Solly Moeng: When reputable person brands lend their prestige to rot
Solly Moeng reflects on the risks reputable individuals face when associating their names with damaged or toxic corporate, political, or institutional brands. His piece draws on the example of Professor Wiseman Nkuhlu, who became chairperson of the board of KPMG during a challenging period for the auditing firm. Moeng emphasises the importance of reputable figures asking tough questions and setting conditions to protect their own reputations. His article also discusses the positive outcome of Nkuhlu's tenure at KPMG and subsequently shifts focus to Mteto Nyati, who has recently been appointed chairman of Eskom, a troubled national power utility in South Africa. Moeng criticises Eskom's plan for a rebranding project amid ongoing electricity challenges, urging the board to prioritise addressing core issues over superficial changes.
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When Reputable Person Brands Lend Their Prestige to Rot
By Solly Moeng
Just over 5 years ago, in October 2018, I wrote a piece about the risks taken by respected persons when they lend their good names and personal brands – often in exchange for handsome payments – to reputationally damaged, even toxic, corporate, political, or institutional brands. This is done with the hope that their good names will rub onto the toxic brands and make them regain the appeal they might have enjoyed in the past. But this doesn't always end well, especially if the said reputable persons fail to either ask the hard questions upon being engaged, or to insist on the right conditions of engagement in order to protect their good names.
Part of my focus at the time was on respected South African Professor Wiseman Nkuhlu, who had just been appointed chairperson of the board of KPMG, at the time the most unfavourably cited big auditing firm in matters relating to state capture and other forms of corruption that culminated in the weakening and re-purposing of several South African state owned entities (SOEs) to serve the interests of criminals who were – and remain – imbedded in South Africa's state institutions through wrecking ball cadre deployments or links to insiders so deployed.
This is what I said at the time: Earlier this year, the reputationally, if not criminally, embattled KPMG managed to recruit the eminently respectable – and respected – Professor Wiseman Nkuhlu to help it deal with a fast-descending avalanche of image and credibility problems. Many wondered how this professor, with his sterling reputation, would rub off on a formerly respected corporate brand fast losing its lustre thanks to self-inflicted reputational wounds. This is particularly so because these wounds came about due to greed and, by the look of things, a corporate culture devoid of values-driven ethical leadership.
Following the announcement of his appointment as KPMG Chair, Nkuhlu said: "If the intention of KPMG is merely to use my stature and reputation to appease stakeholders and stem the loss of clients, they are making a big mistake. I value my reputation, that's all I have. There is no way I can be compromised."
Those were wise words from the Prof, and a good start to his journey with KPMG.
But I wrote at the time that it remained to be seen whether he would be given complete and honest answers to all the questions he would be expected to ask of KPMG so that he could, in turn, advise the company on honest, transparent steps to take in order begin rebuilding a credible reputation.
I also asked, would the wise professor be allowed to cast his probing eye into the auditing firm's questionable past activities so that he could, one day, stand on a public platform without flinching and – mindful of his own reputation – tell the world that all was well at KPMG? I went on to argue that as for Professor Wiseman Nkuhlu's reputational impact on KPMG, all was still too murky to see how it would all end. Stellar personal reputations, if badly used, cannot be automatic antidotes to poor, even unethical, corporate cultures.
Below is the link to the said piece:
I followed the Prof's actions and words, at the time, and I'm happy to say that it all ended well for him and, to an extent, for KPMG. His honest assessment of the the foundational problems at KPMG and other auditing firms was solid, so were the solutions he proposed. It is unclear, however, if the auditing sector followed his advice.
The problems he identified were based on:
- The conflict between auditing services and advisory services provided by most auditing firms, certainly the so-called big four: KPMG, Deloitte, PricewaterhouseCoopers (PwC), and Ernst & Young (EY).
- The vociferous hunger to to sign-up and retain clients at, seemingly, all cost.
- The long contractual periods and failure of audit firm rotation by many clients, particularly in the public sector, and
- The perennial failure to place ethical conduct and "public interest" at the heart of the services provided by auditing firms.
This phenomenon of reputable professionals being brought in by politicians to provide cover for reputationally toxic state institutions happens quite often in South Africa. Often, such professionals over-estimate the influence they can have on strategic governance decision-making, believing that alone, their technical know-how, professional experience, and good names would suffice to turn ailing institutions around and achieve success. Many only realise once inside that there is always an insatiable and uncompromising political hunger for state funds to feed on, particularly in South Africa.
I too have been there, once asked to act Corporate Affairs Manager for a major state institution I shall not name here, only to have a document placed on my desk to sign and approve, within a week of arriving at the said institution. The document was a multi-million rand tender to rebrand the institution and all its subsidiaries. It took me no time, following probing questions to my team members and the company's finance team, to realise that too many short-cuts had been taken for the document to reach that stage and that the agency that stood to benefit was linked to a board member appointed by the president at the time, not the current one. I refused to authorise the madness and, needless to say, my refusal ensured that my acting stint in the company got shortened quite considerably. I have also advised at least two CEO's of SOEs who were in similar positions with would be tenders amounting to even bigger amounts. This practice, especially where senior people in acting, therefore easily disposable positions, are concerned, is rampant.
Et tu, Mteto Nyati?
Now, fast-forward to 2023, ahead of what will certainly be a watershed election in SA. Another South African professional with an impeccable reputation, Mteto Nyati, has, not long ago, been appointed board chairman of one of the country's most criminally damaged institutions, Eskom, the national power utility. Many reputationally outstanding professionals walked chin up into senior positions at Eskom, over the years, and ended-up limping out in shame, with terribly wounded self-esteem and, in some cases, fearful for their lives. Some walked away with platinum and golden handshakes, having signed Non-Disclosure Agreements (NDAs) that would ensure that their silence is bought for the rest of their natural lives, or else. Wherever they have ended in the world and whatever they're busy with, only people close to them know.
As I write this, Eskom, which sits right at the heart of South Africa's economic woes together with the ANC and has just announced a resumption of level 6 electricity cuts, has told South Africans that it will invest in a rebranding project the cost of which is still not clear. This is absolute madness and, if Mteto Nyati and his fellow board members want to leave a bit of a positive legacy behind – for even they will eventually go – they must put their collective foot down and stop this planned frivolous wastage.
The real shareholders of Eskom, the perennially pained people of South Africa, do not want a new logo for Eskom; they want a return to normalcy in constant electricity generation, transmission, and distribution.
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