Poor corporate governance at State-owned enterprises has become endemic, Chartered Secretaries Southern Africa (CSSA) CEO Stephen Sadie told delegates at the ninth CSSA Premier Corporate Governance conference, in Johannesburg.

He added that good governance at public- sector entities, including SoEs, municipalities and national and provincial departments, was critical.

“Because many people depend on the services, such as education, health, security, and electricity, provided by the public sector, it goes without saying that public-sector governance is essential to the general wellbeing of our society.” Wealthier individuals could switch to private providers but the majority of citizens had no other option.

Noting that most public-sector employees had not been trained in public-sector governance, the CSSA aims to train people in this field. “[Our] public-sector governance module aims to fill this gap by exposing public-sector officials to a thorough understanding of what good governance entails.”

Sadie added that the CSSA also planned to work with other professional bodies to counter the scourges of corruption and fraud that had become commonplace in South Africa.

“Almost all professional bodies are affected at this point. It is probable that there are accountants, lawyers, company secretaries, engineers, directors and auditors who assist in a myriad of corrupt transactions. Professional bodies need to look into the role of these professionals who could taint the whole profession,” he noted.

Sadie expressed support for Karen Mills, the company secretary of the Johannesburg Roads Agency, who was suspended after making a protected disclosure to Major Shadrack Sibaya, the head of Group Forensic and Investigative Services at the City of Johannesburg. He said that companies needed to do more to protect such whistleblowers.

Citing auditing firm KPMG, whose CEO, Trevor Hoole, and eight other senior partners resigned after an internal investigation revealed the company’s work for the Gupta family fell considerably short of KPMG standards, Sadie said it was inevitable that the company would be questioned.

The auditing firm has acknowledged flaws in a report that it compiled for the South African Revenue Service (Sars), implying that former Finance Minister Pravin Gordhan had helped set up a so-called rogue spy unit when he was Sars commissioner.

“KPMG has been auditing Gupta-owned companies since 2002 and only now have they come forward and said they need to investigate these activities. It may be a case of too little, too late,” Sadie told Engineering News.

He added that it was necessary for companies to have corrective measures in place for these types of situations.

“[KPMG] gave R23-million back to Sars [after admitting flaws in its report], but that’s miniscule. [They] didn’t take corrective action and didn’t have risk measures in place within the company. We assumed that auditors were monitored, but it seemed that their activities were condoned,” he said.