UP Chancellor Prof Wiseman Nkuhlu warns of ‘dangers of the economic man’ in book about his time as KPMG Chairman

Posted on November 04, 2020

University of Pretoria Chancellor and KPMG Chairman Professor Wiseman Nkuhlu has penned a memoir, Enabler or Victim? KPMG SA and State Capture, which describes his experience as Chairman of KPMG during the turbulent period the firm experienced.

Professor Nkuhlu caught up with Masego Panyane to share a little more about the book.

Masego Panyane (MP): Why was it important for you to write this book?

Professor Wiseman Nkuhlu (WN): The profession has been under scrutiny for a number of years now. In South Africa, auditing has been linked to the ‘Gupta episodes’ amongst others, and there has been an erosion of public trust in auditing practices. As a senior member of the profession, this has been of great concern to me as it is worrying when the public can no longer trust us to investigate corruption.  If audit cannot be trusted, the country faces a great conundrum.

In addition to ongoing disillusionment towards the profession, there are events that have eroded trust in KPMG SA in particular, specifically around the relationship with the Guptas, and the perceived complicity in state capture by working with them, as well as the investigation that KPMG SA did for SARS. A combination of all of these factors spurred me on to write this book. The book is my contribution [to this discussion] and in it I share my own observations regarding factors influencing auditors’ conduct, and I also use the book to share my own experiences at KPMG SA and the route we went to gain a deeper understanding of the root causes of the crisis, as well as to develop a renewal plan for the firm.

MP: You have built an impressive personal reputation over the years through your hard work. When KPMG approached you to assist them, were you not afraid that you would tarnish this by associating with them, and is this something you explored in the book?

WN:  Yes, it is explored in the book. I was scared, and because of that I spoke to a number of business leaders in the country, some of whom I mention in the book. The views were varied, with some people saying this would be the end of my career, and questioning why after having had a very distinguished career I would consider doing this. Another view was that I’d gained opportunities through the audit profession, and that I had been telling the world that the skills and ethics I possess that inform my conduct are attributed to the teachings of this profession. With the profession now in disrepute, its ethics under scrutiny, was it not also my duty as one of its leaders to stand up and do something to clean it up and restore its reputation? These are some of the things I touch on in Chapter 1.

MP: Renewing KPMG must have been a challenge. Was the process of reliving this through writing equally difficult?

WN: It was extremely difficult. When you are confronted with a big issue and cannot get your mind around it, you sometimes go back to books or authorities that you read in your foundation years to say “who can help me understand this thing?” That’s what I did. I went back to books I’d read as far back as 1989 to start the process. Here I was, confronted with a mammoth task. I used to go to KPMG for lessons in accounting standards. I respected them. Now, they’ve fallen. They are seen now to lack integrity. I had to introspect. The other difficult thing I had to deal with was that when an organisation is known to be excellent and is admired by people for many years and it experiences an incident, one action that does not align with the  history of the company, the tendency is to treat it  as an isolated incident, to say “this is not us”. Now, when the Guptas issue happened, there was the belief that it was an isolated incident. That only those two partners were involved. I had to say to KPMG that I understood, that they are known for this excellence, but the way to renew is by treating it as though it’s systemic. That was difficult for KPMG to accept. When VBS exploded, I showed them that this was no longer an isolated incident. It was time to tackle this, and to discuss and renew the whole organisation. Time to stop with the disbelief and denialism.  Those were difficult times to deal with, and to encourage this conversation. [And to later put it onto paper].

MP: How would you encourage people outside the accounting profession who read the headlines and needed a deeper understanding of the issues to get the book?

WN: The idea I deal with in the book that goes beyond the accounting profession is a challenge to all professionals, particularly black professionals, regardless of profession. In whatever you do, you can’t just say, “I am coming to work, I want to maximise my profit and salary” – your income. We should be informed by another mission to say, “how do I contribute to poverty alleviation of the people I left behind in Tsolo”, for instance? Then you continue to say “whatever position I find myself in, I should ensure that it doesn’t only work for my pocket”. Your professional pride must be the thing that drives your decision-making. If this pride in our professions and being inspired by something more profound was a reality, South Africa would not be in the mess it’s in. We have forgotten what the struggle was about. It was about ensuring a better life to the most vulnerable people in our societies. So, when we are entrusted with leadership positions and we remain true to that idea, we will not have so many thieves. I am talking to all of us as leaders and professionals, as to what inspires us, so that we won’t allow ourselves to be overwhelmed by greed for material things. In that sense, the book speaks to this message, and is relevant to all of us.

- Author Masego Panyane

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