When Jane Khumalo from Bushbuckridge enters her local bank to invest her pension, she needs to be able to do so with absolute confidence.

She needs to know her investment is secure, and those she is banking with will manage her funds responsibly, prudently and with discipline.

When an investment group decides to purchase shares in a financial institution, it also needs to be able to do so with absolute confidence. It needs to know that its choice of investment is secure, and that its funds will be managed and grown with the utmost responsibility.

When the South African Reserve Bank awards a banking licence, it needs to do so with confidence and full knowledge of the fiduciary responsibilities this entails.

It is for this reason that SA's legislators have laid down stringent requirements for the "fit and proper" behaviour of the directors of financial institutions in the Banks Act.

Integrity is everything. No matter how good our customer service, no matter how well we deal with internet hackers, no matter how efficiently we manage investments, no matter how rapidly we grow our business: if we have no integrity, we have no future.

Within this context we have been required, as one of SA's leading financial institutions, to deal with allegations of corruption against a leading member of our board, former transport minister Mac Maharaj.

As a financial institution, we had three choices when the allegations surfaced: we could have taken the easy way out and argued that the allegations related to a set of circumstances that was none of our business.

We could have sidestepped the issue, and argued that if there were questions about Maharaj's conduct while he was transport minister, these should be addressed by his "employer" at the time namely, the South African government.

After all, when the allegations were first published, there was no suggestion that Maharaj had, since joining the board of FirstRand, been involved in any sort of impropriety. Nor was there any suggestion of impropriety within FirstRand itself.

To take the other extreme, if we had had something to hide as FirstRand we could have accepted Maharaj's resignation there and then.

The hardest choice of all, and the one with the greater reputational risk, was to recognise the tremendous contribution Maharaj has made to the democratisation of our country, as well as to the FirstRand group, to acknowledge that his conduct as transport minister indirectly affected the integrity of the bank, and to investigate the matter in full.

Not because we had an obligation to prove guilt or innocence, or to audit Maharaj's conduct as a member of cabinet: that is the role of the Scorpions, and it is a role they are fulfilling. Rather, because we want our customers, our shareholders, our regulators and the public at large to have faith not just in FirstRand as a financial institution but in the entire banking sector.

As chance would have it, the allegations against Maharaj have grown, and along the way have collected a series of insinuations: insinuations of a "swinging door" that brings politicians into business; suggestions that FirstRand was a beneficiary of contracts granted by Maharaj while he was transport minister; suggestions that we have something to hide for example, the situation relating to the awarding of the N3 toll road contract.

Within weeks, the allegations against Maharaj were rolled into an even larger drama that was playing itself out: a perceived dispute between Deputy President Jacob Zuma and the head of the Scorpions special investigative unit, apparently relating to the South African arms deal, which has dominated the headlines for days.

Significantly, the arms-deal allegations do not relate to Maharaj, and they certainly do not relate to the FirstRand Group.

However, suddenly we have found ourselves embroiled in the broader debate concerning the deal and perceived corruption in other government quarters. And we have started to understand, in its starkest form, the concept of "trial by media".

The chain of events following the publication of the initial allegations against Maharaj confirm s that we took the correct course of action.

We believe we did the correct thing in ordering a full investigation into the initial allegations against a member of our board.

This applies to the initial decision to appoint a team of lawyers to investigate the allegation, and to the subsequent decision to extend the investigation and bring in forensic auditors to ensure the report was based on corroborated facts.

We were correct to apply the terms of reference that were agreed to by Maharaj: to "follow a transparent, thorough and credible procedure and to make a full disclosure to the Financial Services Board and the South African Reserve Bank". Our conduct throughout the investigation was correct, during which we have set particularly high levels of transparency and have continually kept the various interested parties customers, shareholders and regulators fully informed of our progress.

These are not the actions of an institution engaged in a cover-up.

It is, as stated earlier, because of the need for integrity and public confidence in ourselves as an institution, and in the banking sector as a whole.

Having said this, and without prejudicing the situation by going into what the investigative team has found, it is important to comment on our approach to corporate governance and "conflicts of interest".

Concerns have been raised about perceived conflicts of interest regarding nonexecutive, independent directors of FirstRand who sat on the board of the National Roads Agency at the time of the award of the N3 contract.

We have absolute faith that the actions taken by the FirstRand directors who sat on the National Roads Agency Boards are beyond reproach.

Why do we say this?

Because the real issue is not that conflicts of interest may exist, but that it is the manner in which they are managed that is important.

There are a number of ways of dealing with conflicts of interest, which include declaring a significant interest prior to discussion about and a decision on a deal, or even recusal from the discussions and decisions.

These mechanisms are available to ensure individuals have a coherent and common practice in managing potential conflicts.

SA is a sophisticated country. We have highly developed financial institutions, world-class resources businesses, and some of the most soughtafter information technology talent in the world. At the same time, we have suffered a significant brain drain during the past 20 years.

The combination of these factors has left us with a limited pool of senior directors with the wisdom and experience to add meaningful value to major organisations such as FirstRand.

In addition, because we are the largest financial services group in the country, we probably do some kind of business with almost every company on the JSE Securities Exchange SA, and most government or public sector departments. What this means is that at some point, inevitably, we will have a director with a conflict of interest.

Given this scenario (and FirstRand is not alone in this dilemma), facing conflicts of interests is a regular occupational hazard for many independent directors.

It is not feasible to tell our independent directors that once they join the FirstRand board they cannot sit on any other board for fear of conflicts. We must trust them, and the well-established and proven regulatory mechanisms at their disposal, to manage these conflicts in an honest and professional fashion.

Finally, the process relating to Maharaj poses a major test to the credibility and integrity of FirstRand and the banking sector as a whole. It raises pertinent questions concerning the relationship between business and government.

For government, it possibly raises questions about the need for "cooling off" periods for politicians and government officials with business interests, or other ways of preventing the notion of a "swinging door". After all, the integrity of government is also at stake here.

And for business, it raises fundamental questions about corporate governance. It highlights the regular challenges posed by potential conflicts of interest, and the ways in which we can continue to attract informed and "connected" people to our leadership structures.

This is part of a broader debate which needs to take place.

As FirstRand, we will continue to act in the best interests of all concerned. We will continue to act with integrity, openness and honesty.

With acknowledgements to Laurie Dippenaar and the Business Day.