It was an eventful rainy Thursday afternoon. Workers left their desks to watch the action through their office windows. It was one of the many marches against state capture. On this day, civil society organizations were picketing outside the office of global consultancy McKinsey, right opposite the FORBES AFRICA headquarters in Sandton, South Africa.
McKinsey is one of the many companies, in the country, implicated in alleged corrupt dealings between state-owned power utility Eskom and consultancy firm Trillian. McKinsey and Trillian stood to earn more than $490 million from Eskom.
It has been a year of drama in corporate South Africa. As strange as it may sound, a lot of South Africa’s protests, like this, have one family as the common cause.
Weak-kneed politicians allegedly allowed members of the Indian-born Gupta family to wield undue influence. This influence has gone from meddling with the state’s top jobs to conniving with private and public companies to act in their favor.
Another company in hot water is Bell Pottinger, a British public-relations firm connected to the Guptas by a $130,000-a-month contract. It was stripped of its membership in the Public Relations and Communications Association (PRCA) in the UK, after it was found that the PR agency deliberately fanned racial tensions, with creations like ‘white monopoly capital’, in South Africa, in favor of Zuma, while it worked for the Gupta-owned Oakbay Capital.
“We took this decision because we were not satisfied by the explanations given. We have never passed down such a damning indictment,” says Nicholas Dunn-McAfee, Head of Public Affairs, Policy and Research at PRCA.
It gets worse.
For years KPMG South Africa has said it stands for integrity. Instead, the tax, advisory and auditing firm now stands alleged of giving advice so that money can be taken to Dubai to avoid tax payments. They also turned a blind eye to several conflicts of interest while auditing 36 Gupta-linked companies and compiled the so-called South African Revenue Services (SARS) rogue spy unit report which was used as part of the smear campaign against former Finance Minister, Pravin Gordhan.
There are consequences.
For KPMG, for example, pressure has been piling. The firm withdrew all its findings in the ‘rogue unit’ report; senior executives, including CEO Trevor Hoole, resigned; and it has been dumped by major clients, among them, Sasfin Bank, Sygnia Asset Management, the energy investment company Hulisani, and the University of the Witwatersrand.
Like the protesters in Sandton, Magda Wierzycka, Chief Executive Officer at Sygnia Group, an asset management company, says all involved should be held accountable, stripped of their licenses, fined and even jailed.
“There are no excuses. They did what they did for money. They were not ignorant of what they were doing,” she says.
Opposition political parties, rights groups and private citizens are playing their part to make sure unethical companies are punished. The problem is corporate misgovernance affects the whole country.
South Africa was downgraded to junk status and went into a recession. At the time of writing this article, $1 was equivalent to R14.16 at its worst, it went to about R17 to the dollar. It means business confidence is at an all-time low.
“Businesses are feeling the impact of low investor confidence, weakening exchange rates and high fiscal uncertainty,” says Alastair Macduff, Chairman and Chief Executive Officer of the Turnaround Management Association Southern Africa.
“Restoring investor, business and consumer confidence will require a concerted effort to address these pressing issues – and address them in the best interests of the country as a whole,” he says.
“In a funny way, what has happened to KPMG and McKinsey is actually very positive… Positive in terms of waking corporate South Africa to what is happening and to the fact that they can no longer sit on the fence and stay silent,” she says.
According to Wierzycka, South Africa’s corporate sector is suffering from a moral crisis.
“The dilemma is, do you change providers based on the fact of they are implicated in state capture even when it’s inconvenient to do so?”
Wierzycka has lived it. She offered Bianca Goodson, former Trillian CEO turned whistle-blower, a job. This after Goodson’s new employer, Sage, accepted her resignation after she told them she was blowing the whistle on her previous employer. Goodson provided documented evidence that the Gupta-linked firm swindled hundreds of millions from state-owned enterprises Transnet and Eskom. Wierzycka called Goodson, and all whistle-blowers, heroes.
