South Africa

Addressing corporate corruption in South Africa

Research partners: 

Principal investigator: Dr Stephen Gelb (Overseas Development Institute) 

Co-principal investigator: David Lewis (Corruption Watch South Africa)

Summary

Corruption by and within corporations is different from that involving smaller businesses, because corporations are large and complex organisations with informal networks as well as formal hierarchies, and distinctive cultures. Therefore ‘top down’ interventions to enhance accountability through improved reporting and transparency, and training of employees and other stakeholders, needs to be complemented by control mechanisms informed by ‘bottom up’ understanding of a corporation’s distinctive social organisations. 

Why the corporate sector?

There is very little research available which attempts to measure the significance and extent of corporate crime in South Africa. South Africa is an important arena for examining the processes, through which corporate corruption occurs, and programmes and mechanisms to address corruption, because it has a substantial corporate business class. To provide one indicator, the South-African Revenue Services estimates that just 380 corporations of the more than 800 000 companies assessed for tax, paid 57.3% of total company income tax collected in 2019. The Johannesburg Stock Exchange is a major stock exchange globally, with around 470 listed equities, several of which are dual-­listed on foreign exchanges, mostly in Europe, while there are also a number of privately-­owned unlisted corporations. Around two-thirds of listed South African corporations are multinationals, operating across sub-Saharan Africa and all other regions globally.

The research project

This project examines corruption in and by corporations, where there is an economically and politically significant corporate class, and where large scale corruption in the public and private sectors has increased substantially over the past decade. Starting from the view that corporations are heterogeneous social organisations, the project aims to develop a protocol for in-company analysis of formal structures and systems, of informal networks and of organizational cultures, and the interactions amongst these. The protocol will include a guide to developing customised and-corruption programmes. We will test the protocol through three company case studies. Using a gender lens underlines the importance and value of our approach to corporations as complex social organisations – without this, corporations remain understood as a ‘black box’ as in standard social science approaches, and the gender dynamics remain invisible.

The aim will not be to identify corrupt acts and economic crime which may have occurred but to analyse the corporation as a social organisation, to understand how opportunities to engage in corruption, pressures to do so, and rationalisations for doing so, may evolve within the organisation. 

This research project is one of nine projects from our grants scheme that aim to tackle corruption in the private sector.

Sectors

Public Goods & Infrastructure

Read more

Productive Sectors

Read more

Governance Agencies

Read more