When I heard about the troublesome First National Bank advert causing a stir with the political bigwigs I was on the Lyon TCL tramway, on my way home from a rather unpleasant encounter with French bureaucracy. I became so excited I was literally pacing up and down, hoping to use my superpowers to command the conductor to skip all the prochains arrêts! (next stops).
Let me explain my excitement. I am a law graduate who now studies international business law. My current studies are mostly interdisciplinary, focusing primarily on the interaction between law, business, economics and politics. The most exciting of these interdisciplinary subjects is business ethics. Business ethics questions the ethical conduct of business and moral responsibility (if any) of a corporation. Business ethics is interesting because it presents problems to which there is no legal formula.
The first thought that crossed my mind was “how incredibly stupid!” For me it was unfathomable that a publicly traded corporation — let alone a bank — would publicly call out government. Firstly banks operate a business that has a huge risk of regulation. Thus irrespective of the rhetoric about free speech, banks want to befriend government. Any change in “policy thinking” could see more regulation on the movement of money, on credit and even executive salaries.
It would be even dumber for a South African bank to openly challenge the ANC-led government, remembering the government that just saved banks from the wrath of Julius Malema and his angry youths.
FNB has no interest in aligning itself politically, considering that a number of ANC loyalists bank with FNB. The grapevine even says that the ANC membership account is with FNB.
FNB’s decision made no business sense.
There was also the question of hypocrisy considering the history of FNB. FNB was founded in 1838, more than a century before apartheid. There have been numerous allegations that South African banks were in bed with the apartheid government. Moreover there is no recorded instance — at least in my knowledge — where FNB bravely called out the National Party government. Why the change of tune I thought.
Lastly the financial services sector is not the most likely moral conductor, considering its primary role in creating the 2008 financial crisis. So I was very excited to see FNB, our own bank, leading the revolution against the morally-tainted financial services sector. I was so excited I actually downloaded the advert on my mobile.
The advert was mildly disappointing. While the young lady’s speech is moving, it was nothing like the description in the SACP’s statement or Jackson Mthembu’s rant. There are no angry mercenary children, no call to Pretoria Square, no books are thrown at Angie Motshekga’s wax statue. Damn it, we missed the Rainbow Nation Spring yet again! (Joke, not treason.)
So how did the ads manage to tickle the ANC’s studio?
To be honest with you I haven’t a clue what ticked off the ruling party. It’s either the ANC misunderstood the advert or a bunch of hormone-agitated 13 year olds are responsible for whispering things into Mthembu’s ear.
The said truth is that the ANC’s reaction decimated a real opportunity for government to engage business publicly.
An unsolved conundrum of business ethics concerns the social responsibility of businesses, the question being whether businesses should concern themselves with anything other than raking profits. Economist Milton Friedman is the most popular proponent of the assertion that the moral responsibility of a businessman is making profit. He argued that it is totalitarian to insist that managers should use shareholders property for social purposes. Friedman argued in the 1970s that: “In each of these cases, the corporate executive would be spending someone else’s money for a general social interest. Insofar as his actions in accord with his ‘social responsibility’ reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employees, he is spending their money.”
This view is changing, however slowly. Business is getting involved in government’s developmental goals. In his 2012 budget speech Finance Minister Pravin Gordhan said: “Both the National Development Plan and the New Growth Path recognise that to compete in the global economy requires flexibility, innovation and leadership, in government and the private sector.”
It is thus surprising that the ANC will publicly chastise a bank for engaging it on social issues. Not to say that FNB was being sincere but even if the ANC imagined that the speeches were targeted attacks by mercenaries dressed in school uniforms, there were far better calculated responses.
For example, an ANC that is really serious about development would have commended FNB on its initiative and called on FNB to show its commitment by pledging a portion (say 20%) of its annual turnover to fighting poverty. We would be having a different debate!
The ANC’s own structure is crumbling but the ground on which the ANC stands holds fast. The ANC is growing paranoid and the paranoia is eating the people’s movement from within.
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