Corporate failure and ethical resources: a case study of Steinhoff and Carillion
- Authors: Mthombeni, Seyijeni Koos
- Date: 2023-10-13
- Subjects: Corporate governance , Business ethics , Steinhoff International (Firm) Corrupt practices , Carillion (Firm) Corrupt practices , Business failures , Accounting fraud
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419165 , vital:71621
- Description: This study aimed to investigate the impact of disregarding ethical resources on company performance, with a particular focus on Carillion and Steinhoff as case studies. A pragmatist research philosophy was employed using a mixed methods approach, utilizing deductive inferencing to produce archival research. Data was collected from annual financial statements and existing literature on Steinhoff and Carillion's corporate failures. Both content analysis and statistical analysis were employed to analyse the data. The study found that both Carillion and Steinhoff were at the top of their respective industries when they began to underperform due to poor governance. On the part of Carillion, much of its failure can be attributed to aggressive bidding, while for Steinhoff, its failure was due to unscrupulous accounting practices. Corruption and fraud at the top echelon of each of these respective companies began to trickle down to the bottom of the hierarchy. Additionally, Steinhoff used a two-tier board system that promotes information asymmetry between a management board and a supervisory board. This gave Steinhoff’s management board leverage to manipulate company reports and hide information from the supervisory board. Steinhoff equally violated the board’s independence by making former management executives part of the supervisory board, who could potentially be lenient to the management board due to past relationships. This was further exacerbated by the CEO duality, which contributed to Steinhoff’s lack of board independence. Furthermore, Steinhoff’s board was reported to have served as board members for a long time, eventually leading them to create a group culture that negatively affected its board’s independence. Different from Steinhoff, which lacked board independence and board diversity, at face value, Carillion appeared to have a predominantly independent board with diverse experience and external commitments. However, Carillion also lacked board independence in a different way, as some of its board members were previously employed by KPMG. KPMG was also the external auditor of Carillion. This created a scenario where Carillion and KPMG were conniving, which may have affected the objectivity of the external audits on financial performance. Further to this, the CEO held outsized power over the board, which could have also resulted in a lack of independence. This, in turn, facilitated corrupt behaviour within the organisation, which may have contributed to its corporate failure. iv The findings of the study highlight the following three conclusions: i) profits that are premised on reckless, irregular, and fraudulent business and accounting practices are not sustainable; ii) governance structures that do not adhere to sound corporate governance principles result in impaired board independence and negatively affect firm performance; and iii) companies that reach the pinnacle of their success through unethical conduct are ultimately short-lived. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2023
- Full Text:
- Date Issued: 2023-10-13
- Authors: Mthombeni, Seyijeni Koos
- Date: 2023-10-13
- Subjects: Corporate governance , Business ethics , Steinhoff International (Firm) Corrupt practices , Carillion (Firm) Corrupt practices , Business failures , Accounting fraud
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419165 , vital:71621
- Description: This study aimed to investigate the impact of disregarding ethical resources on company performance, with a particular focus on Carillion and Steinhoff as case studies. A pragmatist research philosophy was employed using a mixed methods approach, utilizing deductive inferencing to produce archival research. Data was collected from annual financial statements and existing literature on Steinhoff and Carillion's corporate failures. Both content analysis and statistical analysis were employed to analyse the data. The study found that both Carillion and Steinhoff were at the top of their respective industries when they began to underperform due to poor governance. On the part of Carillion, much of its failure can be attributed to aggressive bidding, while for Steinhoff, its failure was due to unscrupulous accounting practices. Corruption and fraud at the top echelon of each of these respective companies began to trickle down to the bottom of the hierarchy. Additionally, Steinhoff used a two-tier board system that promotes information asymmetry between a management board and a supervisory board. This gave Steinhoff’s management board leverage to manipulate company reports and hide information from the supervisory