Abstract:
Organisations today face the pervasive problem of commercial crime. The losses
suffered result in reduced profitability, diminished shareholders' returns, loss of growth
opportunities and, in certain instances, even threaten the sustainability of the
organisations. Despite dedicated investigation units and courts, specific legislation and
enhanced awareness and monitoring in organisations in South Africa, commercial
crime still abounds. Establishing the key drivers of commercial crime will enable
organisations to better evaluate their risks and to understand how practising good
corporate governance can assist in this regard.
Qualitative research using exploratory methods was utilised firstly to establish the key
drivers of commercial crime; and secondly, to assess the role of corporate governance
in addressing these drivers. A total of 13 semi-structured, in-depth interviews were
conducted with management and executive leadership in a diverse range of
organisations to explore this topic. A further seven interviews were conducted with
experts in the field of forensic investigation and corporate governance, whose insights
were used to test the initial findings by process of triangulation. The insights gleaned
formed the basis of the data that was analysed to produce the findings in this research.
The research found both internal and external drivers of commercial crime and
identified common themes, despite the diverse nature of the organisations researched.
Collusion between employees as well as financial distress due to the current economic
climate, were found to be amongst the key drivers. It was found that corporate
governance does in fact play a critical role in addressing these drivers, and thereby
making organisations more conscious and proactive to address commercial crime;
however, poor or inadequate implementation of corporate governance standards
weakens the effectiveness thereof. The reality that corporate governance is not
legislated contributes to the haphazard manner in which it is applied in different
organisations. Lastly, corporate governance needs to be supported by an ethical
culture in order to serve its purpose, and this is neglected by certain organisations. The
findings from the triangulation exercise supported the above findings.
