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The corporate scandal shook German companies into a governance crisis.

German companies have always prided themselves on being aboveboard, but this image has been eclipsed by scandals of some domestic multinational companies. These scandals are said to include hundreds of millions of euros in bribes, the purchase of pornographic services and other irregularities. Among them, there are some of the most senior corporate executives in China. A convicted company executive is a close friend of former German Chancellor gerhard schroder. He worked with the former prime minister to reform the rigid domestic labor system with great fanfare. Scandals plaguing Siemens, Volkswagen, Deutsche Bank and other companies are very serious. According to Wharton Business School and some German business management experts, German company executives decided to adopt the Anglo-American way to manage their enterprises. These measures will increase the transparency of the company, give investors more say in the operation of the company, and weaken the influence from banks. You know, banks have always played an important role in the operation of German companies, and bank executives have always occupied an important position in the corporate supervision Committee (equivalent to the American board of directors). Thomas Donaldson, a professor of law and business ethics at Wharton Business School, said that compared with the corporate crisis that plagued the United States a few years ago, the situation of German companies is slightly different; However, they have damaged the public's confidence in corporate executives in their own way. "I think the corporate crisis in Germany has the same impact as the Enron scandal in the United States. I estimate that this will prompt Germans to reflect on themselves more deeply in business management, especially corruption. " Christian Schneider, a German, is the head of the transnational research advisory group of Wharton Human Resources Center. He believes that the concentrated outbreak of many violations reminds Germany that it is necessary to take measures to improve the previously highly respected "employer and employee joint decision-making" system. Some people describe this system as a close relationship between management and labor representatives when deciding major issues of the company. Bruce Kogut is a strategy professor at INSEAD near Paris. He said that these scandals highlight that German companies have not made themselves more open and responsible. "German companies don't understand the new rules of the game," Kogat said. "They are used to the close relationship between banks and enterprises, trade unions and the government. German business culture is far from Anglo-Saxon and American business culture. " All these scandals have greatly reduced the image of German enterprises. For example, the relevant departments in the United States are investigating the case that Daimler-Chrysler has set up several secret accounts around the world to bribe foreign government officials. According to the Wall Street Journal, Daimler-Chrysler has admitted that it has "inappropriate expenses" in Africa, Asia and Eastern Europe, and has fired or suspended relevant employees. In another case, Josef Ackermann, CEO of Deutsche Bank, was accused of bribing the management of mannesmann, an engineering company acquired by British telecommunications company Vodafone. In June 2006, he paid the prosecutor about $4.2 million to close the case. Ankerman was also a member of Vodafone's supervisory board when he paid a prize of up to 72 million dollars to the head of mannesmann. Klaus Esser, former CEO of mannesmann Company, pocketed most of the prize money after agreeing to accept Vodafone's bid of $654.38+083 billion. As a condition of closing the case, Aisi agreed to pay a fine of about $6.5438+$0.9 million. After a long trial, the Dü sseldorf court acquitted Ankerman and other defendants in 2004. In 2005, the federal court asked Ankerman and other people involved to accept a new review. Although punished by the prosecution, Ankerman still served as the chairman of the management committee of Deutsche Bank. However, in recent months, the most striking events are Siemens and Volkswagen. In Siemens, officials are investigating whether the company's top management opened black gold accounts to bribe potential overseas customers. In June 2006, 200 police officers searched Siemens' offices and employees' residences and obtained thousands of documents. The whole investigation was made public. Prosecutors also claimed that some Siemens employees were found to have used a system to embezzle the company's funds. In the fiscal year ending September 30, 2006, the sales revenue of this commercial giant was $65,438+01500 million. Siemens said it was cooperating with the investigation. The Wall Street Journal reported that since the police raid, the company has admitted that it was suspected of $544 million in transactions in the past few years. Siemens also said that these mistakes were "personal actions". However, this newspaper believes that the evidence of detention and the testimony of witnesses contacted by reporters make people feel that "bribery is a very common and organized behavior in this company." The Wall Street Journal also reported that the German branch of KPMG, which provided audit services for Siemens for a long time, was also investigated for ignoring these so-called bribes in Siemens accounts. KPMG is assisting the official investigation, but denies any fault. The allegations faced by Siemens executives specifically include: two former executives of the company's power department were suspected of bribing $7.8 million to win turbine orders from the Italian national power company. According to The Wall Street Journal, in 2004, Thomas Kutschenreuter, a senior executive of Siemens, paid $50 million to BAE, a former business partner of Siemens. The newspaper said that Shuruite is cooperating with the prosecutor's investigation. He claimed that the expenditure was authorized by the management committee of Siemens, and the current CEO Klaus Kleinfeld and then CEO