The Gupta-Zuma saga has drawn worldwide attention, featuring in the NY times as well as CNN. The recent resignation of Duduzane Zuma and Atul Gupta from the Board of Oakbay Investment Holdings has caused quite a buzz in corporate South Africa. A Rhodes University professor has gone as far as hailing the resignation “a victory for King III and corporate governance in South Africa.”
However, one should be careful to jump to such a conclusion.
In the past, the King codes have been labelled as ‘smoke screens’, fronting a more cynical corporate reality.
Although King III requires the Board to act in the best interests of the company, the best interests of the ‘company’ are still generally equated to the interests of shareholders. The issue is that the Guptas remain 80% shareholders of Oakbay Investments and one should not be naive in thinking that they are acting in the best interests of other stakeholders, ie employees.
South Africa’s corporate governance system needs to work as an early warning system in order to be successful. Unfortunately, this was not the case for Oakbay.
View the Professor’s comments here.