Resilience is not a strategy

By Brian Mhlongo, Director, MBM Valkyrie Advisory

On 31 October the Mail & Guardian carried a piece by Dr Ruth Kolevsohn of Good Governance Africa under the headline “South African businesses cannot keep adapting to governance failure”. Her argument is that the praise we heap on companies for surviving power cuts, broken logistics and the cost of corruption has become a polite way of excusing the institutions that caused the damage. Every rand spent on a generator or a security contract that should not have been necessary is a rand that did not go into growing the business.

I agree with her. I also think the argument stops one step short of the boardroom.

Dr Kolevsohn writes about what business should demand of the state, and she is right to. But a board cannot fix the state before its next meeting. What it can fix is its own house, and after some years of sitting in council and committee meetings I can say that most boards assume their house is in better order than the paperwork shows.

The score that does not move

Transparency International published its 2025 Corruption Perceptions Index on 10 February this year. South Africa scored 41 out of 100, the same as the year before and a point below the global average of 42. The final part of the State Capture Commission’s report was handed to the President on 22 June 2022. More than four years on, the score has not shifted.

Nobody running a business needs an index to tell them this. The point is that while we wait for the environment to improve, the law has quietly moved the question onto the company itself.

What the law now asks of the business

Since 3 April 2024, section 34A of the Prevention and Combating of Corrupt Activities Act has made it an offence for a company when a person associated with it offers or gives a bribe to win or keep business for that company. “Associated” is wide. It covers anyone who performs services for the company or on its behalf, whatever their title, so the agent, the consultant and the “business development” contractor are all included. The company’s defence is that it had adequate procedures in place to prevent this. The Act does not say what adequate means. The company has to be able to show it.

The Protected Disclosures Act already requires every employer to authorise internal procedures for receiving and dealing with reports of wrongdoing, and to take reasonable steps to bring those procedures to the attention of every employee. Many businesses have a hotline number on a poster and nothing a manager could follow.

King V applies to financial years beginning on or after 1 January 2026. For a company with a December year-end, the first year it covers closes in a few weeks. The Code has been cut from 17 principles to 13, and it still asks an organisation to disclose how it applied each one.

Four questions for the last board meeting of the year

1. Who may commit this company, and where is that written down? If the honest answer is “everybody knows”, the company has a custom, not a delegation. Customs are very hard to prove after the person who knew has left.

2. Who acts for us outside the building? Ask for a list of every agent, intermediary and consultant who deals with customers or officials in the company’s name, the contract each one signed and what was checked before they were appointed. That list is where a section 34A defence starts.

3. If an employee wanted to report something tomorrow morning, where would they go? Then ask three employees, not the head of HR.

4. What do our minutes show? Minutes that record only that a report was “noted” tell a later reader that the board listened. They do not show that it asked, decided and followed up.

Start at home

None of this replaces what Dr Kolevsohn is asking for. Chambers and business associations should press for consequences, because one firm refusing to pay cannot change a market in which its competitor does. But a business that demands accountability from the state should be able to produce its own on request.

Resilience has kept a great many South African businesses open, and that deserves respect. It will not help on the day a funder, a regulator or a prosecutor asks who decided, on what authority, and where it was recorded. Only the paperwork answers that, and it has to exist before the question is asked.

Sources: R Kolevsohn, “South African businesses cannot keep adapting to governance failure”, Mail & Guardian, 31 October 2026; Transparency International, Corruption Perceptions Index 2025, as reported by Corruption Watch on 10 February 2026; Prevention and Combating of Corrupt Activities Act 12 of 2004, section 34A; Protected Disclosures Act 26 of 2000, section 6(2); King V Code on Corporate Governance for South Africa, 2025. All read on 12 November 2026. This piece is general commentary. It is not legal advice on any specific matter, and no professional relationship arises from reading it.