Buhlmann's Corner
Corruption or “just” conflict of interest?
Not everyone asks – but anyone who does ask me what corporate governance is gets told: look at the Sermon on the Mount (Matthew 5-7), or at the Khutbat al-Wada‘a – Muhammad’s Farewell Sermon before his death in 632 AD in the Uranah Valley. There is more than one answer there to what today is called conflict of interest.
There is a growing impression that the concept of corruption is tending to degenerate into another revenue source for the coffers of the criminal justice authorities, especially since any form of definition is tricky, if only because there is no consensus on the substantive limits. But be that all as it may, what really irritates me as a mere observer is the way the topic is kept at a distance.
The UN Convention against Corruption (UNCAC) of 16 September 2005 has still been not ratified by Japan, Saudi Arabia or Germany. In Germany this is simple and easy to understand: because “the parliamentarians would be hindered in the free exercise of their [Bundestag – author’s note] mandate”. Perhaps the tax-saving Republic should be guided more by Switzerland, which launched the procedure on 21 September 2007. That’s just how it is: in 18th-century feudal States corruption was a third of the officials’ and diplomats’ incomes – some are simply not yet at home in today’s world.
Corruption is clearly of benefit – for the corrupter, and for a short time. Just like trade barriers against China in the solar world ....
Corruption is clearly of benefit to the collectors of the American justice authorities (the German ones get at most the Sermon on the Mount’s tithe) ....
But then what? Then, why then?
Today it is legally established that high-value car racing and high-value football (in Germany) are organized within corrupt structures. It is clear that listed companies (Daimler, E.ON, Deutsche Telekom and many others) sponsor, fertilize and support such structures: they support corruption. Do the shareholders want that? Do the owners?
They cannot say they want to be positive and active because they think they can benefit from it, e.g. more sales, more customers or ....
Or can they say they are positive and active by giving discharge to corruption-running boards every year. In virtue of §120 AktG, discharge does not end their liability.
Or investors in German equities tell themselves something else, the Americans among them maybe that their judicial authorities have creamed off billions from Siemens, Daimler, MAN & Co. Here and now, the question is not whether those judicial authorities apply the same criteria at home and to the deep pockets of Europe. Here all that is to be asked is whether those investors also apply the same criteria to sponsor spending. No one wants to assume that investors themselves want to promote corrupt systems so that their investments will (still) sponsor corrupt organizations.
It is now legally established that SLEC as Grand Prix operator acted corruptly, but Daimler is still sending money? And FIFA as ruling organization of the Bundesliga acted corruptly, but Telekom, Volkswagen & Co go on sponsoring it?