. And as we all know (and keep hearing) ‘if you keep doing what you are doing, you will simply get more of what you are getting!’ Sounds like insanity. Hence the increase from R 30 Billion wastage to R 50 Billion! .
  • A very shallow understanding of Values and Ethics. These are often equated to a group of very nice sounding but generic and meaningless words and phrases written on websites and reception walls but not embedded and infused throughout the organisation. The critical question to ask is ‘what do these actually look like here?’. The net result is an organisational culture that does not intentionally cultivate a coherent set of deep and meaningful, empowering and enabling virtues and behaviours;
  • Policy Frameworks that don’t fully spell out the 4-flows of Accountability, Responsibility, Authority and Disclosure – the critical enablers of effective performance and control in each organisation
PS these are traps that the Private Sector also regularly fails to avoid.
I am hopeful – there are better ways to do this! We just need to start to re-think and re-imagine what the role of business, the public and private sectors, are actually all about.
Let’s start to do this together.

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