The tender process was no problem for a firm wedded to open disclosure. However, the growing frequency of such enquiries suggests companies - including clients of Matigari-Integrated.bmc - face a potential minefield.
How does one advise a client on potential damage from a conflict of interest?
Seven factors stand out:
1. Take this seriously: You can be damned by a simple, factual headline; e.g. 'Director admits conflict of interest'. Such disclosure ahead of a transaction is an act of honesty, but can sound sordid. If you look bad when acting correctly, image the fall-out if you actually do something wrong.
2. Honesty the best policy: When re-visiting corporate governance, put special emphasis on open disclosure of financial interests.
3. Inadvertent conflict can happen: Act energetically to retrieve the situation. Give full disclosure and a full explanation of how it happened.
4. Don't prevaricate: When fielding media enquiries gather all the facts and make a simple, sincere statement.
5. Tonality is key: Defensiveness rarely helps. The right tone is vital. Tricky Dicky (former-US President Nixon) set the standard when his 1952 run for vice-president was endangered by allegations about gifts he'd received in Congress. He admitted he had also forgotten to mention that his family had been given a puppy called Checkers. He was sorry for the slip, but if no one minded the wife and kids would like to keep the dog. Nixon won public sympathy. He and Eisenhower then won the election.
6. Treat PR consultants like adults: Sometimes directors engage in private negotiations that might create a conflict. In confidence, tell the PR firm in good time. Prepare for enquiries; don't be surprised by them.
7. Conflict can be resolved: SA has a small economy and a limited pool of business leaders. There is understanding for the fact that many business personalities have wide interests. Once open disclosure is made, you can build 'Chinese walls' and strict protocols to manage the conflict.
All of the above applies with added force in the communication industry.
Ownership structures are expected to expand as BEE finally catches up with the media sector. To retain credibility, we must be honest about holdings and cross-holdings. Politicians and the rest of civil society will go gunning for us if we don't. There's no conflict on that issue. They'll have a field day.
