On December 21 2017, a company called Ayo listed on the JSE. That night, I tweeted about how surprising it was that anyone would list a company at that time of the year when South Africans had all but disengaged from matters of that nature.
History would later confirm that the Ayo transaction was in fact no ordinary listing. Its genesis and eventual conclusion formed a central part of the commission of inquiry into the Public Investment Corporation (PIC). The various role players — ranging from an unknown assistant manager, Victor Seanie, PIC executives whose commitment to due process was fleeting at best, and the CEO who may or may not have been friends with Iqbal Survé — all offered different versions of the story.
Whether the investment should have been done at all remains debatable. What is indisputable is the reality that large organisations dominated by even larger personalities have an element of undesirability wherever you look. From Christo Wiese’s presence and Markus Jooste’s buccaneering at Steinhoff to Trevor Manuel’s antics at Old Mutual and the centralisation of power in the hands of Matshepo More and Dan Matjila at the PIC, the corporate culture that cultivates and enables such personalities requires scrutiny.
Reluctance to defy instructions from the top — no doubt motivated by anxieties about job security — leads to a gradual and systematic erosion of due process and creates a culture of ratification in lieu of due process
A key feature of corporate accountability and oversight is the fluidity of the flow of information. In projects that require operational implementation and strategic oversight, a breakdown in such information flows is dangerous.
Employees at the operational level enjoy greater proximity to the actual nature of the work. This should enable them to provide feedback to the strategic decision-makers, which in turn enables proper decision-making. In far too many instances the pursuit of margins and deadlines creates anxiety, leading to information being sanitised to avoid conflict.
This is common if the big leaders are inaccessible and unchallengeable. The PIC example indicated a culture of the big man whose authority was supreme and subordinates whose capacity to challenge decisions had been eroded over time. In such an erosion, the exceptional becomes normalised and decisions are ratified by the proxy of personality. Perversely, in this breakdown of information exchange, the seniors can plead plausible deniability on the basis that the information never filtered to them.
Seanie’s testimony illustrated this. Reluctance to defy instructions from the top — no doubt motivated by anxieties about job security — leads to a gradual and systematic erosion of due process and creates a culture of ratification in lieu of due process.
Cathartic experience
It is not unique to the PIC. It was a junior accountant who picked up the anomaly about the wedding expenses in KPMG’s Gupta audit. It was Sherron Watkins who authored that memo to Ken Lay at Enron in 2001; and it was Themba Maseko who first blew the whistle on the Gupta-Zuma alliance.
In all these cases, the institution should first address the issue at hand and then confront the underlying culture that enabled the issue to occur. Cases of this nature can serve to highlight flaws in individual conduct but also show systemic issues within the organisation. This serves as a diagnostic and cathartic experience.
In this case, the PIC seems to have missed the point of what it ought to have learnt from the inquiry. Among the role players in the Ayo transaction, Seanie had the least influence and power. His narration of the events sheds light on the plight of the juniors in dealing with authoritarian managers. And yet in its wisdom the PIC board has deemed it fit to dismiss him.
The problem with that stance is that it implies the board is of the view that a junior assistant has the type of powers that could lead to the PIC making an investment of billions with all accountability resting with him. If that is to be accepted, the PIC’s systems are far more broken than we thought.
• Sithole (@coruscakhaya) is an accountant, academic and activist.
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