Public sector corruption indicative of widespread rot

Private-sector corruption could be ‘quite a bit worse than we think’. That’s the view of Claudelle von Eck, CEO of the Institute of Internal Auditors SA (IIA SA) who believes rampant corruption in the public sector has ‘lulled us into thinking that things are going very well in the private sector’. According to the 2018 Corporate Governance Index released by the IIA SA, corporate governance has hit record lows. Mostly this reflects the calamitous state of corporate governance in the public sector, which Von Eck says has diverted attention from problems in the private sector. A BusinessLIVE report notes that she said the focus on public-sector debacles has let private-sector companies off the hook. ‘I think the focus in SA has been too much on the public sector. Part of that is because where the public sector is concerned it's our money, it's much more personal, and therefore we react a lot stronger than we would with private-sector companies.’ Von Eck said given the amount of pension money invested in companies like Steinhoff, there should have been more focus on corporate governance in the private sector. Part of the problem is that people often have no idea where their money is invested. ‘We need to do a lot more to help them understand how corporate failures affect them. A lot of people affected by Steinhoff have not comprehended to what degree they have been affected,’ she said. Von Eck believes Steinhoff and other recently publicised corporate failures have been a timely wake-up call. ‘As these things come to the surface, people are a lot more conscious of their own actions. You can hear that happening in your firms and corporates,’ she added.