“When I heard what Sage did, I was actually breathless. The true heroes of the story of South Africa are the belittled whistle-blowers… Bianca took tremendous risks in disclosing the information she disclosed on Trillian, McKinsey, Eskom and a number of others. It seemed a completely natural thing to reach out to her, if anything else, to reassure her that she is not alone in this fight. When I did, I met a lady who is incredibly competent. So let’s be clear, I gave her a job, not because she is a Trillian whistle-blower but because I encountered a woman of tremendous bravery with a strong moral compass and qualifications that are arms long,” says Wierzycka.
Goodson has a five-year-old daughter and, according to Wierzycka, she was petrified.
“My biggest concern was her personal safety. If she had died in a random hijacking, no one would think because no one knew her name. So, what I thought was that the most important thing that needed to happen was to get her name out there in the headlines.”
Wierzycka’s good fight doesn’t end there.
Earlier this year, Sygnia started a new money market unit trust and the firm said it will donate 100% of the management fees, earned on the fund, to non-political organizations fighting corruption. Sygnia also fired KPMG when news on state capture allegations broke.
“At the end of the day, I think it’s up to each company to make a choice. In the instance of KPMG, their board of directors make up their own minds as to whether what they’re seeing is what they expect to be seeing from their service provider and how serious they view what the company has done. In the instance of McKinsey, do you honestly want to do business with a company that has robbed South African taxpayers while we have a tiny taxpayer base supporting such vast percentages of the South African population which is living in inequality… Are you happy, morally, to do business with a business like that? That’s a question each board of directors has to ask,” says Wierzycka.
Another problem with some corporate companies is that they use denial as a first response when they are embroiled in a crisis. It creates a bigger mess.
KPMG South Africa, as an example, hired Nhlamu Dlomu, previously Head for People and Change, to clean up the mess as their new CEO. She couldn’t answer many questions posed to her, probably because she wasn’t prepared to be the CEO of one of the four top audit companies in the country that was facing its greatest crisis.
Women CEOs in times of corporate crisis may be a global trend.
A PwC report found that 38% of female CEOs are forced out of the office; compared to 27% of male CEOs. Another study, by Utah State University researchers, found boards are more likely to promote women and minorities to top leadership roles when an organization is in crisis.
“To me, that was a typical response of an international company that thinks putting a fairly attractive female in front of clients is going to solve the problem… I think that the reason they are losing the battle in the court of public opinion is because they’re arrogant,” says Wierzycka.
Before firing KPMG, Wierzycka says she advised the audit firm to withdraw the entire ‘rogue unit’ report and they refused.
“I said, ‘let’s talk about the money then, because we know that this is blood money, whether it’s stolen from taxpayers or the farming community in the Eastern Cape. R63 million ($4.43 million) will go a long way towards fighting corruption. So donate all this money to organizations which are fighting corruption in South African courts. At least try to redeem yourself in the eyes of the South African public.’ I was told no…,” recalls Wierzycka.
KPMG only withdrew sections of the report, under questioning in parliament, admitting that it was wrong about the SARS report and that their conclusions and recommendations were incorrect.
Clearly, it will take more than marches in Sandton to bring about change.
How To Weather A Corporate Storm
Sylvester Chauke loves to communicate. We meet him in his well-decorated office in Fourways, Johannesburg. As we enter, we are welcomed by multiple awards on the walls behind and in front of his desk. It is like we have entered a trophy factory.
“I don’t know how many awards I have. Not all of them are here but this is all inspiration and it is kudos to the hard work we do,” he says.
This is a world away from where it all started.
At 12 years old he went for a TV commercial audition. He loved it. Since then, he knew he wanted to work in the media industry.
There was research and soul searching. It ushered in a marketing and advertising communications degree, from the University of Johannesburg, and an internship. He never looked back.
Five years ago, he founded DNA Brand Architects; a marketing and brand consultancy company that advises people on how to avoid or deal with corporate crisis. He employs 34 people and counts Vodacom, Edgars, Bonang Matheba, Steers and Wimpy among his clients.
