Wake up, boardroom: Tenderpreneurship can eat your business alive

Tenderpreneurship is a cancer in South African business. The practice involves using insider knowledge and undue influence, in various forms, to secure a contract where the procurement process is through a request for tender/quotation (RFQ). We’re used to seeing it in the headlines – cronies, comrades, cadres, criminals gaming the system, exploiting loopholes, and walking away with lucrative contracts. And often, delivering NOTHING.

Picture this: A group of entrepreneurs establishes several businesses to serve a key client. It is agreed that each business will focus on the facet of this supply chain. When a lucrative contract goes to tender, one of the shareholders – despite clear agreements and ethical boundaries – puts in a bid that undercuts the bids within this group, using inside knowledge and influence to win the award. It’s not just a technical breach; it’s a betrayal of trust and a textbook case of tenderpreneurship.

This isn’t an anomaly. It’s a pattern that repeats itself in more boardrooms than you think, where self-interest trumps accountability and governance is treated as a box-ticking exercise.

What happens when the tenderpreneur is sitting at your boardroom table, hiding behind the veneer of legitimacy or shareholder status?

The Enemy Within

The most dangerous tenderpreneurs aren’t outsiders; they’re insiders in the form of directors, shareholders and founders. They are people who know the rules and choose to bend or break them for personal gain. Their actions corrode trust, undermine governance, and put the company’s future at risk.

If you think that your board is immune, think again. Culture is not determined by the vision and mission statement on the notice board. It is what you do and what you allow to be done. That starts at the top.

No More Excuses

When unscrupulous behaviour surfaces, the board’s duty is not to “manage the optics” or “keep the peace”. It has the duty to act decisively, transparently, and in the best interests of the company. The law is clear, and so are the principles of good governance:

• Act in the best interests of the company; not in those of a shareholder, not yourself.
• Exercise independent judgment even if it means standing alone.
• Avoid and expose conflicts of interest. Don’t just declare them; deal with them.
• Disclose personal financial interests i.e. ensure that there are no secrets.
• Act with care, skill, and diligence not just when it’s easy, but especially when it’s hard.

Lessons for Boards and Shareholders

There are numerous examples of tenderpreneurs in the media, with more and more being discovered and publicised. Key take-aways for boards and shareholders from what we have seen over the years include:

• Stop assuming good faith. Test it. Enforce agreements. Don’t let “family” or “legacy” be an excuse for bad behaviour.
• Act fast and act publicly. Silence is complicity. If you see something, say something, and do something.
• Put the company first. If you can’t, step aside.
• Strengthen your governance. Review your policies, train your directors, and make it clear: There are consequences for crossing the line.
• Communicate openly. Let shareholders and stakeholders know that the board is not asleep at the wheel.

Time to Call Out the Rot

If you’re a director, ask yourself: Am I willing to call out the rot, even if it means making enemies? Am I prepared to put the company’s interests above my own comfort, relationships, or reputation? No? Then you’re part of the problem.

Tenderpreneurship thrives in silence and complicity. The only antidote is courage from boards that are willing to confront, expose, and root out unethical behaviour, no matter where it hides. If you’re not ready to do that, maybe it’s time to find another seat.

Image: © aflo images via Canva.com