The Editor’s Desk: Tongaat and companies run by and for managers

As the details of the alleged accounting fraud at Tongaat Hulett emerge, former Tongaat executives are being targeted for criminal and civil charges. It's refreshing to see managers being held accountable for their actions – all too often they seem to walk away unscathed, leaving pain and loss in their wakes. But it's also a reminder of what RECM's Piet Viljoen reminds us of: the danger of companies run by managers, for managers. In this episode, Alec Hogg and I discuss the Tongaat scandal and its fallout and take a look at why so many companies seem to operate with so little accountability. We also take aim at South Africa's institutional fund managers, who seem to be asleep at the wheel. – Felicity Duncan.Last week, Tongaat Hulett released a PwC report on an investigation into Tongaat's accounting practices. The investigation, initiated following reports of accounting irregularities, comes as Tongaat has been trying to rebuild itself in the face of a crashing share price, fraud allegations, and a host of business issues..___STEADY_PAYWALL___.The report is an indictment of Tongaat's corporate culture under its former leadership, and is likely to lead to criminal and civil charges for former Tongaat executives. But the picture it paints of shady practices, an overly deferent culture, and management acting with impunity, is a familiar one for those who follow the ups and downs of corporate SA. Many other South African companies are run along similar lines – we have seen the inevitable results of this poor governance in scandal after scandal..At its core, it's the result of what RECM's Piet Viljoen calls "companies run by managers, for managers" – companies at which the board and shareholders fail in their responsibility to provide oversight, guidance, and – when necessary – swift, corrective action. South Africa's large financial institutions, which oversee most of the country's investment's, are failing in their responsibilities as corporate watchdogs, active owners, and shareholder advocates.

The Editor’s Desk: Tongaat and companies run by and for managers

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