“It is all about taking all these fields of communication, whether it’s broadcasting, advertising, and brand communication, into one space,” says the 36-year-old.
According to Chauke, it is very obvious that there is a corporate communication crisis in South Africa. He says in most businesses, communication is just seen as PR. They send press releases and hope for the best. They don’t plan for a crisis.
“Most businesses don’t think that they have to think and plan for it, they just become overly confident, to some extent quite arrogant, to think that they are such great brands that can sort of overcome anything. We are seeing it right now with the likes of Bell Pottinger, KPMG and McKinsey. It is indicative of that communication is a ‘by the way’ thing,” says Chauke.
It is dangerous. When companies say the wrong thing, they risk losing their clients, or worse, the company. According to Chauke, planning for a crisis isn’t rocket science.
“Most of the time you can anticipate issues. For example, when your financial results come out and they are not good, you should plan what you are going to be saying to the stakeholders about the performance. It is the same if you are going to be retrenching 2,000 people, you need to be prepared.”
Chauke says every business needs a crisis management plan, reviewed annually, for crises they can’t anticipate.
“The biggest challenge that we have is people think because you are a CEO, and you speak to a crowd of 1,000 in a conference, you can handle media. That is so not true. You need an experienced spokesperson to handle that.”
He says Africans should inspire the world.
“I think that if the way that we do business is given a chance and doesn’t get distracted by all the corruption, scandals and corporate blunders, the way we do business would inspire others because we push regardless,” he says.
Maybe this is just the kind of inspiration corporate South Africa needs.
Climate Explained: How Much Of Climate Change Is Natural? How Much Is Man-made?
How much climate change is natural? How much is man made?
As someone who has been working on climate change detection and its causes for over 20 years I was both surprised and not surprised that I was asked to write on this topic by The Conversation. For nearly all climate scientists, the case is proven that humans are the overwhelming cause of the long-term changes in the climate that we are observing. And that this case should be closed.
Despite this, climate denialists continue to receive prominence in some media which can lead people into thinking that man-made climate change is still in question. So it’s worth going back over the science to remind ourselves just how much has already been established.
Successive reports by the Intergovernmental Panel on Climate Change – mandated by the United Nations to assess scientific evidence on climate change – have evaluated the causes of climate change. The most recent special report on global warming of 1.5 degrees confirms that the observed changes in global and regional climate over the last 50 or so years are almost entirely due to human influence on the climate system and not due to natural causes.
What is climate change?
First we should perhaps ask what we mean by climate change. The Intergovernmental Panel on Climate Change defines climate change as:
a change in the state of the climate that can be identified by changes in the mean and/or the variability of its properties and that persists for an extended period, typically decades or longer.
The causes of climate change can be any combination of:
- Internal variability in the climate system, when various components of the climate system – like the atmosphere and ocean – vary on their own to cause fluctuations in climatic conditions, such as temperature or rainfall. These internally-driven changes generally happen over decades or longer; shorter variations such as those related to El Niño fall in the bracket of climate variability, not climate change.
- Natural external causes such as increases or decreases in volcanic activity or solar radiation. For example, every 11 years or so, the Sun’s magnetic field completely flips and this can cause small fluctuations in global temperature, up to about 0.2 degrees. On longer time scales – tens to hundreds of millions of years – geological processes can drive changes in the climate, due to shifting continents and mountain building.
- Human influence through greenhouse gases (gases that trap heat in the atmosphere such as carbon dioxide and methane), other particles released into the air (which absorb or reflect sunlight such as soot and aerosols) and land-use change (which affects how much sunlight is absorbed on land surfaces and also how much carbon dioxide and methane is absorbed and released by vegetation and soils).
What changes have been detected?
The Intergovernmental Panel on Climate Change’s recent report showed that, on average, the global surface air temperature has risen by 1°C since the beginning of significant industrialisation (which roughly started in the 1850s). And it is increasing at ever faster rates, currently 0.2°C per decade, because the concentrations of greenhouse gases in the atmosphere have themselves been increasing ever faster.
