I watched the Wits University panel discussion on the KPMG debacle last Wednesday with keen interest. On the heels of this massive failure within the auditing profession through the actions of KPMG, here were South African leaders in their respective areas tackling the issue openly, publicly and head-on.
It was refreshing to witness an attempt to learn from this massive failure, which has ramifications way beyond the auditing profession. Maybe if we changed our attitude and took the endless incidents of failure which have been compressed into the last decade, we would learn lessons worthy of a whole century!
The talk was largely about corruption, not just in the public sector as usually is the case, but in the private sector and mostly among people with the expertise, skill and clarity on how modern economies are run.
However such skill and clarity has not necessarily been a flag carrier for fighting corruption. The auditing profession, as well as the private sector in general, have been involved in many scandals of corruption over the years.
During his address, former finance minister Pravin Gordhan mentioned how the past two years has seen financial and advisory firms fined over $200-billion in fines. Bell Pottinger, McKinsey and SAP have also featured prominently in despicable conduct causing massive damage in the process.
Also fresh in our minds is the bread price fixing scandal, construction sector collusion, and many other private sector scandals.
The panelists asked pertinent questions and extracted important lessons from the KPMG debacle.
Certainly the questions cannot be left at that. These questions must spur the citizens of this country into action, working towards practical solutions to the systemic and practical challenges facing our economy and our society.
“State capture is about national resource capture and the appropriation of money through money laundering and racketeering where professionals assist, aid and abet.
“Professional bodies need to take a tough look at their actions, especially with the ethics gap growing.”
These were the words of former minister Pravin Gordhan who, together with economist Iraj Abedian, made it clear that, in modern economies, it is not possible to steal without the express assistance of professionals like auditors and others who make it possible to hide their illicit activities.
Abedian went a bit further. Almost as if answering the now entrenched attitude which labels politics as a “dirty game”, thereby encouraging the citizenry to allow politicians unchallenged impropriety, Abedian highlighted the central role played by ethics in the modern economy.
“Without ethics, we have nothing, nothing!”
Thank you, Iraj Abedian. This statement, perhaps is the most pertinent statement in today’s world – both in South Africa and worldwide. Ethical conduct and subscription to ethics is the one thing which has been the bedrock of every human struggle.
It was morally reprehensible to have a government which stole from some to give to some on the basis of skin colour, so we fought against it.
It is still as morally reprehensible to have a government which steals from citizens to feed the political elite and their business friends, so we will fight it. Civilisation, human development and our future as the human race, hinges on the moral desirability of these pursuits.
This, which is morally desirable, cannot be achieved through immoral and unethical means.
What has often been misunderstood by those who have taken up leadership after 1994, is to think that ethical conduct is a modern or at worst a Western concept. Yet no civilisation and no culture has been without ethics as a central element in its development.
In our own history, our development and culture as people of African descent, ethics have always been central. Another problem is the idea that government can in any way be excused for corruption because government is being corrupted by the private sector. The state exists to coordinate the activities of man and give oversight. So the need for the state to conduct itself in an ethical manner far outweighs the need for the private sector to do the same.
The state has to occupy the moral high ground, otherwise there is no need for the state to exist.
In essence, no amount of systemic structuring or establishment of appropriate structures will ensure that such structures and their protocols are followed unless we are able to re-establish the undeniable importance of ethics in everything we do. This is our real struggle!