The State Capture saga of the Zuma years was aided and abetted by the corporate sector, which has also had some dramatic failures of governance, including the debacles at Steinhoff and Tongaat. Fixing that is one of the key challenges of the post-Zuma era and was the focus of the Gathering panel on “Big Business, Big Responsibility”.

A live cartoon by artist N.D Mazin (Andy Mason) , at The Gathering 2020, 6 March 2020.

“Governance is like a web,” said Andrew Canter, the CIO of asset manager Futuregrowth. “Governance is not at the board of directors.” He said this web included the shareholders, the lenders, the rating agencies, customers, the free press — witness the #GutpaLeaks and the work by Daily Maverick and others on that front — and the staff.

“Try and tell me that the people at Steinhoff didn’t know what was going on,” Canter said.

The red lights were actually flashing at Steinhoff for a long time.

“We stopped lending to Steinhoff in 2007; we couldn’t analyse their financial statements, they were opaque,” said Canter, who cut a relaxed figure on stage in faded jeans.

He also said that “we avoid bad companies so we avoid losing money”. Just ask Steinhoff shareholders about that.

Professor Wiseman Nkuhlu, the independent chairman of KPMG South Africa who was brought in to help clean up the mess in the wake of its Gupta-linked skullduggery, said part of the problem was that auditing “was just one of many offerings on the menu”.

Adding items such as consulting to that menu brings auditing firms into the embrace of their clients, from whom they should have an objective detachment.

“They need to focus on auditing and it must be the primary purpose of the business,” he said.

The bottom line is that accountability remains in short supply, with corporate malfeasance mirroring the lack of accountability, at least to date, displayed by the politicians who looted South Africa Inc. Governance may be a web, but South Africa’s laws are like cobwebs.

“We manage R200-billion and we can’t even change the system. This is a systemic thing,” Canter said.

Trevor Hills, the Forensics Leader for PwC Southern Africa, said:

“Zero tolerance is zero tolerance. How do we rebuild South Africa? We need to want to see the change. If you see someone doing something wrong, challenge them.”

Canter made the point that the relatively small size of South Africa’s economy meant that the country’s asset managers could actually get together and push for reforms to improve accountability and ESGs — environmental, social and governance issues.

“Responsible capital is an agent for change,” he said.

Nkuhlu drew applause when he said: 

“We must get these people into orange overalls.” The state will need to spin a stronger web for that to happen. DM