board. Steinhoff equally violated the board’s independence by making former management executives part of the supervisory board, who could potentially be lenient to the management board due to past relationships. This was further exacerbated by the CEO duality, which contributed to Steinhoff’s lack of board independence. Furthermore, Steinhoff’s board was reported to have served as board members for a long time, eventually leading them to create a group culture that negatively affected its board’s independence. Different from Steinhoff, which lacked board independence and board diversity, at face value, Carillion appeared to have a predominantly independent board with diverse experience and external commitments. However, Carillion also lacked board independence in a different way, as some of its board members were previously employed by KPMG. KPMG was also the external auditor of Carillion. This created a scenario where Carillion and KPMG were conniving, which may have affected the objectivity of the external audits on financial performance. Further to this, the CEO held outsized power over the board, which could have also resulted in a lack of independence. This, in turn, facilitated corrupt behaviour within the organisation, which may have contributed to its corporate failure. iv The findings of the study highlight the following three conclusions: i) profits that are premised on reckless, irregular, and fraudulent business and accounting practices are not sustainable; ii) governance structures that do not adhere to sound corporate governance principles result in impaired board independence and negatively affect firm performance; and iii) companies that reach the pinnacle of their success through unethical conduct are ultimately short-lived. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2023
- Full Text:
- Date Issued: 2023-10-13
T Kondo (Ed) law and investment in Africa: the fovernance of foreign direct investment in Zimbabwe
- Authors: Zongwe, Dunia P
- Date: 2021
- Subjects: Investments, Foreign -- Africa, Sub-Saharan , Zimbabwe -- Economic conditions , Corporate governance
- Language: English
- Type: text , review , article
- Identifier: http://hdl.handle.net/11260/6387 , vital:45443 , xlink:href="http://dx.doi.org/10.17159/2077-4907/2021/ldd.v25.16 "
- Description: Tinashe Kondo’s book, Law and investment in Africa, narrates the efforts of a country to regain the trust [and the love] of foreign investors after several decades of argument and hostility. Encapsulated in the “Zimbabwe is open for business” slogan, these efforts show “how a country can move to regain credibility and commit to global rules despite its recent history”. This review of Kondo’s book concerns the manner in which readers can take advantage of this immensely useful publication. Particularly, this review looks into the book in order to advise law academics on possible strategies to integrate the book into their curricula in Zimbabwe and elsewhere on the continent.
- Full Text:
- Date Issued: 2021
- Authors: Zongwe, Dunia P
- Date: 2021
- Subjects: Investments, Foreign -- Africa, Sub-Saharan , Zimbabwe -- Economic conditions , Corporate governance
- Language: English
- Type: text , review , article
- Identifier: http://hdl.handle.net/11260/6387 , vital:45443 , xlink:href="http://dx.doi.org/10.17159/2077-4907/2021/ldd.v25.16 "
- Description: Tinashe Kondo’s book, Law and investment in Africa, narrates the efforts of a country to regain the trust [and the love] of foreign investors after several decades of argument and hostility. Encapsulated in the “Zimbabwe is open for business” slogan, these efforts show “how a country can move to regain credibility and commit to global rules despite its recent history”. This review of Kondo’s book concerns the manner in which readers can take advantage of this immensely useful publication. Particularly, this review looks into the book in order to advise law academics on possible strategies to integrate the book into their curricula in Zimbabwe and elsewhere on the continent.
- Full Text:
- Date Issued: 2021
Identifying drivers of corporate social responsibility for community involvement
- Authors: Gwama, Mzwandile Sebastian
- Date: 2013
- Subjects: Social responsibility of business , Corporate governance
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/6597 , vital:21124
- Description: Organisations operate under unpredictable business environments. These business environments can be classified into internal and external environments. The decision taken by organisations to allocate resources for CSR depends on business environments. Organisations have no control of external business environments. Global financial crisis is an example of an external business environment of which organisations have no control over. The event in the business environments can influence the organisation to review its CSR operations. The beneficiaries of the organisation's CSR program get affected by such decision reviews and face even bigger challenges.
