Neutralizing deviance at state-owned enterprises: The case of South African Airways

De Widt, Dennis ORCID: https://orcid.org/0000-0002-7299-5663, Maroun, Warren and Atkins, Jill ORCID: https://orcid.org/0000-0001-8727-0019 2024. Neutralizing deviance at state-owned enterprises: The case of South African Airways. Abacus: A Journal of Accounting, Finance and Business Studies Item availability restricted.

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Abstract

This article investigates how boards of directors and auditors retrospectively reflect on and justify their role in the breakdown of governance systems. We focus on state capture in South Africa where major corruption scandals have crippled the public sector. These scandals have been investigated by a special commission of inquiry offering a rich set of data for uncovering how individuals at South African Airways (SAA) attempt to justify their ‘deviant’ behaviour. The crisis at SAA was the focus of an investigation by the South African ‘Zondo Commission’ which concluded that the airline had repeatedly acted in disregard of relevant laws and experienced a steep decline in governance. Despite malpractice, SAA’s former auditors PwC and joint audit partner Nkonki Incorporated consistently gave SAA unqualified audit opinions. Only after intervention by the South African Auditor General were deficiencies exposed in SAA’s financial and governance structures. Our analysis identifies various neutralization techniques used by implicated individuals to cast doubt on responsibility for wrongdoing and garner sympathy where this was not possible. The method involves documentary analysis, focusing on witness transcripts and other evidence published by the Zondo Commission, SAA’s integrated reports, and select media articles. In addition to dealing with a novel set of data, this paper adds to the limited body of work dealing with governance in state-owned enterprises, especially in developing economies. The research also provides an account of how deviance theory is operationalized in the context of governance and audit, something which has not yet been addressed in detail. Keywords: Audit; Corporate governance; Neutralization techniques; Organizational crisis; State-owned enterprises; South Africa

Item Type:	Article
Date Type:	Published Online
Status:	In Press
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HJ Public Finance
Publisher:	Wiley
ISSN:	0001-3072
Date of First Compliant Deposit:	3 May 2024
Date of Acceptance:	19 April 2024
Last Modified:	07 May 2024 09:20
URI:	https://orca.cardiff.ac.uk/id/eprint/168695

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