The oceans are warming as well. In fact, about 90% of the extra heat trapped in the atmosphere by greenhouse gases is being absorbed by the oceans.
A warmer atmosphere and oceans are causing dramatic changes, including steep decreases in Arctic summer sea ice which is profoundly impacting arctic marine ecosystems, increasing sea level rise which is inundating low lying coastal areas such as Pacific island atolls, and an increasing frequency of many climate extremes such as drought and heavy rain, as well as disasters where climate is an important driver, such as wildfire, flooding and landslides.
Multiple lines of evidence, using different methods, show that human influence is the only plausible explanation for the patterns and magnitude of changes that have been detected.
This human influence is largely due to our activities that release greenhouse gases, such as carbon dioxide and methane, as well sunlight absorbing soot. The main sources of these warming gases and particles are fossil fuel burning, cement production, land cover change (especially deforestation) and agriculture.
Most of us will struggle to pick up slow changes in the climate. We feel climate change largely through how it affects weather from day-to-day, season-to-season and year-to-year.
The weather we experience arises from dynamic processes in the atmosphere, and interactions between the atmosphere, the oceans and the land surface. Human influence on the broader climate system acts on these processes so that the weather today is different in many ways from how it would have been.
One way we can more clearly see climate change is by looking at severe weather events. A branch of climate science, called extreme event or weather attribution, looks at memorable weather events and estimates the extent of human influence on the severity of these events. It uses weather models run with and without measured greenhouse gases to estimate how individual weather events would have been different in a world without climate change.
As of early 2019, nearly 70% of weather events that have been assessed in this way were shown to have had their likelihood and/or magnitude increased by human influence on climate. In a world without global warming, these events would have been less severe. Some 10% of the studies showed a reduction in likelihood, while for the remaining 20% global warming has not had a discernible effect. For example, one study showed that human influence on climate had increased the likelihood of the 2015-2018 drought that afflicted Cape Town in South Africa by a factor of three.
Adapting to a changing climate
Weather extremes underlie many of the hazards that damage society and the natural environment we depend upon. As global warming has progressed, so have the frequency and intensity of these hazards, and the damage they cause.
Minimising the impacts of these hazards, and having mechanisms in place to recover quickly from the impacts, is the aim of climate adaptation, as recently reported by the Global Commission on Adaptation.
As the Commission explains, investing in adaptation makes sense from economic, social and ethical perspectives. And as we know that climate change is caused by humans, society cannot use “lack of evidence” on its cause as an excuse for inaction any more.
The Rage And Tears That Tore A Nation
Snapshots of the outrage against foreign nationals and protests against sexual offenders in South Africa in recent weeks, captured by FORBES AFRICA photojournalist Motlabana Monnakgotla.
As the continent’s second-biggest economy, South Africa attracts migrants from the rest of Africa. But mired in its own problems of unemployment and political instability, September saw a serious outbreak of attacks by South Africans on foreign nationals and foreign-owned businesses. And they have been ugly.
The spark that fueled the raging fire was in Pretoria, the country’s capital, when a taxi driver was shot dead by a foreign national who was selling drugs to a youngster in the central business district (CBD).
The altercation caused a riot and the taxi industry brought the CBD to a standstill, blocking intersections. It did not stop there; a week later, about 60 kilometers from the capital in Malvern, a suburb east of the Johannesburg CBD, a hijacked building caught fire, leaving three dead. As emergency services were putting out the fire, the residents took advantage and looted foreign-owned shops and burned car dealerships overnight on Jules Street.
The lootings extended to the CBD and other parts of Johannesburg.
To capture this embarrassing moment in South African history, I visited Katlehong, a township 35 kilometers east of Johannesburg, where the residents blocked roads leading to Sontonga Mall on a mission to loot the mall and the foreign-owned shops therein overnight.
Shop-owners and workers were shocked to wake up to no business.
