January - June 2020

New wine into new wine skins: An alternative economic strategy for South Africa’s economic reconstruction

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2020

New wine into new wine skins:
An alternative economic strategy for
South Africa’s economic reconstruction

  • Prof Mark Swilling and Dr Nthabiseng Moleko
  • October 2020

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What is this report about?

Despite 26 years of democratic rule, South Africa remains one of the most unequal countries in the world. Here are some statistics:

  • In 2017, only 50.7% of learners completed secondary school.
  • 30% of the working-age population is unemployed.
  • Women earn about 30% less than men for the same work.
  • 90% of asset wealth owned is by 10% of the population.
  • About 30 million people live below the poverty line.
  • More than 17 million people rely on social grants.

How can South Africa solve the triple crisis of poverty, inequality and unemployment? Up until now, reliance on mainstream economic thinking and micro-economic solutions have not yielded the outcomes we need to support development in this country, particularly in the Covid-19 context. As a result, there is an urgent need for an alternative economic framework.

This report is the outcome of a multi-stakeholder project aimed at providing alternative solutions packaged into seven strategic interventions. According to the authors of the report, South Africa needs a new model of the state – a model underpinned by enhanced coordination, domestic capital mobilisation, and less reliance on external capital markets. This model needs to generate demand for labour while stimulating productivity, facilitating structural transformation, and producing more sophisticated goods within a diversified economy. The fundamentals of this policy should include:

  • Restructuring the economy to enhance productivity and support inclusive growth
  • Reforming value chain and distribution channels to absorb new entrants
  • Transferring the factors of production (land, capital, skills) to black South Africans
  • Optimising public goods and ownership
  • Adopting technology to advance growth
  • Targeting full employment of South Africans.

The authors believe that the seven strategic interventions proposed in this report have the potential to bring about an inclusive, equitable and sustainable economy for South Africa. Each of these interventions come with a number of alternative strategies:

  • Using a coherent industrial planning framework to drive economic growth
  • Adopting labour-absorbing strategies to reduce unemployment
  • Boosting domestic food production and rural development
  • Mobilising domestic capital and obtaining private sector participation
  • Using fiscal policy to stimulate growth, redistribute income and eliminate poverty
  • Building the capacity of the state, especially after being weakened by state capture
  • Growing the economy through redistribution to help open up the economy to previously disadvantaged people and smaller businesses.

Who produced this report?

This report was commissioned by the Law Faculty of Stellenbosch University, and was supported by various institutions and role players. This report originated from two workshops held in Stellenbosch in August and November 2019, convened by Prof Thuli Madonsela, Chair of Social Justice at Stellenbosch University. The aim of the workshops was to gather future policy makers, established as well as upcoming young economists, thought leaders and academics, and particularly those whose voices are largely unheard in the current discourse on economic growth.

The report was finalised by the convenors of the workshops, namely Prof Mark Swilling and Dr Nthabiseng Moleko. Dr Moleko is a senior lecturer in Managerial Economics and Statistics at the University of Stellenbosch Business School.

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SU Research covid-19

Stellenbosch University’s Research and Innovation Response to the COVID-19 Pandemic

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2020

SU Research covid-19

Stellenbosch University’s Research and Innovation Response to the COVID-19 Pandemic

  • Corporate Communication Division, Stellenbosch University
  • JULY 2020

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Why this report?

Stellenbosch University wants its research efforts to deliver on academic excellence as well as make a significant impact in the world. That is why advancing knowledge in service of society forms part of its vision and strategic framework.

As the Covid-19 pandemic is spreading around the world, it causes numerous challenges – also for South Africa. Stellenbosch University, in line with its strategic framework and the focus on research for impact, committed to contribute to global efforts to overcome the pandemic. The university’s researchers are currently involved in, and have now initiated, various research activities related to the pandemic.

This report provides a cross-cutting view of the research done by faculties, research centres and units at Stellenbosch University that can help to fight the consequences of Covid-19. The report also contains opinion pieces and articles by academics to help us make sense of the pandemic. The academics who contributed to this report include a number of USB’s lecturers.

The report is structured into four sections:

  • Section A: Published inventions that may have a possible applicability to Covid-19
  • Section B: Completed SU research projects related to Covid-19
  • Section C: Ongoing research projects at SU with a relevance to Covid-19
  • Section D: Articles and opinion pieces by SU academics (up to 6 April 2020).

