Prominent economist Thabi Leoka is under fire following allegations of misrepresenting her qualifications, specifically her purported PhD from the prestigious London School of Economics (LSE). The accusations have raised concerns about the due diligence processes in high-profile director appointments and their potential implications on organizational governance.

Leoka, who formerly served as an economic advisor to President Cyril Ramaphosa, has vehemently denied the claims, asserting that her doctoral qualifications are legitimate. The controversy surfaced after an exposé by a business publication, alleging that her alleged fabrication of qualifications played a role in her removal from the board of Remgro, a company owned by billionaire Johann Rupert.

Independent Media reported that Leoka plans to take legal action against “Business Day” for publishing the claims, asserting that her departure from Remgro was due to health-related reasons. In her defense, she pointed out that even the founder of Remgro, Johann Rupert, was a university drop-out, suggesting that additional qualifications beyond a Master’s degree may not necessarily enhance one’s capabilities.

However, the allegations have triggered broader discussions on the importance of thorough vetting and due diligence in director appointments. Professor Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA), emphasized the critical role of board composition in the success of an organization. She stated that the governing body should possess an appropriate balance of knowledge, skills, experience, diversity, and independence, in alignment with Principle 7 of King IV.

Natesan stressed the significance of independent investigations into candidates’ backgrounds and verification of their qualifications, as recommended by Ethical Standard 19. Recent reports indicate that several organizations, where Leoka served on the board, failed to vet her qualifications, raising concerns about potential reputational damage and the director’s ability to provide quality input.

The IoDSA advocates for a formal, transparent, and rigorous due diligence process, starting with ensuring that potential directors meet the criteria set by applicable legislation and organizational founding documents. This includes identification, qualification, reference, and even credit checks. The board should also assess a candidate’s knowledge, experience, and a range of professional directorial skills.

Modern-day directorship, Natesan highlighted, requires more than just subject-matter expertise. Personal qualities such as integrity, honesty, curiosity, courage, teamwork, and communication skills are equally vital. Additionally, compatibility with the board’s culture and dynamic, along with a genuine interest in the organization’s goals, should be considered during the vetting process.

Failure to perform this routine vetting of directors, Natesan warned, exposes an organization to the erosion of trust among shareholders, potential investors, and other stakeholders. This, in turn, could impact the organization’s wider governance and its potential for success.

As the controversy surrounding Thabi Leoka unfolds, it raises broader questions about the efficacy of due diligence processes in director appointments. The scandal underscores the need for organizations to reevaluate their vetting procedures, ensuring transparency and accountability in governance practices.

The Thabi Leoka controversy serves as a stark reminder of the critical role directors play in shaping an organization’s trajectory. The scrutiny on qualifications and the personal attributes of directors is likely to intensify, demanding a more robust and comprehensive approach to due diligence in board appointments.