Ann Crotty Writer-at-large
Picture: ISTOCK
Picture: ISTOCK

It is an absolute waste. Hundreds of billions of rand of investor funds are wiped out and the reputations of many business icons are destroyed. The question is, was the Steinhoff implosion inevitable? And if it was, at what stage did it become so?

As each dramatic twist of the story unfolds, you have to wonder: what does corporate governance hope to achieve? Under what circumstances, if any, is it appropriate to allow talented, driven individuals to manage hefty chunks of the savings of millions of investors? The question goes to the essence of the agency theory that lies behind shareholder capitalism.

The fact is that a frightening number of top business people, globally, are not only not very pleasant but believe they are accountable to no-one. Even more frightening is the possibility that their success rests on the fact that they are not very pleasant.

They are driven by emotions the majority of us have in modest amount. The desire to achieve, to win and to be rich, or at least better off, most of us are familiar with. In a world obsessed with material consumption they are emotions we cannot afford to ignore. The most successful business people have them in spades. What they don’t seem to have is counter-balancing emotions, such as compassion, which would ensure they do not wreak mayhem on society.

A frightening number of business people are not only not very pleasant but believe they are accountable to no-one

Read the biography of any leading business person and you’re likely to cringe at the appalling antisocial behaviour. An extreme case is Steve Jobs. He was filled with anger that presented in radical egocentricity. And yet, through Apple, he left an overwhelming legacy.

Should those around him have been expected to tolerate his intolerable behaviour? Is the chilling reality that if Jobs had not been so obnoxious he would not have been so productive? If the world consisted of decent humans with modest ambitions, would we still be cave dwellers?

Jobs is an extreme case. But it looks as if a number of CEOs of more modest talents exhibit similar disturbing personality traits. Amazingly, it seems to make little difference whether they are the creators behind their businesses, have merely assumed the mantle of leadership or are within reach of that much-vaunted position. Our corporate leaders, like our politicians, cling to the company of like-minded individuals, to people who assure them they are making an amazing contribution to society. This must surely be the ideal breeding ground for hubris.

Most of the time this hubris just ends in the awarding of inappropriately generous remuneration packages to the CEO and his cronies. In extreme cases, such as African Bank and Steinhoff, it ends in wholesale destruction.

Controlling extreme egocentricity and preventing hubris is one of the key unstated objectives of corporate governance. It is an attempt to ensure people in powerful positions behave according to a code society believes is acceptable, a code that protects us from the destructive inclinations not of capitalism but of capitalists.

It shouldn’t be necessary — but unfortunately leadership often seems to attract the worst sort.