South Africa Reserve Bank: Maintaining Economic Stability & Positive Culture - Essay Sample

Introduction

The South Africa Reserve Bank acts as the central bank. It is responsible for the economic stability of the country and the protection of financial consumers from market failures of the financial institutions. The bank maintains the values of ethics and integrity that establish a positive organizational culture. The central bank of South Africa "Policies and procedures are implemented by trained and skilled staff, and duties are appropriately assigned. All staff members are required to maintain the highest level of ethics in ensuring that the activities of the SARB are conducted in a manner that is beyond reproach. Systems are in place to ensure the safeguarding of, and control over, assets, the economical and efficient use of resources allocated, and the effective performance of all functions" (Rossouw, 2011). To accomplish its goals while maintaining the value of integrity, the SARB has developed and maintains an effective internal system to manage all its financial activities. The system offers reasonable assurance on the reliability and integrity of the management of finances in the bank. The system complies with the established policies and procedures of the central bank.

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The values of ethics and integrity help to improves organization culture by ensuring that the top executives and other employees are behaving in accordance with the policy and compliance requirements. The organizational culture of working within a bank is performance driven. The General Director and the Heads of Departments are under continuous pressure to maintain economic stability in the country and also to ensure currency valuation. It is the responsibility of the central bank to regulate and manage the activities commercial bank. It also protects the consumers against their fraudulent activities that they cause loss of money. The organization culture helps in the establishments of corporate governance. It is the processes and procedures in which an organization is controlled and directed. It contains the following participants: shareholders, managers, board and other stakeholders. Corporate governance stimulates the overall efficiency and performance of the organization including banks by providing good leadership. This improves customer loyalty hence it increases the number of services they provide. Increase in service production results to more revenues hence the shareholders benefit from higher paid dividends.

Although the SARB is a non-profit maximizing organization, it generates income from various activities. It endeavors to meet the costs of operations to make reasonable surpluses to build capital reserves. Nevertheless, sometimes it incurs losses after executing hue public responsibilities. However, most are the times when the SARB make surplus where the pay taxes and pay "not more than 10 cents per share per annum to shareholders" (Rossouw, 2011). A consistent ethical behavior maintains a positive public image and this is a benefit to the shareholders because it boosts their confidence that they will not suffer losses.

The central bank of South Africa must operate on ethical and honest grounds by respecting the environment, treating employees and customers fairly. Moreover, they must operate under fair prices that are not too high for their consumers. The shareholders of the central bank of South Africa enjoy healthy profits as a result of positive ethics in the organization culture. The customers are loyal to the bank because they are treated equally with fair prices. The employee morale is also promoted hence this increases their productivity and innovation within the organization (Delloitte, 2009). The bank is not only honored in South Africa but also internationally and this yields to more returns to the shareholders. The shareholders are confident with the operations of the bank because they present true information about their financial practices (Mminele, 2014). The shareholders can detect whether the internal control of operations is effective or not depending on how managers and directors relate with the customers. The shareholders are not worried about unpredictable lawsuits that would force them to hire lawyers. When the organization is honest in its operations there are no or reduced potential lawsuits which are a financial liability. Discrimination is one of the major causes of many lawsuits in the current world where one financial institution may claim being overcharged for a service (Leonard, 2019). Some financial institution may also complain of being denied a service that is offered to others and in such a case, the shareholders may be forced to raise funds to process the lawsuit.

References

Rossouw, J. (2011). South African Reserve Bank: Commemorative publication 2011. South African Reserve Bank, Pretoria.

Mminele, D. (2014). Daniel Mminele: Ethics in finance and financial markets. Retrieved from https://www.resbank.co.za/SiteAssets/Lists/Speeches/NewForm/Remarks%20by%20Deputy%20Governor%20Daniel%20Mminele%20at%20the%20ACI%20Market%20Conduct%20Conference%201%20June.pdf

Leonard. K, (2019). The Importance of Ethics in Organizations. Retrieved from https://smallbusiness.chron.com/importance-ethics-organizations-20925.html

Delloitte. (2009). Ethics and compliance. The advantage of a values-based approach. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/in/Documents/risk/Board%20of%20Directors/in-gc-ethics-and-compliance-a-value-based-approach-noexp.pdf