In the aftermath of the African Bank crisis, a thought emerged: robust data management capabilities serve as the bedrock of corporate governance. This assertion, echoing the principles of King III and King IV, extends beyond, encompassing the realm of compliance within the banking sphere, including the likes of BCBS 239 and SOX – prominent international regulatory frameworks.

The Core Argument:

In a nutshell, the essence of this argument hinges on South African banks taking proactive strides, regardless of circumstances, to promptly disprove any allegations of governance deficiencies. This entails embedding meticulous measures within board reports, affirming the accuracy of financials and risk evaluations.

Navigating Recent Turbulence:

Recent weeks have been marked by the Steinhoff scandal – an episode that underscores the significance of governance in the context of accounting data. Curiously, this post seamlessly converges with our exploration of combating #fakenews, as discussed here.

HE plethora of allegations of fraud, misrepresentation, corruption, bribery, and insider trading involving state-owned entities and companies operating in South Africa has done great reputational harm to those directly implicated, but the consequences may likely be systemic.

Fresh allegations of any impropriety enter an environment in which there is a high degree of inherent plausibility of such claims, as well as high levels of goodwill towards whistle-blowers. Viceroy’s report into Capitec arrives at the high point of governance and audit scepticism, and to a lesser extent scepticism about the robustness of the institutions set up to regulate, monitor and supervise markets, and the bank and non-bank financial services industries.

Gwen Ngwenya

Turning the Spotlight on Capitec Bank:

In a riveting twist, last week witnessed Viceroy’s spotlight on Capitec Bank, an act that caused a seismic 20% plummet in share value. The path forward remains shrouded, as the bank and its stakeholders contest the veracity of the reports, labeling them as inaccurate. This unfolding drama paints a vivid illustration of the very scenario predicted earlier – the ability (or lack thereof) of the board to substantiate the trustworthiness of their figures and risk evaluation stands pivotal in their defense.

Echoing Sentiments

Sound data governance invariably begets sound corporate governance.

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Data governance is unfortunately not well understood by many – who often see it as some variation on IT Audit or IT governance.

At its core, data governance defines accountability for how data is used within an organisation. Data governance would define how a bank, for example, measures its risk position and ensure that the agreed processes and rules were rigorously applied.  This proof is what inspires trust.

The Crux: Trust Amidst Uncertainty:

The weeks ahead loom pivotal for the board of Capitec and analogous enterprises. Amidst uncertainty, trust emerges as the steadfast ally they must garner. As the narratives unfold, it’s this trust that could potentially tip the scales in their favour.