The African Peer Review Mechanism (APRM) recognises that a well-designed system of corporate governance is essential for creating an environment that at once enables profitable business and keeps business behaviour within responsible boundaries – together, the preconditions for development.

To explore this, it devotes an entire thematic area to corporate governance, but to date this topic has tended to attract relatively little attention.

Getting Down to Business – and its three subsidiary Policy Briefs, Building an African Corporate Governance, ‘Good Citizens’: Corporate Social Responsibility in Africa, and Corporate Governance in Africa’s State-owned Enterprises: Perspectives on an Evolving System – seeks to analyse the extensive body of information that the APRM process has gathered on this subject and to explore the implications for business.

Read the report Getting Down to Business, or see the three related briefings by the author on this topic:

Building an African Corporate Governance

Corporate Governance in Africa’s State-owned Enterprises: Perspectives on an Evolving System

‘Good Citizens’: Corporate Social Responsibility in Africa

Drawing on the Country Review Reports (CRRs) of Lesotho, Mauritius, Mozambique, South Africa, Tanzania and Zambia – six member states of the Southern African Development Community which have thus far undergone review – it examines the numerous themes raised. Among these are the state of the business environment, corporate ethics, company boards, corporate governance legislation, stakeholder relationships and the concept of corporate governance within informal enterprises.

Launched in November 2014 at public discussions in Johannesburg and Lusaka – before audiences of academics, activists and businesspeople – it provoked passionate debate around the role that business plays, and is expected to play, in Africa’s development.

Download the presentation made at the public launch in Lusaka, Zambia.

Both in the research and in the discussions at the launch functions, it became clear that the continent’s private sector, particularly its indigenous private sector, remains a work-in-progress. Africa’s businesses are battling tough operating environments – while simultaneously being pressed to ‘do more’ for the social upliftment of the societies in which they operate. Striking an appropriate balance between these sometimes conflicting imperatives is a critical strategic challenge for the continent’s long term development, with loud political overtones.

Deciding, for example, on a suitable model for corporate social responsibility – should this be mandatory? Incentivised through taxes? Left to the discretion of individual firms? – is one that will inevitably reflect prevailing ideological currents, government priorities and the success of particular interest groups. Whether this will produce well-functioning and well-balanced systems depends on whether clear, evidence-supported arguments can be made for them, and whether these can inform a ration process of policy making and implementation.

Indeed, the particular nature of Africa’s business – in particular, its frequent informality – raises important considerations with regard to the conceptualisation of corporate governance itself. In common with trends increasingly identified elsewhere, Africa is developing a unique, syncretic form of corporate governance. What is emerging is a system that stresses the importance of taking into account the legitimate interests of all stakeholders, taking a long-term perspective on firm-level and broader socio-economic sustainability.

Africa’s business context demands that assumptions about a universally-applicable formalistic or legislated approach be approached cautiously. In Africa’s context, this is unlikely to be either practicable or effective. Rather, corporate governance in Africa should be seen rather in terms of broad ethical considerations on the part of entrepreneurs. Corporate governance is a matter for all entrepreneurs. The challenge is to craft a system that both holds businesses accountable as well as facilitates their profitable operation.

As Africa attempts to gear its often embryonic private sectors for expansion, Getting Down to Business is a timely contribution to an often undervalued continental conversation, and a showcase of the valuable work the APRM has done as a vehicle for enquiry.

19 Nov 2014