Only ethical leadership prevents fraud and corruption
This is the viewpoint with which Standard Bank’s Namibia’s Chief Executive Vetumbuavi Mungunda describes the importance of good governance in society.
“We need to encourage and promote ethical leadership underpinned by a strong moral code. Good governance is fundamentally about integrity, honesty, trustworthiness, diligence, transparency, competence, inclusiveness and fairness. I sincerely believe that putting up governance structures and processes which are manned by unethical or incompetent leaders is a futile exercise that costs money and waste resources,” said Mungunda.
He adds that the implementation of good governance highly depends on the hearts and minds of people with integrity. “As Mervyn King himself pointed out, ‘Trying to legislate for corporate governance is like trying to legislate for good neighbourliness.’ Values are either inherent within people or they are not.” Mungunda further states that there is a need to realise that structures, policies and procedures achieve nothing if societal or institutional morality and integrity are just words and if the values and ethics of the leaders are lacking.
Highlighting the importance of integrity, Mungunda pointed out that the most important characteristic for a leader of an institution, government or company is integrity saying “people with integrity will ultimately make the right decision on behalf of an institution irrespective of the consequences or personal interests and that is what needs to be promoted and encouraged more in our society.”
In addition, regulators are instrumental in administering these increasingly demanding requirements. “We need to see significant improvements in the capacity of the legal and justice sectors, there is a need for them to be able to understand, investigate and prosecute complex fraud incidences and a need for more ‘teeth’ to be able to bring transgressors demonstrably to book. Failure to enforce legislation with appropriate penalties, coupled with seemingly successful circumvention of rules and regulations will seriously undermine any attempt to complement good governance,” explains Mungunda.
He elaborates that “even if our legal and justice sectors were resourced to investigate and prosecute large complex fraud or corruption cases, it would not be a solution to our quest to fight fraud in the absence of good ethics and values in society. The absence of a strong moral code will mean that the incidents of fraud and corruption will continue but with more people in jail.”
There needs to be a clear paradigm shift of emphasis from structures and processes to values and morality as the main pillars of good governance in society. “How much time is spent by our leaders or appointing authorities on assessing and evaluating the value system, moral fibre or the culture of our society, institutions or appointees? Have we as society devised mechanisms to evaluate our leaders’ alignment with and living of the values of the institution or broader society?”
In conclusion, Mungunda pointed out that the essence of good governance is quite basic, considering that it is fundamentally about integrity, honesty, trustworthiness, diligence, accountability and responsibility or fiduciary duty. He says “These basic values are age old and near universal. They have always been at the very core of good governance, be it in corporations, governments of informal traditional organisations. Let’s put less emphasis on structures and processes and more emphasis on the most effective of them all – ethical principles and strong moral code in the whole of our society.”