Deloitte examines corruption scandals at latest risk conference

07 October 2019 2 min. read
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Deloitte has held its annual risk conference in Africa, and has chosen to focus on the theme “The State of Governance and Ethical Leadership” this year. The topic was selected to turn discussions among business leaders towards the rampant corruption reports and institutional compromises in South Africa.

A range of scandals have unfolded in South Africa over the last two years, implicating a number of actors, ranging from politicians to business leaders. The Gupta scandal in 2017 – which implicated high-profile consulting firms, the President and a leading South African business, among others – was among the largest to hit the country.

Others include the scandal at retail giant Steinhoff, and state capture scandals involving the South African Revenue Services and Bain & Company. The stream of scandals has driven up the risk profile of South Africa as an investment destination, while similar incidents across the region are leading to a similar scenario across the continent.

Deloitte examines corruption scandals at latest risk conference

Deloitte has chosen to address this rising risk profile in its latest Risk Conference. According to Risk Managing Partner at Deloitte Africa Navin Sing, there is a need to reign in the “tide of destruction that has hit South Africa,” referring to the scandals. Simo Lushaba, Director at gold mining company Harmony Gold, had a number of comments to make at the event.

“It is unfortunate that we tend to talk about this topic of governance and it has gained popularity over the last decade, but as a result of corporate failures, accounting scandals, fraud, corruption and most recently State capture allegations has ruthlessly attacked particularly our procurement and recruitment processes in our organisations,” he said.

Lushaba pointed to the leadership of the implicated organisations as the source of the problem, stressing that it was their responsibility to steer away from illicit activity, at the very least. Some of the scandal-hit firms immediately changed their leadership after being exposed, and have done so again several times since.

“Not doing wrong is merely the beginning of leadership’s responsibility to create prosperity and value. Effective leadership does not define itself on how much wrong you do not engage in. Nothing short of corporates delivering value for every shareholder defines good governance,” said Lushaba.