- Full Text:
- Date Issued: 2013
- Authors: Gwama, Mzwandile Sebastian
- Date: 2013
- Subjects: Social responsibility of business , Corporate governance
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/6597 , vital:21124
- Description: Organisations operate under unpredictable business environments. These business environments can be classified into internal and external environments. The decision taken by organisations to allocate resources for CSR depends on business environments. Organisations have no control of external business environments. Global financial crisis is an example of an external business environment of which organisations have no control over. The event in the business environments can influence the organisation to review its CSR operations. The beneficiaries of the organisation's CSR program get affected by such decision reviews and face even bigger challenges.
- Full Text:
- Date Issued: 2013
Corporate governance for sustainable development : implications for non-executive directors and the management accounting function
- Jodwana, Thembinkosi Anthony Vincent
- Authors: Jodwana, Thembinkosi Anthony Vincent
- Date: 2008
- Subjects: Corporate governance , Sustainable development , Directors of corporations , Corporations -- Finance -- Management
- Language: English
- Type: Thesis , Masters , MTech
- Identifier: vital:8975 , http://hdl.handle.net/10948/807 , Corporate governance , Sustainable development , Directors of corporations , Corporations -- Finance -- Management
- Description: This paper will discuss the role that corporate governance can play in promoting sustainable development. Sustainable development is discussed in relation to three things: • Current development which does not result in the damage and destruction of the environment to the detriment of future inhabitants of this planet. This paper will discuss the role that corporate governance can play in promoting sustainable development. Sustainable development is discussed in relation to three things: • Current development which does not result in the damage and destruction of the environment to the detriment of future inhabitants of this planet.
- Full Text:
- Date Issued: 2008
- Authors: Jodwana, Thembinkosi Anthony Vincent
- Date: 2008
- Subjects: Corporate governance , Sustainable development , Directors of corporations , Corporations -- Finance -- Management
- Language: English
- Type: Thesis , Masters , MTech
- Identifier: vital:8975 , http://hdl.handle.net/10948/807 , Corporate governance , Sustainable development , Directors of corporations , Corporations -- Finance -- Management
- Description: This paper will discuss the role that corporate governance can play in promoting sustainable development. Sustainable development is discussed in relation to three things: • Current development which does not result in the damage and destruction of the environment to the detriment of future inhabitants of this planet. This paper will discuss the role that corporate governance can play in promoting sustainable development. Sustainable development is discussed in relation to three things: • Current development which does not result in the damage and destruction of the environment to the detriment of future inhabitants of this planet.
- Full Text:
- Date Issued: 2008
Restoring trust by verifying information integrity through continuous auditing
- Authors: Flowerday, Stephen
- Date: 2006
- Subjects: Auditing, Internal , Corporate governance
- Language: English
- Type: Thesis , Doctoral , DTech
- Identifier: vital:9796 , http://hdl.handle.net/10948/504 , http://hdl.handle.net/10948/d1011920 , Auditing, Internal , Corporate governance
- Description: Corporate scandals such as Enron, WorldCom and Parmalat, have focused recent governance efforts in the domain of financial reporting due to fraudulent and/or erroneous accounting practices. In addition, the ineffectiveness of the current system of controls has been highlighted, including that some directors have been weak and ineffective monitors of managers. This board of director ‘weakness’ has called for additional mechanisms for monitoring and controlling of management, focusing on financial reporting. This problem intensifies in that today companies function in real-time, and decisions are based on available realtime financial information. However, the assurances provided by traditional auditing take place months after the transactions have occurred and therefore, a trust problem arises because information is not verified in real-time. Consequently, the errors and fraud concealed within the financial information is not discovered until months later. To address this trust problem a conceptual causal model is proposed in this study based on the principles of systems theory. The emergent property of the causal model is increased trust and control. This study establishes that mutual assurances assist in building trust and that information security assists in safeguarding trust. Subsequently, in order to have a positive relationship between the company directors and various stakeholders, uncertainty needs to be contained, and the level of trust needs to surpass the perceived risks. The study concludes that assurances need to be provided in real-time to restore stakeholder confidence and trust in the domain of financial reporting. In order to provide assurances in real-time, continuous auditing is required to verify the integrity of financial information when it becomes available, and not months later. A continuous auditing process has its foundations grounded in information technology and attends to the challenges in real-time by addressing the standardisation of data to enable effective analysis, the validation of the accuracy of the data and the reliability of the system.
