a)The South African Constitution signed into law on 10 December 1996 lays the foundations for a democratic and open society in which government is based on the will of the people and all people in the country are equally protected by law. The Constitution is the overriding dominant legislation in South Africa.
b)All persons, whether they be natural persons or juristic persons, are subject to the Constitution. The Constitution lays the foundation for ethics (i.e.moral principles, treatment of moral questions) in South Africa.
c)Chapter 2 of the Constitution entrenches the rights of all people in the country and affirms the democratic values of human dignity, equality and freedom in the form of a Bill of Rights. (under the section Historical Documents select Legislation and then the SA Constitution)


The business environment is therefore no different. Entrenched rights remain entrenched, and we need to ensure that business practices do not infringe the rights of others, and that business practices remain ethical. These rights can be classified into:
➢ Property rights: rights as a juristic person (able to contract)
➢ Personality rights: rights as an individual to human dignity, equality and freedom

This applies not only to internal policies, but also to external dealings with stakeholders.

Unfortunately, as a result of much unethical behavior which has primarily been at the expense of consumers, ethical practice has had to be legislated, and strict penalties imposed for non-compliance, as a measure to encourage good moral principles.

Important legislation in South Africa includes the Companies Act, which stipulates that organisations engage in conversations about ethics matters at the highest level of leadership by establishing a subcommittee of the governing body (board, council or trustees) called the Social and Ethics Committee (CIPC, 2011), and the Fourth King Report on Corporate Governance for South Africa, hereafter referred to as King IV, which encourages organisations to not only measure their ethical cultures, but to ensure that ethical culture is an outcome of organisational corporate governance actions (IoDSA, 2016).


Within the financial services industry, there are some very common ethical problems. It is as a result of many of these problems that the Regulator, has seen fit to introduce legislation to protect the consumer from some of these problems. This legislation in many instances, is a formalisation of what should be sound ethical business practice.

The General Code of Conduct for Financial Services Providers and Fit and Proper, in particular, focuses on many ethical applications of business practice. Aspects such as:
➢acting in the best interest of clients, and maintaining a fiduciary relationship
➢disclosing potential conflicts of interest,
➢providing sufficient information to clients to allow them to make an informed decision
➢providing services by competent, qualified and thorough persons
➢ensuring controls are in place to prevent services being provided which are not in the client’s best interest are behaviors which are fundamentally “ethical” in that they are the “right thing to do”.


Although fundamental values remain constant, there may be different focus placed on different values, in different industries. Business sectors may, as a result of their business practices, emphasize values believed to be most applicable.

Fundamental rights should be further reinforced by adopting the industry bodies codes (e.g. FPI, ASISA, SAVCA) and/or developing internal codes of conduct, which acknowledge the rights of individuals and is relevant to the organisation. This defines morally acceptable behavior, provides guidance for making moral decisions, and sends a clear message to stakeholders.

“A Code of Conduct (or a Code of Ethics, Credo, Value Statement etc) is a document or agreement that stipulates morally acceptable behavior within an organisation. It defines the moral standards or guidelines that need to be respected by all members of an organisation in their dealings with internal and external stakeholders.” (Business Ethics in Africa – Deon Rossouw)
‘A code of ethics serves as a central guide to support day-to-day decision making at work. It clarifies the cornerstones of an organisation-its mission, values and principles-helping managers, employees and stakeholders understand how these cornerstones translate into everyday decisions, behaviors and actions.’ (Creating a Workable Company Code of Ethics-ERC books)


Business codes, policies and procedures provide direction for conducting business responsibly, or ethically.

Policies direct choices and actions that foster and meet stakeholder expectations. Procedures describe what to do and what to avoid doing so that choices and actions are responsible and right.


Values are convictions we consider important to or valued by us. Values are beliefs and opinions that we hold regarding specific issues or ideas, and are internal, subjective, and malleable. They may change as demands or needs change.

They are based on beliefs and attitudes and involve what is desirable, rather than what is necessarily right and correct.

For example, while we know the worth of our services and believe in receiving a fair fee, we may also value making our services accessible to everyone, regardless of their economic means, and therefore incorporate a sliding scale into our fee structure.

As individuals, we don’t necessarily agree on what is worthy as a “value” and may change our value structure many times. When values are shared by members of an organization, however, they can be extraordinarily important tools for making judgments, assessing probable outcomes of contemplated actions, and choosing among alternatives.

Principles comprise our action and enable us to behave with integrity. Principles have been woven into society and often govern interactions between people. In the financial services industry, our principles should include:

  • HONESTY: We are required to be honest and truthful in all our dealings and not deliberately mislead or deceive others by misrepresentations, overstatements, partial truths, selective omissions, or any other means.
  • INTEGRITY: We must demonstrate personal integrity and the courage of our convictions by doing what is right even when there is great pressure to do otherwise. We will act, at all times, in a manner consistent with external requirements, as well as our values.
  • TRUSTWORTHY: We must be candid and forthcoming in supplying relevant information and correcting misapprehensions of fact. When we make a commitment, every reasonable effort must be made to fulfill this. FAIRNESS: We must be fair and consistent in our dealings with our clients, our colleagues, and other stakeholders.
  • RESPECT: We must have respect for human dignity, autonomy, privacy, rights, and interests of all those who have a stake in our decisions.
  • COMPLIANT: We must abide by laws, rules and regulations relating to our business activities.
  • ACCOUNTABILITY: We must acknowledge and accept personal accountability for the ethical quality of the decisions and omissions we make.