Demise of corporate conscience deadlier than listeriosis itself
Given how low our expectations of corporate governance have become, we should perhaps applaud Sanlam CEO Ian Kirk’s decision to cut his bonus and that of 100 employees because of the insurer’s exposure to Steinhoff International’s meltdown. It’s a gesture alright, and while the percentage cut, in his case 20%, does read as rather punishing, is he really taking much pain, especially as those on the lower rungs of his business are getting no bonuses. Before the decision to “slash” his bonus, he would have earned R12.5-million, now he is set to get R10-million. Now, if you were to ask anyone you know whether they’d be happy to accept a R10-million over a R12.5-million bonus, I am sure you wouldn’t get much of an argument.
So, while we should give kudos to the executives at Sanlam for taking some sort of accountability for what were clearly bad judgment calls in the case of Steinhoff, it looks like a rather insignificant slap on the wrist. And one wonders whether Rand Merchant Bank, owned by FirstRand, along with the likes of Standard Bank and Investec have done something similar, as these were lenders lending to that erstwhile gentleman, Markus Jooste, the disgraced former CEO of Steinhoff whose whereabouts are still unknown.
Millions of South Africans were exposed to the collapse of the retailer. Today its locally listed shares are more than 95% off their alltime high reached in March 2016.
Accountability is something that seems to be missing from both corporate South Africa and the public sector, the fallout of which we’ve seen across news pages for an eternity it seems. This week, Tiger
Brands, that giant of an institution that’s in our everyday lives no matter where we shop, had two of its plants implicated in the possible deaths of about 180 people.
While the nearly 100-year-old manufacturer has put out a statement claiming that it was “deeply concerned” about the listeriosis outbreak and that it was closing the two plants that have been singled out by health authorities, there’s very little in the way of actually accepting some possible responsibility. No empathy, and still a flat-out denial that its produce was directly responsible for any of the deaths.
When the story broke I expected to see the company’s chairman, Khotso Mokhele, leading on the matter and taking board responsibility for the contamination at its plants. South Africa is not quite
Japan, so a massive board resignation — which would be expected in one of the world’s biggest economies — is not something we are likely to see here. But at least some leadership.
This week, the chief executive of Japan’s Kobe Steel resigned over a data fabrication scandal that further dented the image of corporate governance and culture in that country. That’s a resignation for tampering with data.
Perhaps it’s too much to ask so soon for some personal responsibility to be taken by the men and few women at the helm of Tiger Brands, but does it warrant defensive posturing? Surely that’s not good enough at this time, when families are burying toddlers in the wake of the food-poisoning scandal.
Mokhele, the company’s chair for more than a decade, who is also responsible for social ethics according to the firm’s website, has not taken the lead. When US civil suits against big tobacco began in the ’50s, lawsuits employed a range of legal argument, including that manufacturers of cigarettes failed to act with reasonable care in the making and marketing of their product — that companies such as Philip Morris, the world’s biggest, made and marketed a product unfit for use.
Given that listeriosis has been found to be a problem for Tiger Brands, perhaps even before this latest crisis, it will be interesting how it answers the legal argument it may face.
Perhaps I’ve been too hard on Ian Kirk, a well-regarded CEO, but what corporates have to ask is: is it an act of real accountability or just great PR? If it’s the latter, rethink it.
Massive board resignation is not something we are likely to see here