Corporate governance gets a lot of attention, particularly in the aftermath of the Enron and Parmalat scandal, and recently in SA the Fidentia scandal.
And yes, good corporate governance is crucial, but one crucial element seems to be missing - the responsibility of a company to its staff.
Citibank recently announced plans to reduce its staff by 17 000 (about 5% of its workforce from what I recall), not because the company is in financial trouble, but because apparently it's not making enough money. Enough money for whom?
Granted I haven't seen any information on how this reduction is to be carried out, but I certainly hope it's through attrition and voluntary redundancies, rather then actual retrenchments.
The company I work for is no different. Some months ago it went through a restructuring exercise with forced redundancies. The amount of upheaval and bad feeling it created was tremendous, and still has ramifications in how staff perceive the company. This from a company whose net profit is over $1 billion (no small number in SA terms), and where staff turnover is easily high enough to achieve the same staff reduction effect in less than a year, without the negative feeling that it created.
Profit is being put before people, for the sake of more money, and most companies still view staff as liabilities rather than assets. But without good staff the business can't perform, and if everyone's in fear of losing their job in the next restructuring exercise, you can bet most of them are on the lookout for other opportunities.
I was studying last year and one of the modules focused on customer service, and the obvious importance of staff in the equation. One of the companies that was brought up was Johnson and Johnson (if I remember correctly), and they hold their stakeholders in this order of importance: staff; customers; shareholders.
This seems sensible as if you treat your staff well then customer service should improve, and if customer service improves that should lead to greater satisfaction among customers which should lead to improved company performance.
In most companies the pecking order is completely reversed, and then companies wonder what the problem is with their people management practices.
