Edition: Sept - Nov 2013
Head of new ASISA Foundation outlines its central function. She has a real job on her hands. Codes are wonderful things provided signatories cooperate to ensure their optimal impact.
With all the regulation in the world – and, heaven knows, the SA financial sector has plenty of it – regulations in themselves aren’t the sole determinants for public confidence. Not only do regulations require effective enforcement and compliance, at considerable cost not least to the regulated institutions, but ultimately confidence turns on the stability of the society in which they operate.
This is an underlying rationale for the Financial Sector Charter (TT March-May). It’s a recognition that social stability cannot be left single-handedly for government to promote. Growth in savings and investment, as a backbone for the nation and as an incentive for depositors, is reliant on growth in returns that is itself reliant on growth in the economy.
If that’s all motherhood and apple pie, it nevertheless needs to be re-emphasised. For it highlights the role that financial institutions must play in strengthening the environment of their operations. This is for their own good and for the social good, additionally and perhaps most immediately for the good of the public money with which they’re entrusted.
Quick to take up the cudgels, having anticipated gazetting of the Financial Sector Code for black empowerment, is ASISA. This industry body, representing the savings and investment institutions other than banks, has launched two vital initiatives. One is the Enterprise Development Fund, whose progress will be followed in due course. The other is the Foundation, to focus on consumer financial literacy, where Ruth Benjamin-Swales has been appointed the chief executive.
Benjamin-Swales . . . soft talk, hard resolve
Institutions that haven’t yet been approached by Ruth can expect calls. Or call her, to hurry the process of collecting scorecard points for external rating and verification.
By way of introduction, Ruth is a chartered accountant whose work experience includes senior audit positions at Gobodo Inc and Ernst & Young, and in the office of the Auditor-General. She also has a respectable record in non-profit service: president of the SA Institute of Chartered Accountants in the southern region, chair of the Public Accountants & Auditors Board, vice-chair
As a personality, her gentleness seems almost to disguise her determination. “The Foundation was established to take advantage of the synergies in collaborative effort to achieve common objectives,” she says. “Through members pooling resources and sharing expertise, as well as the leadership and governance afforded by individuals passionate about transformation, the potential to impact positively on society is great. I want to be part of it.”
A main challenge is funding, although the code provides that all members must spend at least 0,3% of net after-tax profit on consumer-education programmes during this year and 0,4% from next year onwards. Because a transition period has been allowed, ASISA members aren’t rushing to pool their funds in the Foundation.
Also, the percentage of taxed profit to be spent is part of the 1% to be spent on socio-economic development (also referred to as spend on corporate social investment). This generally implies a reduction in the minimum spend/contribution to CSI from 1% to 0,7% where ASISA members have already committed medium to long-term budgets for their CSI recipients.
Moreover, it isn’t mandatory for members to contribute to the Foundation. Larger entities, which already have the capacity, might prefer to run their own programmes.
This is not optimal. Pointedly, she notes: “Insufficient funding limits the Foundation’s ability to implement programmes with significant impact and reach. It’s the key differentiator between combined institutional resources and respective individual efforts.”
These aren’t challenges that Benjamin-Swales will accept with quiet acquiescence. Neither should she, for the benefit of the institutions themselves.