Financial Mail editor Barney Mthombothi referred to the Marikana massacre in his 24 August editorial as “the end of our innocence”. By the time you read this, the country may know what happened and why, and what has to be done to prevent something similar in the future. Though perhaps not, because we as a country are not very good at learning from past experiences. We are much better at ducking and diving, hoping that the story will disappear into the shadows. Hoping that people will forget.
I am not just talking about Marikana. This approach is often the way that leaders in government and business tackle risk.
Looking at Marikana, Jonathan Guthrie of the Financial Times (17 August) refers to companies’ lack of understanding of issues outside of their immediate (business) interests, leading to the withdrawal of a social licence: “the kind of licence to operate that no government can grant”. It is this social licence to operate that ensures that business remains sustainable. Not government regulations or economic conditions.
Regulations have not and will not stop global institutions from behaving unethically. Economic conditions have always fluctuated, but if you don’t understand people and cannot empathise, and most importantly, if you think that you do not need to talk about their concerns, you will lose your business sooner rather than later.
Nowhere is this more clear than in an analysis of South African media. In focusing on issues of sustainability (broadly reporting on non-financial issues), we have found that these levels of reporting reached only 16% in the second quarter of 2012, down 2% from 2010. Eighty-four percent of reporting during this quarter dealt with financial issues. In other words, business continued to promote the ‘numbers game’, despite history having proven that numbers can no longer be trusted.
Sure, this is perhaps also the failure of a journalist to understand the consequences and ask pertinent questions. But first and foremost, it is the deliberate attempt by companies to avoid answering the questions that everyone knows won’t lead to perfect answers. Yes, there will be retrenchments. No, our skills upliftment is not really up to scratch. Yes, we have failed to improve on our operational efficiency and, because of that, we cannot really reduce our prices.
With the average global CEO holding on to his/her post for about five years, there are also no real incentives to work towards a long-term social licence. With this kind of tenure, by the time the proverbial shit hits the fan, the golden handshake makes the CEO’s transition to the next corporation even smoother.
Justin Fox and Jay W. Lorsch pose a very good question in their article of the July-August edition of Harvard Business Review: ‘What Good Are Shareholders?’ The authors bemoan the lack of information flow between shareholders and managers and vice-versa, with communication engagements limited to conference calls and only following the release of quarterly earnings.
What corporates forget is that the public is the biggest shareholder. They might not own shares but they hold the social licence to operate – and it is here that media relations and communication is so critical. The public does not want to wait for quarterly results. They don’t want to search between the lines. They want ongoing honest and transparent communication. This has always been one of the roles of the media. Yet somewhere, this role has been forgotten by business.
Media are also too scared to lose the little commercial relations they have, instead focusing on bashing the government because it is easier and the commercial impact is lower. Such an approach deprives the public of information. It also deprives business of gaining a thorough understanding of what the public thinks.
Yes, this contribution has been written in anger. Close to 50 people have died because various parties failed to communicate. Others refused to listen to what was obvious to anyone reading and listening to South African media coverage for the past few years.
Will any lessons be learned? We can only hope.
This story was first published in the October 2012 issue of The Media magazine.