- Full Text:
- Date Issued: 2006
- Authors: Flowerday, Stephen
- Date: 2006
- Subjects: Auditing, Internal , Corporate governance
- Language: English
- Type: Thesis , Doctoral , DTech
- Identifier: vital:9796 , http://hdl.handle.net/10948/504 , http://hdl.handle.net/10948/d1011920 , Auditing, Internal , Corporate governance
- Description: Corporate scandals such as Enron, WorldCom and Parmalat, have focused recent governance efforts in the domain of financial reporting due to fraudulent and/or erroneous accounting practices. In addition, the ineffectiveness of the current system of controls has been highlighted, including that some directors have been weak and ineffective monitors of managers. This board of director ‘weakness’ has called for additional mechanisms for monitoring and controlling of management, focusing on financial reporting. This problem intensifies in that today companies function in real-time, and decisions are based on available realtime financial information. However, the assurances provided by traditional auditing take place months after the transactions have occurred and therefore, a trust problem arises because information is not verified in real-time. Consequently, the errors and fraud concealed within the financial information is not discovered until months later. To address this trust problem a conceptual causal model is proposed in this study based on the principles of systems theory. The emergent property of the causal model is increased trust and control. This study establishes that mutual assurances assist in building trust and that information security assists in safeguarding trust. Subsequently, in order to have a positive relationship between the company directors and various stakeholders, uncertainty needs to be contained, and the level of trust needs to surpass the perceived risks. The study concludes that assurances need to be provided in real-time to restore stakeholder confidence and trust in the domain of financial reporting. In order to provide assurances in real-time, continuous auditing is required to verify the integrity of financial information when it becomes available, and not months later. A continuous auditing process has its foundations grounded in information technology and attends to the challenges in real-time by addressing the standardisation of data to enable effective analysis, the validation of the accuracy of the data and the reliability of the system.
- Full Text:
- Date Issued: 2006
Establish to what extent small and medium enterprises (SMEs) in the Port Elizabeth CBD comply with good governance principles and practices
- Authors: Mpafa, Dumisani
- Date: 2005
- Subjects: Corporate governance , Small business -- South Africa -- Port Elizabeth
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:10904 , http://hdl.handle.net/10948/163 , Corporate governance , Small business -- South Africa -- Port Elizabeth
- Description: Throughout the world, corporate or good governance has become such a dominating terminology in the ever -increasing business vocabulary. Its fast rise and strategic relevance to the global business communi ty is part ly due to the desi re by the business leaders wor ldwide to be seen to be doing something about the scourge of corporate failures resulting f rom poor governance. The objective of the research was to establish to what extent Smal l and Medium Enterpr ises (SMEs) comply with good governance principles and practices. The SMEs in the Port Elizabeth CBD were chosen as the representative population of the SME sector throughout the country. The research methodology included: A li terature study to determine, on the one hand the current good governance pract ices global ly, and on the other the role, relevance and the challenges of the SMEs in the South Af rican Economy. An empir ical study in order to obtain the empir ical evidence concerning SME compliance to good governance principles and pract ice. This was done through a survey of SME sector in the Port Elizabeth CBD. Lastly, the conclusion and recommendations. The conclusion was reached, inter alia, that the major ity of SMEs do not comply wi th good governance principles and pract ices for various reasons. Therefore the following recommendations were made: Recommended that the organisational accountants appointed in terms of the law should not confine themselves to the financial aspects of the business only, but also look at governance of these small businesses. Recommended that a sub-code for SMEs be developed. Recommended that the existing code of governance be amended to include a clause that requires large and establish businesses to insist on good governance in the SMEs they deal with at any level. Recommended that the South African Qualifications Authority (SAQA) should develop a qualification or unit standard on good governance to facilitate training on good governance. Since good governance knowledge is a key competence for every manager, especially senior management. It is recommended that institutions of higher learning should have good governance in their curriculum.
