By Professor Owen Skae, Associate Professor and Director of Rhodes University Business School
The duty to act in good faith is not a soft concept. It is the foundation of effective, ethical leadership. As a matter of urgency, all stakeholders in the higher education crisis including the president, the minister of higher education and training, all chairs of council, vice-chancellors, political parties, academics and students need to consider whether they are acting ethically and in good faith. Those who don’t keep deadlines, change demands, don’t show up at negotiations or participate for 15 minutes and then leave are not acting in good faith.
Unless everyone commits to this, the last remnants of trust will completely break down and it could mean the closure of universities, the loss of academics and the growth of private higher education institutions that will not be able to deliver on the scale the country needs. This would erode our public institutions and further disadvantage the financially in need — the very students the fees movement is intended to support.
We need look no further than King IV, which comes out at the beginning of November, to see the prominence that Mervyn King places on ethical leadership at an individual and collective level. The draft report says: “Leadership starts with each person charged with governance duties, but in addition, the governing body as a collective must set the ethical example and tone.”
It specifies that corporate governance has, as its foundation, ethical and effective leadership. “Ethical leadership is exemplified by responsibility, accountability, fairness and transparency. Ethical and effective leaders should reinforce each other.”
Some might argue that governance in higher education institutions is not the same as corporate governance, but this is nonsense. King IV is not a corporatisation exercise, it is about understanding the principles and practices of ethical and effective leadership.
This applies to all groups, organisations, societies and governments. All are duty-bound to act responsibly and in good faith. In its definition of responsibility, King IV says: “The governing body should assume ultimate responsibility for the organisation, as well as the protection of resources including financial, human, social and relational, and intellectual and natural capitals.
Regarding fairness, the report says the governing body should ensure that it balances in its decisions, the legitimate and reasonable needs, interests and expectations of material stakeholders of the organisation, in the best interests of the organisation.
The raison d’être of universities is the accumulation and sharing of knowledge with and for students, and with and for society. While I hope that all reasonable-minded people would aspire to live in a society in which all young people have access to the best, free education the state can provide from the first grade to PhD level, the challenge is when the demands become unreasonable.
It is simply not possible for SA’s universities by themselves to tackle the needs, interests and expectations of the stakeholder group that is demanding free education for all, despite its legitimacy. Universities simply do not have the resources to do this. The focus must turn to the state because the role and leadership of the state is paramount in this crisis. But what is once again very clear is the government’s lack of leadership and dodging of responsibility. The minister of higher education and training had a year to tackle this issue, to at least come up with a plan. One would have thought he would have learnt about commitment to fiduciary duty, when he joked that “students must fall”.
Some commentators are now waking up, after 12 months, to the idea that this crisis is about far more than fees, which is why it might be referred to as a black-swan event.
The term was popularised by finance professor and former Wall Street trader Nassim Taleb and refers to volatile, complex systems that have been suppressed and that as a result, become extremely fragile, more dangerous and less predictable, with the potential to blow up. Such a situation is extremely difficult to predict and can have a knock-on effect for the whole society. Taleb explains that history is replete with such examples — from the French Revolution to the Bolsheviks — and yet somehow humans remain unable to process what they mean and that they will happen again.
By definition, however, black-swan events are typically random and unexpected, whereas the higher education crisis was wholly predictable.
So, when I’m asked whether we are experiencing a black-swan event, I’m in two minds.
What I know is that unless we start seeing all organs of state including the Treasury and all stakeholders in the many crises we are facing — from the student protests to Finance Minister Pravin Gordhan’s summons. to the SABC and South African Airways — starting to act in good faith and with an ethical consciousness, the remnants of stability and control will quite literally explode. At that stage, I will no longer be in two minds. The point is: none of us will.
First published in Business Day on Wednesday, 19 October 2016.