Maybe there’s more, maybe not
Is cronyism and self-dealing unique to some SA firms?
Aheadline reading “The vast majority of Jselisted companies are law abiding, with reasonably effective corporate governance systems in place” is hardly one to sell newspapers. In the same way “No-one in the ANC was caught with a finger in the till today” would not attract many readers.
The sad reality is that everyone, not just journalists, tends to focus on big, dramatic stories. We seem intent on spooking ourselves, rather like children transfixed by a scary movie.
Such is the pace of progress in communications that we now have immediate access to details about every financial swindle, political scam or flood anywhere in the world. This makes it almost impossible to determine whether we are living in a more corrupt and dangerous world than before or are just more in touch and more aware of events than before.
In addition, when it comes to financial and political wrongdoing, the spread of 20th-century Western-style democracy makes us less tolerant and more questioning of our leaders.
The fact is, it’s impossible to say whether the vast majority of Jse-listed companies are law-abiding and have effective corporate governance systems in place. We would like to think it is so. And every corporate governance box-ticking exercise that is completed may provide some comfort — though considerably less than previously. We might feel overwhelmed by all the wrongdoing grabbing the headlines, but what if it is only the tip of the iceberg?
Is it possible that what looks to outsiders like cronyism and self-dealing, which are such dominant features of the stories about Resilient, Steinhoff, KPMG and so forth, are unique to them? Or is this an accepted part of business in SA and globally?
Investec Bank provided the funds for MD Bernard Kantor to invest in the Cape Town property that was sold to Steinhoff just days before that company imploded. Investec is satisfied there was no breach of the group’s policies and processes. But Kantor was a full-time executive at a large bank, for which he was very well paid. How did he have time to be engaged in large private investment projects?
And former Steinhoff CEO Markus Jooste was part of so many private deals, including those related to race horses, that it’s hard to imagine how he kept down a full-time job, let alone one that involved running the secondlargest furniture retailer in the world.
Similarly, executives at Resilient seemed to be engaged in a lot of private business transactions.
A less scary thought is that perhaps we know about this only because of higher standards and better oversight. Much of what shocks us today was not even seen as wrong before.
There is a tendency to believe the Jacob Zuma presidency dragged business as well as politics into a dark and corrupt place. No doubt Zuma has triggered a certain amount of corruption fatigue; but blaming politicians for the failings of business seems disingenuous. Perhaps the undramatic story is that right now lots of listed companies are trying to be better corporate citizens — but many are not.
We might feel overwhelmed by the wrongdoing grabbing the headlines but what if it is the tip of the iceberg?