- Full Text:
- Date Issued: 2005
- Authors: Mpafa, Dumisani
- Date: 2005
- Subjects: Corporate governance , Small business -- South Africa -- Port Elizabeth
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:10904 , http://hdl.handle.net/10948/163 , Corporate governance , Small business -- South Africa -- Port Elizabeth
- Description: Throughout the world, corporate or good governance has become such a dominating terminology in the ever -increasing business vocabulary. Its fast rise and strategic relevance to the global business communi ty is part ly due to the desi re by the business leaders wor ldwide to be seen to be doing something about the scourge of corporate failures resulting f rom poor governance. The objective of the research was to establish to what extent Smal l and Medium Enterpr ises (SMEs) comply with good governance principles and practices. The SMEs in the Port Elizabeth CBD were chosen as the representative population of the SME sector throughout the country. The research methodology included: A li terature study to determine, on the one hand the current good governance pract ices global ly, and on the other the role, relevance and the challenges of the SMEs in the South Af rican Economy. An empir ical study in order to obtain the empir ical evidence concerning SME compliance to good governance principles and pract ice. This was done through a survey of SME sector in the Port Elizabeth CBD. Lastly, the conclusion and recommendations. The conclusion was reached, inter alia, that the major ity of SMEs do not comply wi th good governance principles and pract ices for various reasons. Therefore the following recommendations were made: Recommended that the organisational accountants appointed in terms of the law should not confine themselves to the financial aspects of the business only, but also look at governance of these small businesses. Recommended that a sub-code for SMEs be developed. Recommended that the existing code of governance be amended to include a clause that requires large and establish businesses to insist on good governance in the SMEs they deal with at any level. Recommended that the South African Qualifications Authority (SAQA) should develop a qualification or unit standard on good governance to facilitate training on good governance. Since good governance knowledge is a key competence for every manager, especially senior management. It is recommended that institutions of higher learning should have good governance in their curriculum.
- Full Text:
- Date Issued: 2005
Integrating information security into corporate culture
- Authors: Thomson, Kerry-Lynn
- Date: 2003
- Subjects: Computer security -- Management , Corporate governance , Corporate culture
- Language: English
- Type: Thesis , Masters , MTech (Information Technology)
- Identifier: vital:10801 , http://hdl.handle.net/10948/132 , Computer security -- Management , Corporate governance , Corporate culture
- Description: Introduction: There are many components that are required for an organisation to be successful in its chosen field. These components vary from corporate culture, to corporate leadership, to effective protection of important assets. These and many more contribute to the success of an organisation. One component that should be a definitive part in the strategy of any organisation is information security. Information security is one of the fastest growing sub-disciplines in the Information Technology industry, indicating the importance of this field (Zylt, 2001, online). Information security is concerned with the implementation and support of control measures to protect the confidentiality, integrity and availability of electronically stored information (BS 7799-1, 1999, p 1). Information security is achieved by applying control measures that will lessen the threat, reduce the vulnerability or diminish the impact of losing an information asset. However, as a result of the fact that an increasing number of employees have access to information, the protection of information is no longer only dependent on physical and technical controls, but also, to a large extent, on the actions of employees utilising information resources. All employees have a role to play in safeguarding information and they need guidance in fulfilling these roles (Barnard, 1998, p 12). This guidance should originate from senior management, using good corporate governance practices. The effective leadership resulting from good corporate governance practices is another component in an organisation that contributes to its success (King Report, 2001, p 11). Corporate governance is defined as the exercise of power over and responsibility for corporate entities (Blackwell Publishers, 2000, online). Senior management, as part of its corporate governance duties, should encourage employees to adhere to the behaviour specified by senior management to contribute towards a successful organisation. Senior management should not dictate this behaviour, but encourage it as naturally as possible, resulting in the correct behaviour becoming part of the corporate culture. If the inner workings of organisations are explored it would be found that there are many hidden forces at work that determine how senior management and the employees relate to one another and to customers. These hidden forces are collectively called the culture of the organisation (Hagberg Consulting Group, 2002, online). Cultural assumptions in organisations grow around how people in the organisation relate to each other, but that is only a small part of what corporate culture actually covers (Schein, 1999, p 28). Corporate culture is the outcome of all the collective, taken-for-granted assumptions that a group has learned throughout history. Corporate culture is the residue of success. In other words, it is the set of procedures that senior management and employees of an organisation follow in order to be successful (Schein, 1999, p 29). Cultivating an effective corporate culture, managing an organisation using efficient corporate governance practices and protecting the valuable information assets of an organisation through an effective information security program are, individually, all important components in the success of an organisation. One of the biggest questions with regard to these three fields is the relationship that should exist between information security, corporate governance and corporate culture. In other words, what can the senior management of an organisation, using effective corporate governance practices, do to ensure that information security practices become a subconscious response in the corporate culture?.
