National Education Lessons we can learn from the NKF scandal - Part 3


18) KPMG report page 80, Section 5.3.15

"It is apposite to recall the maxim - delegatus non potest delegare: a delegate cannot delegate"

Using Latin, inter alia, gives your report a touch of class. (Personally I think French is better to give the aura of pretension)


19) It is not justified to pay executives obscene amounts of money, as it is not a guarantee that shenanigans will not go on

Some would justify paying executives great amounts of money commensurate with their performance, or with the responsibility their job entails. Others claim that with high pay, executives will not be tempted to engage in questionable activities. This has clearly been shown to be wrong.


20) KPMG report page 44, Section 1.11.3

"There was no truly effective governance mechanism capable of challenging executives in their management of the business, and re-directing the NKF to its true purpose as and when needed."

Some with doctorates might argue that checks and balances don't matter because if you have the wrong people, they will manage to subvert the checks and balances of the system. However, this begs the question of how you get the right people in in the first place, and how you stop them from being corrupted. Absolute power corrupts absolutely, and if checks and balances don't exist, even the best people might become over-confident (affecting their judgment) or lose their integrity with time, and there will be no mechanism to correct or replace them.

The key then, is to have checks and balances not only within the discrete sub-system or organisation (in this case, the NKF itself), but without - with the public, the press and regulatory bodies. The individuals whose job it is to ensure the checks work cannot be in awe at the prowess, reputation or mystique of one or a few supermen, trusting that since they are the right people, the checks and balances inherent in the system do not need to work


21) KPMG report page 94, Section 5.3.55

"That which "worked well in the past" may not always work; the rationale that "if it's not broken, let's not fix it" cannot apply to the NKF, particularly... when it was incorporated as a company."

Proclaiming that the old way of doing things has hitherto guaranteed success, and that to tinker even slightly with it will inevitably spell disaster for all concerned is a false dichotomy and plainly disingenuous, especially when times are a-changing, and so is the organisation. Stability and stagnation will not serve as the world moves on. New models are needed, and those in whose interests it is to preserve the status quo (or for other reasons dogmatically defend it) must not be allowed to hold the organisation back.


22) KPMG report page 100, Section 5.4.2

"We found that certain members of the former Board and/or Executive Committee did not disclose on a timely basis their actual or perceived commercial interests in third party suppliers who contracted with the NKF before such contracts were entered into."

Allegations of cronyism, nepotism and conflicts of interest (Interested Person Transactions) are most worrying and damaging, and full disclosure of relationships must be made. Even if not aired (due to fear of defamation suits, perhaps), such concerns will always linger if not addressed.


23) The perils of running non-businesses as businesses

Running a non-profit organisation as a business risks introducing a business mindset to the organisation, which brings with it the potential for abuseprofits and morals are almost always mutually exclusive. If you adopt a business mindset, you will behave with a business mindset rather than fulfilling your stated aims.


24) Bland assurances are useless

No matter how good an organisation's marketing or public relations is, or how it is claiming to be noble and to serve the public good, actions speak louder than words.


Other amusing bits of the report:

1) Page 172 & 174, Section 6.5.2-6.5.3, 6.5.13

"In 2004, the NKF disclosed or caused to be disclosed in several press releases and fund raising promotion materials that 2,900 to 3,600 children and their families were supported or assisted by the NKF... Records maintained by the DPA however show that up to 31 December 2004, the NKF-CMF benefited an aggregate of 145 children in the form of financial subsidies... In response, Mr Durai stated that "this is a matter of interpreation and sematics". and that "there was no intention on the part of the NKF to mislead members of the public.""

2) Page 125, footnote

"We were unable to determine how it came to be calculated that Ms Matilda Chua had 151 days of unused leave as at 31 July 2000"

3) Page 180, Section 6.7.7, point 5

"We found that as much as 90% of the running costs of the CEO's office amounting to $1.2 million were charged to haemodialysis at the NKF... it is unlikely the CEO would have spent 90% of his time on clinical activities, much less haemodialysis in particular."

4) Page 189, Section 6.11.2

You can make a profit on drugs and still claim you're subsidising them (note the difference between a subsidy and charging customers a below-market price thanks to savings on bulk purchases).

-End of Part 3-

Part 1, Part 2