The report will remain work-in-progress over the weeks and months to come, as more research is initiated in this area.

Contribution by USB’s lecturers

  • Dr Nicky Terblanché, head of USB’s MPhil in Management Coaching programme: The role of executive coaching in supporting leadership during a pandemic. The aim of this research is to investigate the challenges faced by organisational leaders and executive coaches during the Covid-19 pandemic, the strategies they employ to cope with the challenges and to what extent organisational leaders draw on their learning from the executive coaching they received during this time. The result will include a conceptual framework and practical guidelines of leadership and executive coaching during a pandemic. See Section C, p. 8.
  • Seraj Toefy, custodian of entrepreneurship at USB: Entrepreneurs hit hard by Coronavirus – ways to stay afloat. This article provides practical advice to small business owners to stay afloat during the pandemic. See Section D, p. 27.
  • Prof Arnold Smit, Associate Professor of Business in Society: Virus and values. This opinion piece unpacks five moral values that we all have in common. These values, says Prof Smit, are the essence of what makes us human, and should be upheld at all costs during these difficult times in our society. See Section D, p. 29.
  • Dr Morne Mostert, Institute for Futures Research: New future with and after Corona. Change to the traditional model of work has been hovering for quite some time. The virus has suddenly brought this about, putting millions at a distance from where they have to work and earn a living. Also, civil disobedience is entrenched in South Africa’s psyche, which is affecting the way the country deals with the pandemic. See Section D, p. 32.
  • Dr Lee-Ann Steenkamp, senior lecturer in taxation at USB: Covid-19 tax relief: a snapshot of what’s out there. Across the globe, many governments have been forced to lock down their countries in an attempt to curb the spread of Covid-19. A number of African countries have adopted similar measures. This has stalled, if not brought to a halt, economic activity, resulting in loss of income for businesses, workers and the self-employed. So which tax relief ideas are the best? The author sifts through the options and identifies ideas that could be useful examples to policy makers, including those in South Africa. See Section D, p. 34.

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Carrots & Sticks 2020 – Sustainability Reporting Policy: Global trends in disclosure as the ESG agenda goes mainstream

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2020

Carrots & Sticks 2020 – Sustainability Reporting Policy: Global trends in disclosure as the ESG agenda goes mainstream

  • By the Global Reporting Initiative (GRI) and University of Stellenbosch Business School (USB)
  • JULY 2020

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What is the report about?

The Carrots & Sticks (C&S) reports take stock of the regulatory landscape of non-financial and sustainability reporting. It shows how sustainability reporting has become more mainstream and more mature over the years.

The 2020 edition of this report gives public and private sector users an overview of hundreds of reporting provisions covering more than 80 countries, including the world’s 60 largest economies. This includes mandatory and voluntary requirements and guidance from regulators, capital markets, professional associations, industry bodies and other organisations.

The ESG&E (environmental, social, governance, & economic and general) agenda continues to provide reporting topics. Climate change, human rights, labour and anti-corruption are dominant themes among disclosure requirements.

Carrots & Sticks is an initiative of the Global Reporting Initiative (GRI) and the University of Stellenbosch Business School (USB), with contributions by the UN Environment Programme (UNEP).

What did the report find?

Key findings of C&S 2020 include the following:

  • The UN’s Sustainable Development Goals (SDGs) have become a global framework that influences policy development. Yet, very few of the policies covered in the 2020 C&S report explicitly refer to the SDGs. The SDGs most often addressed in reporting provisions are SDG 12 on responsible production and consumption, SDG 16 on inclusive societies and accountable institutions, as well as SDG 8 on decent work and economic growth. Few provisions provide for business disclosure on SDGs 3 to 4, linked to health and education, although the Covid-19 pandemic may change this. As one interviewee said, “The SDGs are useful in two ways. Firstly, companies can measure and report their impacts in relation to the SDGs and implement new ideas that improve the business, reducing their footprint and minimizing overall negative impacts. Secondly, organizations can use the SDGs as inspiration and design criteria for new product development and business process innovation, developing products and services that contribute to solving real global challenges while meeting human needs.”
  • Europe continues to drive the ESG disclosure agenda, accounting for 245 reporting instruments, while the Asian markets (174) are increasingly active. North America has a low number of reporting provisions (47), a fact that in part reflects the lower number of national jurisdictions in North America. At country level, higher numbers of reporting provisions, including reporting requirements and resources, were found in the UK, Spain, USA, Canada, Brazil, Colombia, Japan, China, India and South Africa.
  • Most reporting provisions are issued by governmental bodies, rising by 74% since 2016 to almost 400, while engagement by financial market regulators including central banks has also grown significantly. Provisions targeting the private sector, and in particular large and listed companies, account for around 90% of the C&S 2020 listing. Provisions that apply to SMEs and the public sector are largely unchanged since the 2016 C&S report.
  • The disclosure of decision-useful information is becoming increasingly important to decision makers and stakeholders of reporting organisations. Greater collaboration is therefore needed among standard setters, reporters, information users, regulators and policymakers to streamline requirements and improve the quality of disclosure. Also, agreement on the preferred disclosure format is still lacking.

