For businesses across South Africa, the past few years have been a test of endurance. They have kept the lights on through electricity disruptions, rerouted goods around logistics failures, absorbed regulatory uncertainty and carried the costs of corruption. Their resilience is real, and it deserves recognition. Yet there is something troubling about an economy in which ordinary businesses must grow ever more resilient simply to make up for institutions that fail at their basic functions. At some point, celebrating that resilience becomes a quiet excuse for tolerating poor governance.
That question sat at the centre of the Johannesburg Chamber of Commerce and Industry’s annual conference on 28 October, where business leaders gathered to discuss governance, ethical leadership and economic resilience. It also runs through the work of Good Governance Africa, whose recent Executive Dialogue Series arrived at a blunt conclusion: businesses cannot build sustainable competitive advantage by adapting indefinitely to institutional failure.
The people behind that conclusion see governance not as a compliance chore but as an economic asset, one whose value depends on whether the wider institutional environment rewards integrity, enables fair competition and holds those who abuse power accountable. Dr Ruth Kolevsohn, group executive director for governance programmes at Good Governance Africa and a PhD candidate in the department of psychology at the University of Pretoria, frames the issue as one of lived commercial reality rather than abstract principle.
The numbers give that reality shape. South Africa scored 41 out of 100 on Transparency International’s 2025 Corruption Perceptions Index, published in February this year, ranking 81st among 182 countries and territories. The index measures perceptions of public sector corruption rather than its actual incidence, but it reflects persistent concerns about institutional integrity.
For businesses, the consequences show up on their own balance sheets. Companies have invested in backup electricity, alternative logistics arrangements, additional security and increasingly elaborate risk management systems. Some of that spending is a prudent response to ordinary commercial uncertainty. Other parts of it simply compensate for failures in public infrastructure and institutional performance. Every rand spent managing avoidable institutional risk is a rand unavailable for productive investment. Institutional economist Douglass North argued that institutions shape economic performance by structuring incentives and reducing uncertainty; where rules are credible and consistently enforced, businesses transact with greater confidence, and where they are unreliable, transaction costs rise.
South Africa’s experience of state capture shows how far those costs reach. The Zondo Commission documented extensive manipulation of public procurement and state-owned enterprises, with consequences for electricity supply, transport infrastructure and institutional credibility. Resilience may keep individual businesses alive, but it cannot indefinitely compensate for an economy that systematically undermines their competitiveness.
The country has become adept at identifying wrongdoing, commissioning investigations and publishing recommendations. Accountability, however, requires more than exposure. It requires visible consequences, whether through prosecutions, asset recovery or institutional reform. Four years after the State Capture Commission delivered its final report, that gap between identifying failure and implementing reform remains open. At the Executive Dialogue Series, former Chief Justice Raymond Zondo revisited the commission’s recommendation for an independent Public Procurement Anti-Corruption Agency, an institution that would strengthen the capacity to detect suspicious procurement patterns and intervene before corruption becomes entrenched. The Public Procurement Act of 2024 provides for a Public Procurement Office within National Treasury, but it does not establish the independent anti-corruption agency the Commission envisaged. That distinction matters, because effective procurement oversight is fundamental to fair competition, not merely a public administration concern.
Meanwhile, the dilemma facing individual companies was laid bare during the series, supported by the European Union’s Enhancing Accountability Technical Assistance Facility, when Dr Max Burger-Scheidlin of the International Chamber of Commerce in Austria introduced an approach known as Corruption Avoidance for Sustainable Competitive Advantage. Consider two companies competing for a public contract. One refuses to offer an illicit payment; the other does not. If the second company wins, the ethical business may lose revenue, market share and potentially jobs. The problem is not a lack of ethical awareness. It is a commercial environment that has failed to reward integrity. Political scientists Anna Persson, Bo Rothstein and Jan Teorell call this the collective action problem of systemic corruption: where corruption becomes an expected feature of institutional life, individual actors have limited incentives to behave differently, even when they recognise the collective harm.
That is why collective action matters. A business that refuses an improper payment may lose a contract; an employee who exposes wrongdoing may face retaliation; a supplier that challenges an irregular tender may risk exclusion from future opportunities. Business associations, chambers of commerce and industry bodies can establish common standards, support procurement transparency and advocate for credible accountability institutions, spreading risks that no single company can manage alone. Corporate boards, too, must treat governance as a strategic responsibility rather than a function delegated entirely to compliance officers, asking whether conflicts of interest are managed, procurement exceptions investigated and employees able to report wrongdoing safely.
Because corruption increasingly operates across borders, through illicit financial flows, concealed assets and complex networks of influence, Good Governance Africa also serves as Convening Partner for Africa in the movement for a proposed International Anti-Corruption Court, which would complement domestic institutions where national enforcement capacity or political will fails. Domestically, GGA is supporting a policy analysis project with the Nova School of Business and Economics in Portugal, focused on Governance as an Investment Catalyst, exploring how stronger governance can improve investment readiness and unlock economic opportunities, particularly in South Africa.
The question is no longer whether good governance makes economic sense. It is whether business is prepared to help create the conditions in which integrity pays. As the analysis published at https://mg.co.za/thought-leader/2026-10-31-south-african-businesses-cannot-keep-adapting-to-governance-failure/ argues, rather than simply demanding a better business environment, business leaders must help create one, closing the distance between exposing wrongdoing and achieving accountability, and turning better governance into greater investment readiness.