Nedbank Chief Kicks Over A Hornet’s Nest

Nedbank Chief Kicks Over A Hornet’s Nest

Reuel Khoza (pictured), the chairman of one of South Africa’s big four banks, Nedbank has unleashed a storm of controversy after slamming the conduct of the government in the bank’s annual report. At issue is the question of how far business should, or should not, involve itself in national governance.

IT WAS ONE OF THOSE CLASSIC QUESTIONS everyone wanted answers to but didn’t know who to ask. Resolution of a kind came in an unexpected free-for-all between a top banker and the government.

The question: what is the relationship between bank top management and the government? Obviously Reuel Khoza, the chairman of Nedbank, one of South Africa’s big four, was not speaking on behalf of the banking community, or  not even for his own organisation but making a purely personal observation, when he noted in  his bank’s 2012 Annual Report that “South Africa is widely recognised for its liberal and enlightened constitution, yet we observe the emergence of a strange breed of leaders who are determined to undermine the rule of law and override the constitution.

“Our political leadership’s moral quotient is degenerating and we are fast losing the checks and balances that are necessary to prevent a recurrence of the past. This is not the accountable democracy for which generations suffered and fought.”

It was powerful stuff and it stretched the proposition of South African free speech to breaking point. The storm that followed all but shredded that it existed, or proved once and for all that it surely did. Each of the antagonists stressed that South Africa is a country that guarantees freedom of speech, and that each had the right to have his say. The African National Congress (ANC), senior partner in the governing tripartite alliance with the Communist Party and labour conglomerate Cosatu, bluntly warned Khoza not to deflect attention from the failures of business by talking about political leadership. To show it was serious, it eschewed the media announcement and rolled out ANC secretary-general Gwede Mantashe instead. “As the ANC, we may have views about business leadership, some of these views may be positive or negative, we will never use any platform to castigate them publicly,” wrote Mantashe in the New Age newspaper. “Bad mouthing the country affects its competitiveness globally and this can best be defined as economic suicide of the worst sort.”

The storm also tested the resilience of the business community. Most drew the curtain of political correctness and withdrew from contention. Of the allies that appeared in Khoza’s corner was the Chamber of Mines, noting in a statement that the business community has every right to make inputs to public debates that advance the interests of the country. “The chamber’s office-bearers make clear the view that South Africa’s business leaders should not only seek to be involved in debates on national and political issues, but should be actively encouraged to do so,” the statement continues adding that it is concerned by the reaction of ANC leaders to Khoza’s observations, especially the remark that business should stay out of politics. The chamber said that when political leaders had concerns with what business leaders were doing or saying, these should be resolved through private engagements, rather than open hostility.

“We have a great country to build while confronted with the three massive challenges of alleviating poverty, inequality and unemployment. In dealing with these issues as a collective, criticism of the kind expressed by Dr Reuel Khoza is an inevitable component of the development of our young democracy.”

Ideological third force?

The ANC mustered some contenders of its own. Blade Nzimande, general secretary of the Communist Party and the alliance government’s higher Education Minister  branded Khoza as being part of an “ideological third force” that fears black rule. To his mind, Khoza was “part of an ideological third force decrying the threats to our constitution”.

Mantashe maintains that any business leader who behaves like an analyst is in the wrong profession. “Any view expressed in the Nedbank annual report is based, at best, on the sympathy one has with those who throw stones at the ANC.”
Most wounded by Khoza’s remarks was the Black Business Council, “an admirer of Dr Khoza, whom we consider a true patriot, a pioneering black corporate executive and one of South Africa’s most eminent business leaders”.

In a statement issued after it had met with Khoza, the council said “he has indisputable credentials as a catalyst and agent for positive change in society. Hence we have deep appreciation and support for his contention that business leaders have a duty to initiate and participate in any public discourse that seeks to strengthen our country’s political economy”. It added, however, that it was “not convinced of the wisdom of choosing to use the medium of the Nedbank annual report, a publicly ’listed company, to launch a full frontal assault on our political leadership, in government or elsewhere, especially using sophisticated, yet uncharacteristically uncouth corporate language.

“The Black Business Council laments and frowns upon the death of decorum in engagements among leaders in our society, and appeals for a measured approach to public conversations, debates that are free of profanities in assertions and counter assertions.”

It went on to say it had a lot of confidence in the quality of the leadership in government, “yet we do not agree with them in everything they do. For example, we genuinely believe the government can do significantly more to improve the overall climate for improved and sustainable business confidence in South Africa and to alter, once and for all, the entrenched colonial and apartheid patterns of ownership and management of the South African economy.

“That notwithstanding, in our numerous and regular engagements with various arms of government, the Black Business Council has found a leadership that is morally committed to a vision of a better life for all, which it hopes to achieve through transforming, developing and growing the economy, fighting poverty, reducing inequality and creating employment, whilst fighting corruption.”

Khoza’s response following a week of verbal assaults was unperturbed and measured, noting that debate heightened awareness of society’s needs. “We live in a wonderful country with a vibrant democracy,” he said. “I firmly believe that leadership in the public and private sectors working constructively together can make a positive contribution. Part of my life’s mission as a citizen and a business leader is, in a small way, to contribute to the upliftment [sic] of South Africa and help achieve a better life for all.”

After the stand-off, Mantashe’s office announced a rapprochement after a “fruitful” meeting between Khoza and the ANC secretary-general. “The way has been paved for better understanding. The meeting resolved what was perceived as a stand-off and addressed a variety of issues related to governance and business leadership.” 

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Written by African Business Magazine

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