Business: Does it support or undermine democracy as we head into elections?
By Ian Kilbride
On the 30th anniversary of our democracy, legitimate questions can be raised about the role of business in supporting or undermining democracy.
Of course, business itself is highly variegated and not simply reducible to a good business versus bad business paradigm. But examples of business practices that are both good and bad for democracy are evident.
The historical evidence is clear that the more progressive elements of big business in South Africa supported the transition to democracy in the 1990s and in turn were its beneficiaries.
A 2021 joint report by the International Labour Organisation and Pretoria University documents the vital role of the then Consultative Business Movement, among others, in supporting, facilitating and funding the delicate transition to democracy in the 1990s. The democratic dividend returned to business has been unfettered access to international markets, particularly Africa, and a largely predictable and stable, if over-regulated, domestic operating environment.
What then of the dark side of business and its impact on democracy? The evidence laid bare during the Zondo Commission revealed that avaricious business elements not only exerted obscene influence over political parties, leadership, government and governance, but effectively controlled cabinet decisions and positions as well as key state institutions. This abuse by corrupt businesses to manipulate government for malevolent corporate and personal gain is the clearest case of business undermining our hard-won democracy.
Chief Justice Zondo warned this year that despite the cleansing light of his eponymous commission, our democracy remains vulnerable to abuse by malevolent forces, including corrupt business. Indeed, bribery, manipulation, “tenderpreneurship” and influence peddling persist as the stock in trade of some businesses across all sectors. And as the recent fines paid by leading international consultancy firms and global software companies operating in South Africa attest, corruption is not confined to local business.
More insidiously, businesses evading tax and denuding the fiscus of scarce revenue, in effect undermine democracy by curtailing the funding of state institutions supporting democracy. Indeed, our democratic institutions, including Parliament, are still to recover fully from illicit business stoking the “nine lost years”.
Yet, while Minister in the Presidency Khumbudzo Ntshavheni was on the money last year in fingering some businesses in malevolence, the sweeping accusation of undermining government and thus democracy is patently untrue.
Business support for democracy is not simply ideological or idealistic. Global evidence suggests a correlation between stable democracies and thriving business. Of the top 50 global businesses, 45 operate in stable democracies. This does not suggest causality, of course, but rather a strong symbiosis. As a general rule, democracy is good for business.
There is, however, an understandable hesitance among the business community to do politics at the workplace, but doing politics at the workplace is conceptually different to the promotion of and support for democracy.
Democracy hinges on freedom of political choice and electoral competition. In this regard, the proliferation of parties on the 2024 ballot paper and the notable inclusion of independent candidates for the first time suggests a maturing of our democracy. In this regard, businesses’ funding for political parties, new parties and independent candidates is vital. Far from weakening democracy by “frightening away” donors, the transparency of the Political Party Funding Act has to some degree exorcised the business vampires leeching the life-blood out of party politics.
But beyond the funding of political parties directly, the progressive business community contributes to the “thickening” of democracy by funding think tanks, universities, NGOs and civil society, all of which are vital to the health and sustainability of democracy.
Yet business has the capacity to do far more. The first and most obvious suggestion is to support civic and voter education. Arguably the greatest danger currently facing South Africa’s democracy is voter ignorance and apathy.
Voter turnout can have a decisive impact on election outcomes and this has been in decline since the watershed 1994 elections. For the first time since democracy, the 2019 elections saw less than 50% of eligible voters casting their ballot.
While the Independent Electoral Commission (IEC) is to be commended for its voter registration drives, the percentage of registered eligible voters continues to fall – from 80.5% in 2014 to the current 67%. So, while a record 28 million are registered to vote in the 2024 elections, more than 13 million eligible citizens are not. Business in particular should be alarmed that some 56% of eligible 18–29-year-olds are unregistered. This apathetic and disillusioned cohort sees no benefit to voting, leaving the legitimacy of our democracy in question.
The IEC, political parties, unions and the media can only achieve so much, but as responsible corporate citizens, business could be doing far more to promote voter education at the workplace and in the office. In this regard, business enjoys an unusual advantage, as the 2024 Edelman Trust Barometer reveals that whereas trust in business is high among South Africans, the gap between public trust in business and public trust in government is the widest in the world.
Trust in business rates as 62/100, while trust in government ranks a lowly 29/100. Thus, South African business is well-placed to deploy its social capital to strengthening democracy through meaningful initiatives such as civic and voter education. It is in its own best interests to do so.
Ian Kilbride is the chairman of Spirit Invest and an Honorary Professor at Stellenbosch Business School, ian@kilbride.org
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