Mfundo Maljingolo, a worker at Fish And Chips, was among the distressed.
“This thing started last night, people started looting and broke into the mall and did what they wanted to do. I couldn’t go to work today because there’s nothing to do; now, we are not going to get paid. The shop will be losing close to R10,000 ($677) today. It’s messed up,” said Maljingolo.
But South African businesses were affected too.
Among the shops at the mall is Webbers, a clothing and footwear store. Looters could not enter the shop and it was one of the few that escaped the vandalism.
Dineo Nyembe, the store’s manager, said she was in disbelief when she saw people could not enter the mall.
“We got here this morning and the ceiling was wrecked but there was no sign that the shop was entered, everything was just as we left it. Now, we are packing stock back to the warehouse, because we don’t know if they are coming back tonight,” lamented Nyembe, unsure if they would make their daily target or if they would be trading again.
Across the now-wrecked mall are small businesses that were not as fortunate as Webbers, and it was not only the shop-owners that were affected.
Emmanuel Nhlane’s home was robbed even as attackers were looting the shop outside.
“They broke into my house, I was threatened with a petrol bomb and I had to stand outside to give them a chance; they took my fridge, bed, cash and my VHS,” said Nhlane.
Nhlane had rented out his yard to foreign nationals to operate a shop. He does not comprehend why his belongings were taken because he doesn’t own a shop. Now, it means that the unemployed Nhlane will not be getting his monthly rental fee of R3,700 ($250).
Far away, the coastal KwaZulu-Natal province of South Africa, was also affected as trucks burned and a driver was killed because of his nationality. This was part of a logistics and transport industry national strike.
Back in Johannesburg, I visited the car dealerships that were a part of the burning spree on Jules Street.
The streets were still ashy and the air still smoky, two days after the unfortunate turn of events.
Muhamed Haffejee, one of the distraught businessmen there, said: “Currently, we are still not trading.”
Cape Town, in the Western Cape province of South Africa, which hosted the World Economic Forum (WEF) on Africa from September 4 to 6, was also witness to protests by women and girls from all walks of life outside the Cape Town International Convention Centre, demanding that the leadership take action to end the spate of gender-based violence (GBV) in the country.
There were protests also outside Parliament. What set off the nationwide outcry was the shocking rape and murder of Uyinene Mrwetyana, a 19-year-old film and media student at the University of Cape Town, inside a post office by a 42-year-old employee at the post office.
There was anger against the ghastly crimes and wave of GBV in the country that continues unabated. According to Stats SA, there has been a drastic increase of women-based violence in South Africa; sexual offences are up by 4.6%, from 50,108 in 2018 to 52,420 in 2019.
A week later, on a Friday, Sandton, Africa’s richest square mile and one of the biggest economic hubs, was shut down by hundreds of angry women and members of advocacy groups from across Johannesburg. They congregated by the Johannesburg Stock Exchange (JSE), the cynosure of business, singing and chanting, to demand “a 2% levy on profits of all listed entities to help fund the fight against GBV and femicide”.
Among the protesters was Cebi Ngqinanbi, holding a placard that read: “I’m not your punching bag.”
“We came here to disrupt Sandton as the heart of Johannesburg’s economic hub. We want to make everyone aware that women and children are being killed every day in South Africa and they [Sandton] continue with business as usual, sitting in their offices with air-conditioners and the stock exchange whilst people on the ground making them rich are dying. That is why we are here, to speak to those that have economic power,” said Ngqinanbi.
She added that if women can be given economic power, they will be able to fend for themselves and won’t fall prey to abusive men, since most women stay in abusive relationships because men are more financially stable.
Amid the chanting and singing of struggle songs, Nobuhle Ajiti addressed the crowd and shared her own haunting experience as a migrant in South Africa and survivor of GBV. She spoke in isiZulu, a South African language.
“I survived a gang rape; I was thrown out of a moving car and stabbed several times. I survived it, but am I going to survive xenophobia that is looming around in South Africa? Will I able to share my xenophobia story like I can share my GBV story?” questioned Ajiti.
