Dealing with the Lack of Ethical Leadership in State Owned Enterprises
By Dr Reuel J. Khoza I 01 December 2025
1. Introduction: The Moral Imperative
The question often posed is whether it is too late to restore ethical leadership in State-Owned Enterprises (SOEs). The answer must be unequivocal: it cannot be too late, and it dare not be too late. Ethical leadership is not a luxury but a necessity. As Martin Luther King Jr. reminded us, “The time is always right to do what is right.”
Ethics, defined as the moral principles that govern behaviour and organisational conduct, is the cornerstone of sustainable governance. Morality, the deep concern with right versus wrong, must underpin every decision within SOEs. Without this foundation, institutions collapse under the weight of corruption, incompetence, and abuse of power.
2. Prelude to Ethical Behaviour in SOEs
The erosion of ethical conduct in SOEs has been systemic, cascading from ministerial leadership through boards and executive committees down to operational staff. The government, as shareholder, has too often set a corruptible tone, creating fertile ground for unethical practices. The metaphor of the “fish rotting from the head” captures this reality: when leadership is compromised, the entire institution decays.
3. Genesis of Unethical Behaviour
To address the crisis, one must first understand its causes:
- Weak work ethic entrenched in organisational culture.
- Incompetent political deployees lacking ethical compass or managerial skill.
- Traits of failed leadership, including:
- Intemperance and callousness.
- Corruptibility, manifesting in cheating, stealing, and abuse of resources.
- Use of pain and coercion as instruments of control.
Unethical leadership has crept in surreptitiously, eroding trust and legitimacy. Left unchecked, it metastasises into systemic dysfunction.
4. Decisive Action: Deep Surgery
Incremental reforms are insufficient. What is required is decisive, surgical intervention:
- Ruthless confrontation of unethical practices.
- Removal of corrupt leaders and rebuilding of governance structures.
- Institutionalisation of ethical leadership as a non-negotiable standard.
This requires political will, courage, and a commitment to transparency.
5. Partnerships for Renewal
The private sector must not be viewed as an adversary but as an ally. Big business, when engaged constructively, can provide expertise, resources, and accountability mechanisms that strengthen SOEs. Collaboration between government and business should be anchored in transparency, shared values, and a commitment to national development.
6. Consequence Management
Ethical renewal cannot succeed without consequence management:
- Zero tolerance for corruption, incompetence, and abuse.
- Clear accountability mechanisms that punish unethical behaviour and reward integrity.
- Institutional culture shift where ethical conduct is the currency of leadership.
Without consequences, reform efforts will remain rhetorical and ineffective.
7. Conclusion: The Time is Always Right to Do Right
The restoration of ethical leadership in SOEs is urgent but achievable. It requires understanding the genesis of the rot, confronting it decisively, and embedding ethics into the DNA of governance. Reform is not optional; it is an existential imperative.
The time is always right to do right. Ethical leadership is the cornerstone upon which sustainable, credible, and effective State-Owned Enterprises must be rebuilt.