WAR STORIES FOR EXECUTIVES is a new series of articles discussing ominous experiences that have been revealed in coaching sessions by higher level executives – lessons we can all learn from.


Sometimes I come across some real pearls.

People tell me stories that pique my professional interest and remind me of how mindless we, as executives, can be.

So here is my latest tale, told to me by a particularly interesting personality.

My client (I’ll call him Buddy for ease of reference) came to see me after needing to make a major career change. He had spent many years in a large listed conglomerate where he had been involved in all aspects of the business from finance, mergers and acquisitions, manufacturing, warehousing/logistics, product servicing, import/export, IT, treasury, banking and insurance. In fact he had pretty much done it all.

He sat on a number of the sub-committees that reported into the Board, some of whose members were powerful captains of industry.

Buddy was a seasoned executive.

This story is about how companies short change valuable people and lose a lot more than they bargained for!

Buddy was not a qualified CA(SA) – he failed the entrance exam a few times and finally given up. But he had worked for the Group for 20 years and had risen up through the ranks.

And then things suddenly changed as often happens in an environment of this size.

The CEO was replaced.


The new guy turned out to be a rather nasty piece of work whose value system was diametrically in opposition to the ethos that Buddy had grown up in.

He could not see eye to eye with the new man and they agreed to amicably part ways.

Whilst he searched around for a new job, Buddy enjoyed his new found freedom. He discovered new parts of himself previously unknown and spent many delightful hours playing in the bush and testing out his photographic skills with his newly acquired high-end camera .

Just as his finances were beginning to run low he miraculously landed an amazing job as the CFO of a rapidly expanding construction company.

It was a gift from heaven.

The remuneration was excellent and there were some exciting wealth creating opportunities included in the package. He liked his CEO and was particularly drawn to the non-executive director that he met in the initial interviews.

Life looked great!

He settled in quickly and tackled his new job with gusto.

Within a few months, it became apparent that things were not as dandy as they first appeared.

Should he have been surprised?

Actually, his basic life experience should have warned him that the whole thing was too good to be true.

Besides the issue of the financial backlog, poor staffing and a shocking computer system, it emerged that the two senior directors were brother and sister. In the whole interview process Buddy had not had the pleasure of meeting the sister who was effectively the executive chairperson of the Group.

Buddy had known about the existence of a private equity partner who held 50% of the company and he had only met one of the two directors who sat on the Board. The other was a pompous little chap who Buddy detested immediately,

Furthermore it emerged that the animosity that existed between the two sibling was something to behold. The toxicity of the relationship quickly began to leak into every aspect of Buddy’s work. Wherever he looked he found himself right in the middle of their petty squabbles.

The brother had a schizoid personality and was warm and friendly at times and hysterical and pathetic at others. The sister was a classic corporate sociopath, a narcissist of note.

And the non-execs stayed well away from this sibling rivalry, leaving Buddy with no support and hoping that somehow it would just magically work out.

But Buddy was enjoying the construction industry. In the process his warning systems shut down.

He plunged into the task with unexpected energy, working 12 hours a day.

And he fixed it all, and in a surprisingly short period of time.

Furthermore he immersed himself in a remarkably exciting project which involved restructuring one of the poorly drafted construction contracts. In the process he was able to reclaim a whopping R50m back from the contractor concerned.

Whilst brother and sister boxed with each other and the non-execs pretended not to notice, Buddy just got on with it and worked tirelessly to deliver the appropriate value.

The final result was nothing short of spectacular.

And then disaster struck.

One Sunday afternoon whilst playing tennis, Buddy slipped and broke his hand.

It was a minor injury but was enough to keep him otherwise indisposed.

And then came the news that surgery was required to re-align the bones. Again this was not a major issue but it was enough to result in additional time off work.

Notwithstanding the excellent work Buddy had delivered in the more recent past, the Board appeared to be impatient with the development of events. This would have been understandable had the whole episode not happened over the December holiday period.

Buddy was annoyed with this reaction as he believed that had done an outstanding job in the short time that had been with the Group.

But here is the most despicable and juicy part of the whole story.

To add insult to injury, Buddy developed unforeseen complications from the surgery. The wound suddenly became septic and had be rushed to ICU where he remained for 10 torturous days. It was literally a life and death situation.

During this time Buddy did not hear from either the brother or the sister or his non-executive colleagues. They never phoned and they never visited. In fact they made absolutely no contact at all, even ignoring emails.

Buddy described his anguish as he lay in bed trying to fathom why he was being treated with such disdain. He described in graphic detail the terrible experience of not knowing what was going on. How could people who he had worked with so well behave in such an abominable manner?

After a few weeks he returned to work.

And they all behaved quite normally as though nothing was untoward.

But Buddy was furious!

Of course, he kept up the pretense and remained false and friendly.

And as fate would have it, a few weeks later he discovered an absolute bombshell!

A staggering amount in the order of R10m had disappeared from the balance sheet, literally into thin air!

It was a high level fraud that had been neatly and cleverly executed! And to top it all, it had slipped right passed the auditors. Simply put, it comprised payments made to fictitious suppliers that were disguised as a series of inter-company loan write-offs. Instead of hitting the income statement (which would have got the alarm bells ringing), they were slyly capitalized into the costs of various projects.

Buddy was aghast! This was a fraud at a very high level – one of the divisional accountants had almost certainly stolen the money! The thing is that the sister trusted him implicitly and usually authorized whatever he put in front of her without checking the corresponding paper-work.

Buddy did also not discount the fact that the sister could also be involved – he was aware that she had cash flow problems in her personal life. He was remembering that when he joined he was told to keep an eye on but not interfere with the accountant’s processes. On reflection Buddy recalled that on more than a few occasions, when he had refused to sign off payments without seeing the paperwork, he was told by the sister to ‘back off’.

Who knows? But the money was clearly missing!


As fate would have it the very next day Buddy was called into a directors’ meeting where he was informed that the Board was reconsidering the value-add of the CFO role. This was as a consequence of him being off work. They claimed that all the difficult work had been completed and they could no longer justify Buddy’s large salary.

Fair enough – the writing had been on the wall for some time now and Buddy had been planning an exit strategy in any case.

But now the fraud issue had emerged and there was big work to be done here!

He was told that he needed to submit a report within 14 days justifying why he thought the CFO role should be retained, failing which he would be retrenched.

For Buddy the newly uncovered fraud was high level CFO work – there was the forensic investigation, dismissals, prosecutions, insurance claims and the criminal litigation.

On joining the Group, Buddy had ensured that a comprehensive employee fidelity policyhad been taken out. There was no doubt in his mind that the misappropriated funds were recoverable under this policy.

But, taking into account all that had happened, it did not take Buddy more than a few days to make his decision. He was quite sure that there was no way he wanted to spend much more time with this company and its owners.

He considered the fact that the sister had picked up via her accountant that he had been sniffing around and asking questions and she needed to get rid of Buddy before he discovered the missing funds. But it did not change his decision.

He approached the Board and put forward his case. He agreed that the bulk of the important work had been completed and that the CFO role had become redundant.

Even though he had delivered huge cash value to the Group, he was unable to negotiate a retrenchment package that was very much more than the statuary amount payable under the law.

To this day that R10m remains undetected.

The same people who stole the money are still there.

When I asked him how he felt about the whole saga, he said  “Touche! They were awful people and they deserved each other. From my side I was happy to walk away and leave them to their own miserable devices!”

The moral of the story?

Never underestimate the value of a good CFO!