The Steinhoff disaster is already being referred to as South Africa’s very own Enron, which, at the time, was America’s biggest corporate disaster. If you wish to read only one business book or view a single documentary, let it be Enron: The Smartest Guys in the Room. In Enron’s instance, as I recall, only one person on its board did not go to jail. It would be interesting to see the censure, if any, that would be meted out to members of the Steinhoff board.

It is mind-boggling that fraud on such a scale could be perpetrated in a company which has 13 board members, six of whom are chartered accountants (who proudly display the CA(SA) designation). Collectively, the board members have 35 university degrees. The Steinhoff board is teeming with people who once led South Africa’s best-known companies, with one member having served on the King Committee on Corporate Governance. Add to this the fact that Steinhoff’s external auditors in recent years were, and continue to be, the top two of the big four accounting firms. Seemingly, they both missed what was happening at Steinhoff. At the time of writing, Steinhoff’s CEO had resigned, but the CFO remained in his position.

But, if the smartest guys were not in the room, what about those outside – the fund managers, the supposed counterbalance? These are the people who should have done their homework before convincing unsuspecting investors to invest in Steinhoff. What does the Steinhoff disaster say about South Africa’s fund managers? How easy is it to deceive them? Were they so impressed by the stature of the Steinhoff board members that the mere sight of the board members convinced them to invest?

What will happen to the smartest guys in the room? Other than possibly having their egos bruised, I am afraid that nothing will happen to them. They have made their money, and it is well protected. It is said that, in business, you should never use your own money.