She sat in disbelief as the Chairman of the Board quoted numbers and explained that the millions the company was making was insufficient and therefore, he had no choice but to terminate her current contract worth a few thousand. For him, what was important was to protect the profit margins of the company and possibly his own personal standing, including the planned golf day. She was expendable. Neither party at this discussion where aware of the virus yet to come.
As with many, the business is now in lockdown. The workforce of over 500 people are at home. What decisions will this man take in the next few weeks? Will he also resort to retrenchments? No doubt he can, after all, everybody does. There was already a slew of retrenchments happening due to the economic crises before the virus. Weeks of no business is hard to recover from. What is the solution? For executives it seems that breaking contracts with those who cannot fight back whether they be contractors or staff is the way to go, the easy solution.
How do we as human beings justify this type of rationale? The answer is: “it’s not personal, it’s just business”. How can the man driving his Mercedes say this to another who arrived at work with a taxi? The arguments, defences, rational, business models and economic theory come quickly. We have all heard them. But who are all these nameless, faceless shareholders that demand such high returns on their investments? Isn’t it us? Isn’t it our own pension funds? What will it take for us to collectively realise that profits need to be smaller so that more people can remain employed? Who is willing to stand up and lead with courage and sanity in this time?
Business doesn’t work that way. We have ratio’s and returns on investment to consider. Yet, there are those who are willing to stand up and go against the grain. In August 2016, Gareth van Zyl reported that Futuregrowth had made a decision to freeze funding to six state-owned enterprises over concerns about the governance and decision structures of companies such as Eskom. The decision, at the time, resulted in the suspended negotiations on over R1.8bn of debt finance to three different SOEs in particular. Not everyone was impressed with this decision. in fact, Old Mutual distanced themselves from the statement. However, quietly, behind the scenes all bankers applauded the bold stand and took similar action. The playing field had changed. Those unquestionable business principles had been questioned in the interests of better principles. The need for proper governance trumped the usual drive to get the deal at any cost.
What has this to do with business today? A lot. It shows that by working together we can forgo some of our desired outcomes while seeking better ones. We can forgo the forecasts for 2020/21 in favour of keeping our staff employed. There are many different ways of doing this. If we really care about each other, we will realise that saving jobs is just as important as saving lives. “The truth is the economy can only restart when people can safely go back to work”. Bruce Whitfield 7 May 2020. The more people who are employed the better the economy can perform, the more tax revenue is generated the better government can attend to the needs of all the people of South Africa. Our country. One nation.