By Radithebe Rammutle
The audit and business consulting industry, which has allowed the unethical culture to flourish ultimately leading to scandals that rocked its reputation, is now looking at women leadership to bring about change. The new Deloitte Africa Region Chief Executive Officer (CEO), Ruwayda Redfearn, a lonesome figure amongst her male counterparts heading the Africa region of Ernst & Young, KPMG, and PriceWaterCoopers, takes the helm just months after Tongaat Hulett filed a civil case against the auditing company. Tongaat alleges that its erstwhile auditor for 80 years signed off on financial irregularities between 2011 and 2014 that resulted in its financials being inflated by almost R12 billion. Not so long ago in another civil case with Eskom, the company had to pay back R150 million of its consulting fees to the utility company for procurement irregularities.
In the past, companies learned the hard way the consequences of losing face amongst company stakeholders after a scandal. Fuelled by the hypermedia environment, the Deepwater Horizon Oil rig accident that resulted in oil spilling into the Atlantic Ocean on the Coast of Mexico was widely covered on broadcast platforms, business press, and social media. Instead of the containment efforts to stop the spillage, coverage focused on the ocean’s contamination and the resulting environmental devastation, finger-pointing, and the agony of fisherman and shrimpers who were losing their source of income.
What was said about the company led to a reputation loss amongst shareholders, the United States government, politicians, lawyers, and other stakeholders. BP’s share price fell by 51% in 40 days on the New York Stock Exchange (NYC), declining from $60.57 on 20 April 2010, to $29.20 on 9 June that year. Members of Congress berated its leadership on live television. The public perceived the firm as an out-of-touch British company with no ability to cope with the oil disaster.
The recent Deloitte scandal in South Africa is a lighter version of the Deepwater Horizon Oil spill scandal or the 2001 Deloitte & Touche scandal that led to the collapse of the energy company, Enron. However, Redfearn faces the reality of an organisational culture that allows unethical behaviour to flourish. To change this culture, she can look to the character of the BP leadership team post the oil spillage which has become a source of lessons on resilience and redemption in business. BP has recovered from the reputation loss it suffered from the spillage scandal and is now the trusted corporate citizen that it once was pre-crisis period. Ironically, Redfearn cannot look to the leadership team of Deloitte & Touche, a predecessor to Deloitte that never recovered from the Enron crisis.
According to her Facebook résumé, Redfearn gained most of her experience at Deloitte. She has two years and three months (from October 2012 to December 2014) experience outside the organisation when she served as a Chief Financial Officer at Grindrod Trading. The Kwa-Zulu Natal company established in 2008 and currently without a website, is described as a Securities and Commodity Exchange company on the Dun & BradStreed Business Directory website. According to the website, the company has a total of 19 employees across all its locations. With such limited experience outside Deloitte, opinion-makers might ask whether Redfearn can sail Deloitte to calmer waters.
Perhaps the appointment of the first female CEO is what is needed to get out of the stormy waters that the company finds itself in. While organisational change is a leadership team effort, leaders at the helm should create new culture and model the required behaviour that is aligned to the emergent culture. They target the intellectual ability of followers so they can provide solutions to problems.
After the Deepwater Horizon disaster, the Chairman of BP board, Carl-Henric Svanberg called every BP board member every day for 100 days to keep them informed and to solicit their views on how to deal with the problem. From this process came the decision to oust Tony Hayward, the then CEO who caused offence by telling reporters he wanted his “life back” from the demands of disaster response, even as families grieved for 11 men who were killed in the rig explosion.
Caring about small people who are often victims of unethical audits might be one of the values that Redfearn models, lest she suffers Hayward’s fate.