WORLDVIEW: Others must heed FirstRand – in SA, no automatic social licence to do business

By Alec Hogg.In Parliament yesterday South Africa's leading banking group showed us that in this rapidly transforming country the business of business is no longer just business. SA companies are being held to an ever-higher standard. Their old stand-offish approach no longer washes – businesses now must be seen to be having a beneficial impact on society. .This responsibility is sure to raise demands for increased disclosure from those now asking the questions. But that is tomorrow's debate. For the moment, all SA executives should be paying close attention to what FirstRand CEO Johan Burger presented to Parliament yesterday. It is a stark reminder of business's need to engage and communicate clearly to a political regime which continues to grapple with the concept of free enterprise..___STEADY_PAYWALL___.By every measure, FirstRand's contribution to SA societal advancement is remarkable. The bank sets a high standard against which contemporaries are sure to be measured..For instance, its BEE transaction resulted in a staggering R23.5bn being transferred from the company's owners to a broad base of previously disadvantaged shareholders. For context, that's enough money to buy 10% of the entire Kenyan stock market – or 7% of Nigeria's..Total black ownership of FirstRand's equity is now 36.5%, far above the apparent 10% national average President Jacob Zuma quoted in his recent State of the Nation address..The banking group has also created two of the country's largest Corporate Social Responsibility vehicles. Its black-controlled FirstRand Empowerment Foundation, established when the BEE transaction was done, has an endowment of R6bn. The original FirstRand Foundation, established when the group was formed in 1998, has been the direct recipient of R1.7bn in group profits. Between them, the two FirstRand Foundations distribute a hefty R460m a year to good causes, primarily into education..Internally, the darkening of the complexion of the group's staff has been rapid. CEO Burger said three quarters of FirstRand's staff and 52% of its directorate are now African, Coloured or Indian, a huge difference to the lighter complexion of the past. And the trend is accelerating: blacks now account for 87% of the bank's new graduate employees. There are similarly impressive numbers on financial inclusion – FirstRand has allocated R53bn to funding transformational infrastructure; R36bn to BEE transactions; R10bn into affordable housing; R8.3bn in loans to black SMEs; R3.5bn to the taxi industry; and so on..Banks are not alone in their contribution. In its annual report yesterday, Anglo American Plc pointed out its direct and indirect taxes, mostly into SA, is a hefty R58bn a year. Apart from CSI efforts, SA corporates make an outsized contribution through employee tax contributions, VAT payments and a slice of their profits. Like FirstRand did yesterday, they now need to blow their own horns. Theirs is an authentically "good story". But they can no longer simply assume it is heard. Those controlling the social licence need reminding of what is being risked through their anti-business rhetoric. Often.

WORLDVIEW: Others must heed FirstRand – in SA, no automatic social licence to do business

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