- Full Text:
- Date Issued: 2003
- Authors: Thomson, Kerry-Lynn
- Date: 2003
- Subjects: Computer security -- Management , Corporate governance , Corporate culture
- Language: English
- Type: Thesis , Masters , MTech (Information Technology)
- Identifier: vital:10801 , http://hdl.handle.net/10948/132 , Computer security -- Management , Corporate governance , Corporate culture
- Description: Introduction: There are many components that are required for an organisation to be successful in its chosen field. These components vary from corporate culture, to corporate leadership, to effective protection of important assets. These and many more contribute to the success of an organisation. One component that should be a definitive part in the strategy of any organisation is information security. Information security is one of the fastest growing sub-disciplines in the Information Technology industry, indicating the importance of this field (Zylt, 2001, online). Information security is concerned with the implementation and support of control measures to protect the confidentiality, integrity and availability of electronically stored information (BS 7799-1, 1999, p 1). Information security is achieved by applying control measures that will lessen the threat, reduce the vulnerability or diminish the impact of losing an information asset. However, as a result of the fact that an increasing number of employees have access to information, the protection of information is no longer only dependent on physical and technical controls, but also, to a large extent, on the actions of employees utilising information resources. All employees have a role to play in safeguarding information and they need guidance in fulfilling these roles (Barnard, 1998, p 12). This guidance should originate from senior management, using good corporate governance practices. The effective leadership resulting from good corporate governance practices is another component in an organisation that contributes to its success (King Report, 2001, p 11). Corporate governance is defined as the exercise of power over and responsibility for corporate entities (Blackwell Publishers, 2000, online). Senior management, as part of its corporate governance duties, should encourage employees to adhere to the behaviour specified by senior management to contribute towards a successful organisation. Senior management should not dictate this behaviour, but encourage it as naturally as possible, resulting in the correct behaviour becoming part of the corporate culture. If the inner workings of organisations are explored it would be found that there are many hidden forces at work that determine how senior management and the employees relate to one another and to customers. These hidden forces are collectively called the culture of the organisation (Hagberg Consulting Group, 2002, online). Cultural assumptions in organisations grow around how people in the organisation relate to each other, but that is only a small part of what corporate culture actually covers (Schein, 1999, p 28). Corporate culture is the outcome of all the collective, taken-for-granted assumptions that a group has learned throughout history. Corporate culture is the residue of success. In other words, it is the set of procedures that senior management and employees of an organisation follow in order to be successful (Schein, 1999, p 29). Cultivating an effective corporate culture, managing an organisation using efficient corporate governance practices and protecting the valuable information assets of an organisation through an effective information security program are, individually, all important components in the success of an organisation. One of the biggest questions with regard to these three fields is the relationship that should exist between information security, corporate governance and corporate culture. In other words, what can the senior management of an organisation, using effective corporate governance practices, do to ensure that information security practices become a subconscious response in the corporate culture?.
- Full Text:
- Date Issued: 2003
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