Coun­ter­ing the kan­ga­roo court

Nene was axed more for what the ‘Zup­tas’ did than for any­thing he did

Financial Mail - - BOARDROOM TAILS -

Ay­oung friend who is about to sign up with one of the big four ac­count­ing firms told me her big­gest fear is be­ing asked to ac­com­mo­date some small dis­crep­ancy in fig­ures she has to au­dit. She wasn’t virtue-sig­nalling or sug­gest­ing she might be more eth­i­cal than the next per­son, or even the next au­di­tor. She is wor­ried about a dilemma she might face in the fu­ture: does she stick rigidly to her tick­ing obli­ga­tions or does she al­low for some slack? And if she al­lows for slack, how much? Or are au­di­tors now be­ing watched so closely that there is ab­so­lutely no tol­er­ance for even a sliver of slack?

I couldn’t make out if her con­cern about gover­nance im­pli­ca­tions of her use of dis­cre­tion is re­ally good news or re­ally bad news. It cer­tainly seems to be at odds with what I was told some years ago was the pop­u­lar view among ac­count­ing stu­dents — that hav­ing to study stuff like busi­ness ethics and cor­po­rate gover­nance was a bit of a drag and rather point­less.

Now it seems study­ing be­yond the strict con­fines of ac­count­ing or busi­ness is thought to have some use.

But it’s dif­fi­cult not to sus­pect that busi­ness ethics and gover­nance are be­ing stud­ied for no bet­ter rea­son than to get an in­di­ca­tion of how to play the sys­tem.

Cer­tainly, gover­nance and ethics have suf­fered as much a drub­bing as au­dit­ing has over the past few years. Ev­ery com­pany caught out in one of the high-pro­file scan­dals signed off on the King code. Oak­bay proudly dis­played how much it ad­hered to all the code’s rec­om­men­da­tions. KPMG even as­sisted listed com­pa­nies to ful­fil their King code box-tick­ing du­ties.

The prob­lem is that the codes get thicker and the au­dit­ing obli­ga­tions heav­ier with ev­ery cor­po­rate scan­dal. And then we dis­cover the dodgy be­hav­iour has merely ad­justed to ac­com­mo­date the new re­quire­ments.

De­spite all the new re­quire­ments, firms col­lapse, share­holder wealth is de­stroyed and al­most no­body is held to ac­count. And we get an­grier and shriller in our de­mand for ret­ri­bu­tion.

It’s the same in pol­i­tics. Af­ter 10 ter­ri­fy­ing years we’ve man­aged to un­seat for­mer pres­i­dent Ja­cob Zuma, but we haven’t been able to pun­ish him.

The frus­trat­ing sense of dis­em­pow­er­ment has cre­ated a kan­ga­roocourt men­tal­ity. There is lit­tle doubt that large num­bers of pri­vate and pub­lic sec­tor em­ploy­ees should be put be­hind bars. But we’re now de­mand­ing pun­ish­ment for any­one who has demon­strated lapses in judg­ment.

As­sum­ing we have most of the in­for­ma­tion that is avail­able to the pres­i­dent, there’s lit­tle doubt Nh­lanhla Nene was pun­ished more for what the Gup­tas and Zuma did to this coun­try than for any­thing the for­mer fi­nance min­is­ter did. It seems wrong, even al­low­ing for his ex­alted po­si­tion, that Nene was axed for do­ing what at least 95% of us would do — suc­cumb to the per­sis­tent bul­ly­ing of a thug­gish boss.

Per­haps in­stead of look­ing for more heads to roll and more laws to in­tro­duce, what we need is more ef­fec­tive man­age­ment of the “slack” my young friend de­scribed. Not the de­gree of slack that would threaten an in­sti­tu­tion, but the de­gree most of us use to con­duct our daily lives. The de­gree that would al­low her to do a very good job with­out hav­ing to look over her shoul­der con­stantly.

We’re now de­mand­ing pun­ish­ment for any­one who has demon­strated lapses in judg­ment

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