South African corporate governance faces more scrutiny

Subject

South African corporate governance

Significance

South African corporate governance has come under intense scrutiny in recent months after the high-profile accounting scandal and fraud allegations surrounding retailer Steinhoff. Separately, a small lender, VBS Mutual Bank, has been placed into curatorship by the South African Reserve Bank (SARB), while auditing firms KPMG and Deloitte are subject to regulatory investigations into alleged complicity in public-private sector corruption.

Impacts

• Prospective new leadership at the South African Revenue Service (SARS) could halt institutional rot and improve revenue collection.
• South African shareholders will demand greater board accountability and fund manager activism.
• The mooted part-privatisation of state assets will buoy investors, but sizeable trade union opposition is likely.