She said as migrants, they did not wake up in the morning and decide to come to South Africa, but because of the hardships faced in their home countries, they were forced to come to what they perceived as the city of opportunities. And as a foreign national, she had to deal with both xenophobia and GBV.
“We experience institutionalized xenophobia in hospitals; we are forced to pay huge amounts for consultation. I am raped and I need medical attention and I am told I need to pay R5,000 ($250).
“As a mere migrant, where am I going to get R5,000? I get abused at home and the police officer would ask me where I’m from because of my accent, I sound Zimbabwean. What does my nationality have to do with my husband beating me at home or with the man that just raped me?” she asked.
Addressing the resolute women outside was the JSE CEO Nicky Newton-King who received the memorandum demanding business take their plight seriously, from a civil society group representing over 70 civil society organizations and individuals.
The list of demands include that at all JSE-listed companies contribute to a fund to resource the National Strategy Plan on GBV and femicide, to be launched in November; transport for employees who work night shifts or work after hours; establish workplace mechanisms to provide support to GBV survivors as part of employee wellness, and prevention programs that help make workplaces safe spaces for all women.
Newton-King assured the protestors she would address their demands in seven days. But a lot can happen in seven days. Will there be more crimes in the meantime? How many more will be raped and killed in South Africa by then?
How LinkedIn Is Looking To Help Close The Ever-Growing Skills Gap
As the job market has evolved, so too have the skills required of seekers. But when 75% of human resources professionals say a skills shortage has made recruiting particularly challenging in recent months, it would appear as though the workforce hasn’t quite kept pace. Now LinkedIn is stepping in to help close the gap.
On Tuesday, the professional social network announced the launch of a “Skills Assessments” tool, through which users can put their knowledge to the test. Those who pass are given the opportunity to display a badge that reads “passed” next to the skill on their profile pages, a validation of sorts that LinkedIn hopes will encourage skills development among its users and help better match potential employees with the right employers.
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“We see an evolving labor market and much more sophistication in how recruiters and hiring managers look for skills. … We also see a changing learning market,” says Hari Srinivasan, senior director of product management at LinkedIn Learning. “The combination of those two made us excited about changing our opportunity marketplace to make the hiring side and the learning side work better together.”
So how exactly does it work? Let’s say a user wants to showcase her proficiency in Microsoft Excel. Rather than simply listing “Excel” in the skills section of her profile, she can take a multiple-choice test to demonstrate the extent to which she is an expert.
If she aces the test, not only will a badge verifying her aptitude will appear on her profile, but she will be more likely to surface in searches by recruiters, who can search for candidates by skill in the same way they might do so by college or employer. If she fails, she can take the test again, but she’ll have to wait a few months—plenty of time to develop her skillset.
The tool has been in beta mode since March, and while just 2 million people have used it—a mere fraction of LinkedIn’s 630 million members—early results seem promising. According to LinkedIn, members who’ve completed skills assessments have been nearly 30% more likely to land jobs than their counterparts who did not take the tests.
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“This has been a really good way for members to represent what they know, what they are good at,” says Emrecan Dogan, LinkedIn group product manager.
While new to LinkedIn, the practice of assessing candidates’ skills has been a standard among hiring managers for decades. But when research commissioned by LinkedIn revealed that 69% of employees feel that skills have become more important to recruiters than education, LinkedIn felt as though this was the time to give job seekers the opportunity to prove themselves from the get-go.
As important as the hard skills that members can put to the test through LinkedIn’s new tool may be, Dawn Fay, senior district president at recruiting firm Robert Half, encourages those on both side of the job search not to forget the importance of soft skills. “You wouldn’t want to rule somebody in or out just based on how they did on one particular skill assessment,” she says.
“Have another data point that you can use, question people about how they did on something and see if it’s something that can feed into the puzzle to find out if somebody is going to be a good fit.”
-Samantha Todd; Forbes
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