This is the final part of Business Leadership SA’s response in which it is stated that ‘BLSA commits to working to create a Code of Conduct on remuneration and labour practices for its members’.
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Building competitiveness: Business Leadership South Africa’s response to the National Development Plan – 15 May 2012
To view or download the entire response click on the above link or go to Business Leadership SA itself.
“Going forward together
BLSA is committed to seeking out partnerships with the Commission and with government and labour to achieve the vision articulated by the NDP. In this section we propose eight areas where we think that business and government, working in partnership, can achieve quick successes together, building confidence in the NDP as a whole.
BLSA commits to working to create a Code of Conduct on remuneration and labour practices for its members. As we have noted throughout, improvements to the labour market will need to involve give and take at all levels. Wage moderation should be pursued at all levels, including some sacrifices by management. Moreover, entry level wage flexibility should not be won as an excuse to displace existing workers.
Business has the project management, process and administration skills to help with filling the backlog of government vacancies as quickly and efficiently as possible. Not only will this have an immediate impact on employment but this is a crucial step towards the goal of improving the capacity and efficiency of the state and enabling government to meet the objectives set out in the NDP.
BLSA believes that one of the key challenges that South Africa faces is that there are many unemployed people, but not enough skilled people to provide the catalyst for their employment or to create new jobs. The Commission and BLSA need to work together to work out why the current skilled immigration programme is not working and to create the environment that stimulates the migration of much needed skills to our country.
Working in partnership with the State Owned Enterprises, the Ministry of Public Enterprises and the Commission, BLSA members can help to develop a national proposal around the concept of infrastructure investment as an attractive asset class.
The significant investments in infrastructure over the long term should be matched by immediate and on-going investment in infrastructure maintenance. Doing so will create immediate jobs, offset future infrastructure spending and help deal with the supply side constraints to growth.
The setting up of dedicated corruption courts would do a great deal to inspire confidence in the zero tolerance approach to corruption. BLSA is keen to work with government to investigate the viability of institutions like these.
By placing more emphasis on incorporating independent power producers into the grid, and by emphasising the role of local partners in the construction of power plants, the government will be helping not only to secure supply but also to potentially create a globally competitive industry.
Joint economic diplomacy between BLSA and government will help South African companies compete abroad and advance the interests of the country as a whole.”
Business Leadership SA Code of Conduct on remuneration and labour practices (Carol Paton in Business Day)
Big business moves to cut bosses’ pay, boost jobs
Business Day first published an article by Carol Paton concerning BLSA’s Response and with the permission of Business Day here are some random extracts and the complete article can be read by clicking on the link or going to Business Day itself.
“Business Leadership SA — whose members include the CEOs and chairmen of South Africa’s largest corporations and multinationals — says it is committed to devising a code of conduct on remuneration and labour practices for its members that will include ‘sacrifices by management’.”
“This undertaking is in line with international concern about high executive remuneration, even when performance is below par, and may address the trade unions’ objection to wage restraint as a tool for job creation.”
“Business Leadership SA on Tuesday published its response to the national development plan produced by the National Planning Commission.”
“It broadly embraced the plan and outlined several areas where the government and business, working in partnership, could achieve ‘quick successes’ and ‘build confidence’ in the plan.”
“Wage moderation should be pursued at all levels, including some sacrifices by management”.
“Other suggestions calculated to open the door to a more fruitful interaction and partnership between business and government are contained in Business Leadership SA’s response to the national development plan.”
EDITORIAL: Taking the lead on executive pay (Business Day)
The editorial was published for the first time today in Business Day and with their permission here are some random extracts from the editorial which can be read by clicking on the above link or going to Business Day itself.
“THE announcement by Business Leadership SA that it will develop a code of conduct on remuneration and labour practices aimed at increasing transparency is a step in the right direction.”
“In a country with one of the highest rates of inequality in the world, remuneration practices across the board — whether unskilled or executive — should be transparent and linked to performance. The commitment by Business Leadership SA comes in response to calls by Finance Minister Pravin Gordhan and Economic Development Minister Ebrahim Patel, who have called for pay restraint from workers and executives to contain inflation and reduce inequality.”
“This commitment to fair remuneration is also in line with the government’s New Growth Path economic policy, which includes a social compact between the government, business, labour and civil society in pursuit of common goals.”
“To be clear, executive pay levels are not the cause of SA’s stark income disparity. The chronic skills shortage, coupled with restrictive labour laws that discourage firms from hiring across the board and especially where labour can easily be replaced with machinery, are the real culprits.”
“However, in a country where the gap between rich and poor is so stark, remuneration that is not linked to concrete performance outcomes is unjustifiable.”
“Guidelines on executive pay will also help to close the gap between public and private sector remuneration, which would reduce the incentive for executives to move from the public into the private sector as soon as they have acquired skills and experience. This could help improve skills and productivity in the public sector.”
“A commitment to a social compact and reduction in executive pay by big business might also make the government more accommodating with respect to concessions on labour market rigidity. Given the seemingly unrestrained power of the unions at present, this may seem like a long shot, but it is right that big business should take the first step.”