Ethical Leadership and Corporate Citizenship: Principle 1.1: The board should provide effective leadership based on an ethical foundation (1.1.2)

What follows are some personal insights into the provision of the code set out in the King III report on corporate governance; how it affects business and how it transforms business not only into lighthouses of virtue, while maintaining the purpose of business; but it also stirs business into becoming model corporate citizens which are able to conduct their business in an effective, responsible and in a sustainable way.

Principle 1.1 of the Code : The board should provide effective leadership based on an ethical foundation:

Item 2:

"Responsible leaders build sustainable businesses by having regard to the company‘s economic, social and environmental impact on the community in which it operates. They do this through effective strategy and operations."

 This is indeed a profound statement, which possibly has been ignored especially in the US, namely that "Responsible leaders build sustainable businesses". Business as usual, was to secure the greatest gains, which in many cases has proven catastrophic. Business practises need to be sustainable, so short sighted approaches cannot be allowed to take precedence even if it makes sense on the bottom line. Quarters move along and the short term profits, soon like the seasons move onto winter, which if no sustainability was worked into the business could prove to be the businesses last; which will go down the tubes dragging communities with it. The consequent suffering will be what is remembered, not the short term gain. So indeed, these words: "Responsible leaders build sustainable businesses" are indeed profound beyond measure.
But even such great wisdom needs a context, it needs to be expanded to truly create no uncertainty as to its ambit of application.
Businesses of any size, are corporate citizens, hence as citizens of an increasing enlightened and educated country and the world; businesses need to be responsible as to how their choices impact the their employees, their families, the economically connected (such as other businesses dependent on the custom of the aforementioned), those in term connected to their client businesses and of course the tax revenue generated in the process, which is substantial. Seen in this context every business is an enabler of a better society. Seen in this context, business, not the civil service, needs to be encouraged. But given the benefits of business on the community, the need to ensure that businesses are stable and sustainable should be of paramount success.
Given the fact that one cannot ignore the fact that businesses have an impact and a part to play socially and environmentally; further highlights the fact that the businesses activities need to pass muster when seen in relation to these aspects.
Does this mean that businesses must become charities? Some might say so, but that is unsustainable in the long term. Businesses, by being good businesses, which are sustainable naturally uplift the community in which they operate and through their tax revenues allow government to carry out their required duties with regard to those in need.
This part of the code is brilliant in its simplicity -  which gives the key to how businesses are to do perform their awesome task - that is through effective strategy and and operations.
It is not lost on me that much this has been propounded for centuries in various forms in business literature, but it is refreshing to see the synthesis which has been highlighted here, that being good at what a business does is not wrong, but it needs to done the right way and with the correct guiding principles.
This one can see a corporate version of Ubunthu; but with the added business view - in other words businesses have to recognise the fact that they need to be competitive internationally, not just locally.
As a closing comment is that at last maybe business, can be seen as being part of the community, not apart; that the community can see the contribution business makes and appreciate its inputs and maybe, just maybe if business fully embraces this new way of seeing itself - maybe business will take its rightful place in society.

Ethical Leadership and Corporate Citizenship: Principle 1.1: The board should provide effective leadership based on an ethical foundation (1.1)

What follows are some personal insights into the provision of the code set out in the King III report on corporate governance; how it affects business and how it transforms business not only into lighthouses of virtue, while maintaining the purpose of business; but it also stirs business into becoming model corporate citizens which are able to conduct their business in an effective, responsible and in a sustainable way.

Principle 1.1 of the Code : The board should provide effective leadership based on an ethical foundation

"Good corporate governance is essentially about effective, responsible leadership. Responsible leadership is characterised by the ethical values of responsibility, accountability, fairness and transparency."

Good governance is more than just a slavish following of the law and the industry standards, governance goes beyond that encompassing the and meshing the purpose of the business with ethics - ensuring sustainability. This places a heavy burden on the leader / stewards of the business; they cannot ignore all else to ensure financial gains only; they have to also do this ethically and sustainably.
But often one is faced with words like "effective" and "responsible" in a context of a code, one cannot but feel that that the bonds and restrictions closing on already stressed management necks. But there is also an undeniable positive spin to these words, which shine a light on the higher nature of humanity, which does not preclude profits.
Being effective is at the heart and soul of almost every business leadership  book on the shelves; to be a leader is a relatively easy task; but to be effective; that is quite another. Being an effective leader could be seen as having attained the holy grail of leadership; within a corporate environment; it is without doubt vital to the business to ensure that all leaders are effective leaders.
But why would an code mention effective leadership? This is because the great minds who played a part in casting this code recognised the fact that for good governance to be effective and sustainable it must be relevant to businesses. It must bake business sense and what more sense than ensuring that providing leadership which is effective, become part of the code. This also clearly shows that there is an attempt at creating a conspiracy of effectiveness. Who would have thought that one could use those two words together?
It is also interesting that the the code further requires that the leadership be responsible. It is interesting that in addition to making it clear that leaders must ensure that they are responsible; it is also vital to recognise that together with effective; the authors clearly wish to make it clear that leader are also responsible to communicate this call for effective and responsible leadership through the business. This is evident from the fact that the corporate entity needs to ensure that to ensure complete compliance, it needs to ensure that through leadership it communicates the guiding principles of "responsibility, accountability, fairness and transparency" throughout the business, to ensure that the businesses ethos becomes one characterised by these laudable principles.
In any community or society these virtues are vital to good governance and stability, without them no endeavour is truly a sustainable success.
It is also important that in the South African context that these virtues be upheld, because people generally learn by example, and where do most people spend most of the their waking day, but at work. This positive influence on the business cannot but have a positive effect both on the business itself, but also by providing an a shining example to suppliers and customers, of what is good in the world and worth emulating. Then there is the positive effect on the extended family of those who are part of the business.
In a society which some have described as on the verge of moral bankruptcy, this example by business, cannot but be seen as being part of what is required of corporate citizens of our great country.
But what is encouraging is that the approach is refreshing in its approach and message.
These principles and how they are set out in this section are not only inspirational but also make for not just good business, but for great business.
[Quotation above from the King III report]