Heinrich von Pierer knew about it. It is said that after talking to a Saudi businessman representing BAE on the phone, Shurit went to arrange the payment. The caller will ask for a commission of $9.65438+0 million as a business cooperation he once provided to Siemens. If Siemens doesn't pay, the caller threatens that he will report to the US Securities and Exchange Commission and provide details of bribing Siemens to get a telecom contract in Saudi Arabia. Of the above $50 million, it is said that170,000 was used to pay the commission owed, and the rest was hush money. In another case, two former executives of Siemens' power department paid a bribe of $7.8 million to get an order for turbines from the Italian national power company. In mid-March this year, Andreas Kley and Horst Vigener were tried in darmstadt. The two of them claimed to be involved in bribery, but they did not violate the German law prohibiting bribery of foreign government officials, because the power company has been privatized. However, prosecutors believe that during their bribery, the Italian national power company is still owned by the state. On March 27th, another survey made Siemens worse. Femel, a member of the company's management committee, was arrested by the procuratorate in Nuremberg. He was accused of participating in the payment to William Schelsky. The latter is an official of a German trade union, whose German acronym is AUB, and has always been friendly to Siemens. According to the Wall Street Journal, prosecutors believe that the money was given to AUB through the Gesch institution to offset the influence of Germany's most powerful trade union, the German Metal Industry Union. Femel refused to admit his mistake. In February this year, Gasch was arrested on suspicion of tax evasion. The public's illegal behavior is said to involve company executives and trade union officials. In this scandal, which was played by the media as "rewarding prostitutes", the executives of Volkswagen Company were suspected of embezzling public funds and using sex parties, holiday erotic escorts and red envelopes to buy off labor representatives, that is, members of the so-called Joint Labor Committee. Public cases show us that under the management system of coordinated decision-making between employers and employees in Germany, the close relationship between managers and workers makes the labor organization have a certain say in the company's major decisions. On March 5, 2007, the case made the latest progress. Klaus Volkert, the former head of the company's powerful joint labor committee, was charged with 48 counts, including inciting employees and corruption. In June+10, 5438, Peter Hartz, the former personnel director of Volkswagen, was found guilty of approving the "money and prostitute reward" plan, and was sentenced to two years' suspended imprisonment and fined about 736,000 US dollars. He admitted that the purchase of Walcott was to influence employees' decisions and gain their support for the company's restructuring and cost reduction. German law stipulates that major decisions of large enterprises must seek the opinions of the leaders of the joint labor Committee of the company. It is reported that from 1995 to 2004, Walcott asked for and received a bonus of about 2.5 million US dollars, in addition to 786,000 US dollars, which was used for luxury travel, buying clothes and jewelry, and paying false consulting fees for him and his girlfriend. Hartz, 65, resigned from Volkswagen in 2005, and he was once widely respected in Germany. In 2002, he served as the chairman of the so-called Hasee Committee, advised Chancellor Schroeder and formulated a series of labor reform programs to reduce unemployment and revitalize the economy. Comparing the scandals in the United States, Professor Donaldson of Wharton Business School noticed that compared with the United States, the scandals of German companies were slightly different. The mistakes made by American companies and accounting firms shamed Enron, WorldCom, Tyco and others, which led to the Sarbanes-Oxley Act named after two members of Congress. "One obvious difference is that Enron and other companies involved in the accident basically failed," Donaldson said. "Although WorldCom has been restored, it has been weakened. In Siemens and Volkswagen, a devastating blow did not appear. " The second difference is that corporate corruption in Germany is not as common as in the United States. "The Enron scandal involved 65,438+03 companies," Donaldson said. "After them, the scandals of investment banks, fund management companies and new york Stock Exchange were exposed. In the past five years, we have witnessed various serious financial and accounting scandals. Whether Germany will embark on this road is still unknown. " Another difference is that corporate scandals in these two countries take different forms. In the United States, Donaldson noticed that scandals in the Enron era were usually carefully planned to raise the company's share price. Managers arbitrage in the stock market by making false accounts. However, in Germany, a large number of problems are related to bribery. "These scandals are far-reaching and shocking. Surprisingly, Germany's strict corporate supervision system can't stop them," Donaldson explained. "In every case, we have some obvious mistakes to control. Hundreds of millions of dollars flowed out of the company's door, but no one asked. " For a long time, the German legal system believed that bribing foreign officials was a necessary business expense for companies. In fact, German law once allowed enterprises to write off such expenses. This phenomenon has changed since Germany adopted the anti-corruption program 1999 formulated by the Organization for Economic Cooperation and Development. According to Donaldson, this plan originated from the Foreign Corrupt Practices Act of the United States. Donaldson said that among German businessmen, the idea that bribery is sometimes a necessary means still exists. "Today, when you communicate with German company executives, you will find this. They will say,' Germans are very high-level, but when we go out to all parts of the world, it