Corporate crime: A looming threat to your pension savings
Boardroom success can mask deeper governance failures, with risks ultimately borne by investors and pension funds.
Image: AI Generated
A new doctoral study at the University of Cape Town warns that corporate crime is not confined to boardrooms, but can pose a direct threat to pension savings, economic stability and public trust.
What often appears as corporate success can mask deeper dysfunction, with the consequences ultimately borne by workers, investors and ordinary South Africans.
The research, by PhD candidate set to graduate Trevor Yingwane, found that personality traits, weak oversight and relentless pressure for financial performance are quietly creating the conditions for corporate misconduct to take root.
Yingwane will graduate with a PhD in Commercial Law on Saturday, March 28, 2026.
Titled Unravelling corporate crimes within listed companies: a multi-case study of selected South African and German companies, the study examines how relationships between shareholders, executives and non-executive directors can unintentionally enable unethical and non-compliant behaviour.
It draws on case studies of Steinhoff, Volkswagen and Wirecard, identifying patterns of governance failure across different regulatory and economic contexts.
“Corporate crime is not confined to one jurisdiction,” Yingwane said. “It emerges from an interaction between micro drivers such as managerial avarice and pathogenic narcissism, and macro drivers such as ambiguous regulations, weak oversight, information asymmetry and dysfunctional stakeholder relationships.”
The study found that dominant governance frameworks, including agency theory and stakeholder theory, are individually useful but insufficient to explain how large-scale corporate crime develops.
Instead, misconduct arises from a combination of failures, including weak board oversight, excessive trust in executives and compromised independence among non-executive directors.
A recurring feature across all three cases was the use of annual reports to project strong performance and sustain investor confidence, a phenomenon Yingwane terms “annual report syndrome”.
“In each case, the fixation on share price growth created incentives for managers to produce impressive numbers at any cost,” he said.
The research highlights how boards can be misled by carefully curated, and in some cases false, information that creates an illusion of operational success.
Yingwane found that many boards lack organisational behaviour expertise, making them more vulnerable to manipulation and less able to detect warning signs in leadership.
“A key insight is that many boards lack organisational behaviour expertise. Without that expertise, directors are more vulnerable to manipulation and less equipped to recognise pathological traits or behavioural warning signs in senior leaders,” he said.
While shareholders were not found to directly instruct misconduct, indirect pressures, particularly the focus on performance and share price growth, contributed to environments where wrongdoing could flourish.
In some cases, dominant shareholders weakened oversight by blurring the lines between ownership and management, a dynamic Yingwane refers to as “shareholder risk theory”.
“Shareholder activists do have sufficient power, particularly when they act collectively,” Yingwane said. “But sustainable change requires what I call decisive shareholder activism, a long-term, strategic and informed approach grounded in deep organisational understanding.”
He also points to a stronger role for labour unions as governance watchdogs, particularly in systems that allow employee representation at board level.
Yingwane argues that corporate crime in South Africa should be understood as systemic rather than exceptional.
“South Africa still treats corporate crime as a relatively new phenomenon. But the patterns I identified, managerial autonomy, information asymmetry, weak oversight and toxic organisational cultures, are already visible in several local cases,” he said.
He calls for reforms that move beyond compliance-based governance, including expanding performance metrics to include corporate culture, stakeholder relations and managerial behaviour, limiting close personal and professional ties among board members, and requiring organisational behaviour expertise in board composition and executive recruitment.
He also advocates for stricter liability and more punitive consequences for directors and executives involved in large-scale misconduct.
“When misconduct is uncovered, companies often attempt to mislead regulators or deflect scrutiny. Stronger consequences would enhance accountability and serve as a meaningful deterrent,” he said.
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