The Public Sector has a unique opportunity to build increased trust and accountability – now more than ever
Published - 21 April, 2022
Reflection on discussions with the Auditor General of South Africa
By Itumeleng Ndlozi, Executive Head of Ince’s Public Sector Division
We often hear the phrase “trust is earned” or “trust is the ultimate currency”. These brief phrases are packed with deep meaning – mainly because they express the value of trust in our lives: it is indeed earned and remains the ultimate currency of trade.
The origins of the word “trust” are fascinating. The word comes from the Latin term Fideicommissum, from the union of the words “Fide”, which means trust or faith, and “Commissum”, which means commission, together this translates as “a trust commitment.”
This means that trust is not only something we, as institutions, work towards building, but it is also a commitment we uphold.
In our work at Ince – as South Africa’s leading investor marketing agency advising the public and private sectors – we interact with many organisations who strive to build greater trust with the public, their investors, analysts, media and clients through increased transparency and accountability. This takes various forms: a detailed integrated report covering all aspects of an organisation’s performance or a digital solution that allows a large organisation to communicate complex issues with its stakeholders.
A positive development is that we consistently see how the pressure to be more accountable and transparent is coming from all stakeholders rather than a limited few. The rise of ESG investing in the private sector and several frameworks governing the public sector in South Africa and beyond – means we are all in the business of earning and keeping trust.
One shining example of how to lead the imperative to build greater trust and accountability is the Auditor General of South Africa, Tsakani Maluleke. Since taking up her current role last year, she has been working to find new ways to innovate how the public sector manages and accounts for taxpayers’ money.
One such innovation is the Auditor-General’s “real-time audits”. These are designed to “follow the money” as it is spent and report any audit findings and observations to the accounting officers or authorities concerned so that they can respond to shortcomings immediately. Ince recently had the pleasure of hosting a wide-ranging discussion with the Auditor-General, where we explored the continued challenges that exist in our public sector and how we can turn the tide.
The picture is stark. Take local government, for example. Municipalities are the first line of service delivery for millions of South Africans, but the downward trend in their finances means that they cannot provide the necessary services to advance development. Just last year alone, over R189 billion was recorded as unauthorised and fruitless expenditure by the Auditor General.
Only 28% of municipalities submitted quality financials for audit purposes, and just 11% received clean audits. A similar picture applies to many of our State-Owned Companies across the length and breadth of our country.”
But what is clear is that we cannot abdicate this responsibility to government alone. Working in partnership with the government, the private sector plays an important role in building and promoting a culture of trust and transparency.
No longer “business as usual”
A key insight from our interaction with the Auditor General of South Africa is that it can no longer be business as usual. At Ince we interact with organisations — in the public and private sectors — that have varied stakeholder needs and concerns. The one consistent thing that stands out is the need to build trust. This applies not only to South Africa but also to the rest of the globe.
An OECD study from December 2021 demonstrates how only 51% of citizens trust their governments. This has a number of implications: trust is the foundation for the legitimacy of public institutions, a functioning democratic system, and a thriving business environment. This is a collective responsibility that we cannot shirk.
Now more than ever, we need to find new ways of innovating corporate governance, accountability, and transparency. This is the work that we, at Ince, are passionate about.”
We believe that organisations, particularly those in the public sector, have an opportunity to find new ways to build greater trust and transparency. In our work, we have seen the value of using data to distil those issues that matter to stakeholders, bolstering this through integrated reporting strategies that go beyond compliance — but help build a better sense of openness.
The debate over how much transparency we should have often comes down to fights over ‘more’ or ‘less” — how open can we be about our challenges and opportunities, and how do we best report on these to our stakeholders: be they shareholders, regulators, or society more broadly. The shift to a more stakeholder-centric world, for business and the public sector, means that we need to find ways to speak to stakeholders in their own right to build greater trust.
The words of the Auditor General, Tsakani Maluleke, are instructive: “We should be all driven by a stronger purpose, other than the need to do our job. We are custodians of the dreams and aspirations of millions of our people. They put their trust in us.”
We, as Ince, stand ready to work with the public and private sectors to achieve this.
Contact us to learn more about how we can support your organisation.