The South African Financial Services Sector Charter

John Paul — Thu, 08 Dec 2005 10:02:30 -0500

Session Title:
Government Regulation & Public-Private Partnerships

Date of talk or publication:
2005

Speaker Name / Title:
Bruce Scott, Robert Tucker & Thomas Mondschean

Organization:
Harvard Business School, Standard Bank of S. Africa & DePaul University

Description:
In August 2002, the South African Banking Council, facing the threat of government imposition of a mandatory charter of black empowerment and repeated protest demonstrations in front of its offices, decided to negotiate directly with black employee and community representatives under the auspices of the government and thereby avert a series of meetings in which it would inevitably be in a defensive and largely adversarial position. Ten months later it had reached an agreement on a set of principles for a voluntary affirmative action charter covering the financial services sector. The charter, which creates an addition to the market framework for the financial services sector through which banks can compete with one another to gain competitive advantage by addressing societal concerns not previously included in the market framework, differs significantly from charters imposed by the government on six other sectors and, unlike the U.S. CRA legislation, which sets targets and penalties for compliance failure, establishes rewards for superior performance that offer the possibility that it will harness the competitive energies of the various financial institutions.

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The South African Financial Services Sector Charter