Corporate governance is built on fundamental principles identified as fairness, accountability, responsibility and transparency. These appear in and are common to the majority of international publications dealing with the responsibility of directors.

The King Commission Report on Corporate Governance also refers to these fundamental requirements. However, personally I believe the four can be reduced to two basic requirements i.e. honesty and trust.

You need to ensure total transparency, openness and Honesty in every respect. You have a responsibility to make sure a code of ethics exists. You must ensure the ethical conduct of those who represent your company and those with whom you do business. This is what your shareholders, employees and the public require and are entitled to.

When honesty and transparency are lacking there can be no trust. You cannot cultivate a climate of trust in the absence of ethics and honesty. Consequently fairness, accountability and responsibility cannot exist.

Is a dishonest director, employee or manager trustworthy, responsible and fair? Do they consider their accountability before being dishonest?

Possibly yes, but in most instances no. Accountability is overlooked and lost.

Consider the relationship between managers and staff if employees believe they cannot trust the manager or each other? The trust relationship breaks down and employees will start to be dishonest. Sick leave will increase, as your employees will not be motivated to come to work.

Your dedicated and enthusiastic workers will feel they no longer want to be committed or dedicated and will start to waste time and work less productively.

Managers are responsible for ensuring the code of ethics is enforced and accepted by the employees. Managers are required to ensure employees are adequately trained on company values, standards and compliance procedures. Are your managers seen to be honest?

We live in a “low trust society”. To implement a code of ethics and ensure good corporate governance you must first address the issues around trust and honesty. Management from the top down must be seen to be trustworthy, honest and ethical.

All employees should be aware of the contents of your ethics policy. Having a code of ethics and striving for good corporate governance is no longer sufficient.

In order to achieve success you must give your code some life, give it meaning. Honesty, trust and ethics have a specific meaning for you, do they mean the same for your employees?

Des Squire
Applied Management Studies International (Pty) Ltd
011 646 9369 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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