ETHICS
Steinhoff's red flags show effective leadership has a bigger role than governance codes
How could the Steinhoff accounting scandal have happened after governance codes were tightened and additional emphasis placed on auditing after the Enron collapse and the 2007-08 financial crisis? Former Steinhoff chairman Christo Wiese says he would like to learn how these controls can keep a check on a committed fraudster. "You cannot run a business if the directors have to check the books. No matter how many codes and gate keepers there are — if there is a committed, talented fraudster you have a huge difficulty. I would like to learn how to overcome this." Wiese says Steinhoff complied with all auditing, stock exchange and governance regulation. He acknowledged in an interview with the Financial Mail in May that, "I don’t know what I would do differently. "All the right [reporting] structures were in place, and the auditors signed everything off … all three members of the audit committee had doctorates in accounting." Yet the warning signs at Steinhoff were evident to some. In 2...
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