Ethics enhancing Local Government Accountability IMFO CONFERENCE 06 October 2015, Emperors’ Palace Presenter : Manfred Moses : ESAAG & Office of the Accountant-General, National Treasury

Why are we here? The Constitution of South Africa envisages a robust local government system, which can provide democratic and accountable government for local communities and... Ensure the provision of services to communities in a sustainable manner Promote social and economic development Promote a safe and healthy living environment Encourage the involvement of communities and community organisations in the matters of local government. 2

What is Ethics At its simplest, ethics is a system of moral principles. They affect how people make decisions and lead their lives. Ethics is concerned with what is good for individuals and society and is also described as moral philosophy. The term is derived from the Greek word ethos which can mean custom, habit, character or disposition. 3

Ethics covers the following dilemmas: how to live a good life our rights and responsibilities the language of right and wrong moral decisions - what is good and bad? Our concepts of ethics have been derived from religions, philosophies and cultures. They infuse debates on topics like abortion, human rights and professional conduct. 4

What is organisational ethics? Organisational ethics refers to standards of good, right, and fair conduct that prevail in an organisation. These standards determine how an organisation will treat internal and external stakeholders. The ethics of an organisation is influenced more by the prevailing culture in an organisation than by what is written in policy documents. In other words, it is about the informal knowledge of 'how we do things around here'. Organisational integrity is the extent to which the formal policy documents and the actual behaviour are aligned. 5

Is there a difference between Ethics and a Code of Conduct ? Not everyone draws a distinction between the two, but it can be useful to do so. A code of ethics is a short, aspirational document outlining an organisation's core ethical values, ideals and principles. A code of conduct on the other hand, is a longer, directional document. It is very specific in describing or forbidding specific behaviour and consequently easier to enforce. Codes of conduct typically lay down procedures and rules regarding acceptable or unacceptable practices related to operational issues. In essence, a code of ethics is a value-based document, while a code of conduct is a rule-based document. 6

Code of conduct for councillors ALL city councillors for all municipalities in South Africa have to abide by a code of conduct which requires them, among other things, to declare their financial interests, and to report back to the constituencies at regular intervals. Councillors are elected to represent local communities on municipal councils, to ensure that municipalities have structured mechanisms of accountability to local communities, and to meet the priority needs of communities by providing services equitably, effectively and sustainably within the means of the municipality. In fulfilling this role councillors must be accountable to local communities and report back at least quarterly to constituencies on council matters, including the performance of the municipality in terms of established indicators. In order to ensure that councillors fulfil their obligations to their communities, and support the achievement by the municipality of its objectives set out in section 19 of the Act, the following Code of Conduct is established. 7

General conduct of councillors A councillor must- perform the functions of office in good faith, honestly and a transparent manner; and at all times act in the best interest of the municipality and in such a way that the credibility and integrity of the municipality are not compromised. 8

Organisations with Low Ethical Maturity 9 Compliance – MSA, Code of Conduct Derives from an external authority- National Treasury Effectiveness equals the quality of enforcement- Accountant- General, Auditor- General, Public Protector, CoGTA High maintenance cost

Higher ethical maturity Commitment from the institution Derives from own decisions Sustainable Effectiveness equals the quality of values 10

Cost of ethical failure Financial loss Positions lost Leaders jailed Business Closure Reputational damage to the institution 11

What are the benefits? Greater trust and more individual accountability Attracting and retaining top staff Improved employee engagement and commitment Less need for policing and avoidance of excessive regulation Enhanced stakeholder support Improved risk management Reduce cost of capital and easier access to capital Ultimately improved service delivery to citizens 12

Sources The Constitution of the Republic of South Africa Schedule 5 of the Municipal Structures Act Ethics Institute of South Africa Cynthia Schoeman, Ethics Monitoring and Management Services 13