The 2020 Carrots & Sticks report primarily targets policymakers from the governmental, regulatory and non-profit communities. It supports their drive to develop regulatory frameworks and requirements that secure the disclosure of more relevant information. This in effect supports accountable stewardship, leading to a more sustainable future.

More about the report

  • Carrots & Sticks 2020 – Sustainability reporting policy: Global trends in disclosure as the ESG agenda goes mainstream. Global Reporting Initiative (GRI) and the University of Stellenbosch Business School (USB).

Download full report

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finance function leadership in the integrated enterprise

CFO as value creator – finance function leadership in the integrated enterprise

The Steinhoff Saga Management review - University of Stellenbosch Business School

January – June 2020

finance function leadership in the integrated enterprise

CFO as value creator – finance function leadership in the integrated enterprise

  • By Shari Littan, Kristine Brands, Dr Cornis Van der Lugt and Brad Monterio
  • JULY 2020

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What is the report about?

In the past, corporate social responsibility was often seen as a stand-alone project farmed out to the marketing department. However, stakeholders like customers, employees, policy makers and citizens increasingly call for an integrated approach to sustainable business. Over and above making profit, businesses must also play a role in global issues such as corruption, climate change, deforestation, ocean plastic pollution, and the fair use of human talent, which includes embracing diversity and inclusion, and engaging with employees.

What role should the chief finance officer (CFO) play to help ensure a sustainable business? To find out, the authors of this report interviewed various CFOs and grouped the findings into 10 themes:

  • Governance, champions, and collaboration
  • Sustainability 101: Information sharing on the basics
  • Improving the reporting agenda
  • Improving information quality
  • Decarbonising operations
  • Measuring the value of human capital resources
  • Improving supply chain oversight
  • Risk management: Climate and other material ESG risks
  • Operations, strategy and planning
  • Connecting sustainable business performance measurements to value.

The CFA as value creator

Companies all over the world are taking steps to incorporate sustainable business activities and adopt an integrated approach to their governance, strategy and operations. This evolution is affecting the day-to-day role of the CFO and the finance and accounting professionals in the CFO’s reporting unit (collectively, finance).

The CFO is uniquely qualified to serve as a critical collaborator in sustainable business and integrated enterprise activities. These activities include evaluating project alternatives, implementing new work streams, delivering decision-quality information, assessing performance, and measuring connections to value.

The board and executives establish the company’s purpose and values while the CFO takes a leadership role by instituting structures for collaboration. Finance’s expertise brings a targeted approach to measure and analyse data and improve processes. In this role, finance serves as a true business partner helping the organisation to draw up a strategy, assess risks, and innovate for the long term.

As one interviewee said, “Once the finance people get involved, they are more demanding and don’t simply take numbers at face value. Their involvement helps with the realization that the focus is not just on fluffy stuff.”

It starts with collaboration

When the CFO team and the sustainable business team begin to collaborate, it typically leads to a series of meetings that can be described as “Sustainability 101”. This partnership brings tremendous value, also in terms of mainstreaming external sustainability reporting.

For CFOs to take on leadership responsibilities, they need to gather decision-useful information across different disciplines, including the concepts around sustainable business and fostering an integrated enterprise. Equipped with best practices, they become real value creators in their organisations.

More about the report

  • Littan, S.H., Brands, K.M., Van der Lugt, C.T., & Monterio, B.J. (2020). CFO as value creator— finance function leadership in the integrated enterprise. Institute of Management Accountants, and the Association of Accountants and Financial Professionals in Business.
  • Dr Cornelis van der Lugt is a Senior Lecturer at the University of Stellenbosch Business School.

Download full report

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