is rough and dirty. It would be naive to say that we can still play football according to the rules of football.' In my opinion, compared with Sweden and even the United States, this view has more market in Germany. However, the practice of bribing the head of the Volkswagen Joint Labor Committee and providing pornographic services for many years is a blow to Germany's honest tradition. The relationship between employees and management Schneider, an expert on international labor relations at Wharton Business School, said that to a certain extent, the source of embarrassment between Siemens and the public lies in their similarities and differences in supervision: the unconventional way of setting up German company management committees and the important role played by trade unions in these committees. The management of German companies is divided into two layers. The lower management committee is smaller, reporting to the board of supervisors and appointed by the latter. In the company management committee, there are three different forms of employee representatives. The Work Organization Law promulgated by 1952 requires that all companies with more than 500 employees must have one-third employee representatives on the board of supervisors. 1976 * * the same decision law stipulates that companies with more than 2,000 employees must have conceptual equivalence-that is, 50% of the board of supervisors are representatives of shareholders and 50% are representatives of employees. However, when there is disagreement and the chairman of the board of supervisors needs to vote for the second time, the shareholders' representatives will definitely occupy the majority seats. Usually, the chairman of the board of supervisors is on the side of shareholders. In addition, in the board of supervisors, employees can have at most three trade union members from outside the company. These controversial "external" representatives are not necessarily related to the company and cannot directly represent the rights and interests of the company's employees. The third form of employee representatives, although limited to the coal and steel industries, does ensure equality in the board of supervisors. If the appointed trade union leader is actually a representative of the management Committee, the employee representative may veto him. Today, this special decision-making bill has limited effect because the coal and steel industries are shrinking. However, because it stipulated the most extensive labor decision-making system in German history, it has important symbolic significance for trade unions. Schneider said: "Within the EU, Germany is the only country with such a far-reaching and extensive system." "No second country wants such a system. What you do is to give trade union members and employee representatives the right to express their opinions when the company makes major decisions, including the appointment and dismissal of management Committee members, "Schneider said. "Therefore, many German company managers resist the labor decision-making system because they are appointed and dismissed by the supervisory board. This double-tier committee system will actually blur the boundaries and be criticized for conflicts of interest. The decision-making system between labor and capital is created to make employees' interests reflected in the highest entity of the company. But in big companies, employee representation is one thing, and making management decisions is another. " Schneider added that the close relationship between labor and management "is the cause of Volkswagen's problems". "In order to gain the support of the employees' representatives of the board of supervisors for the public's requirements for extending working hours and restructuring, the management of the company began to induce the trade unions to vote for them through money, holidays and bribes. If the public does not have such a management system, they will not be forced to play such games. "Chancellor Merkel has appointed a special committee to investigate the decision-making system between employers and employees and make suggestions on whether to amend it. A proposal put forward by the German Federation of Employers' Trade Unions is to reduce the number of employee representatives on the board of supervisors to one third. In fact, this is a plan implemented by all large German companies before the 1976 Act. Act 76 requires all companies with more than 2,000 employees to implement a decision-making system of 50/50 between employers and employees. Company bosses face strong opposition from trade union leaders, who actually demand to expand the scope of the national labor management decision-making system. At the same time, it is not surprising that the report submitted by the Special Committee claims that there is no need for drastic reform of this system. Scandal is different. Joerg Himmelreich, a senior member of the German Marshall Foundation in Berlin, said that it is necessary to pay attention to the differences between Volkswagen and Siemens scandals. In the eyes of the public, the so-called wrong behavior refers to the abuse of the decision-making system between employers and employees, which helped Germany stand up from the ruins of World War II and created the German economic miracle in the 1950s and 1960s. Despite the public scandal, Herr Meric believes that "most Germans are not going to give up this system. "The Siemens scandal stems from competitive pressure and needs to develop foreign business. In this case, company managers usually think that they have no choice but to "win the favor of the government" by bribery, Hemerich said. This contribution is usually needed, because infrastructure and public projects especially need the permission of government officials. If the decision-making system between employers and employees will lead to problems, Hemerich added that the dual roles played by company executives will also lead to conflicts of interest and create an atmosphere that breeds wrong behavior. At Siemens, former CEO von Pierre is also the leader of the supervisory board. "He lacks interest in solving these problems," Meric said. "This is a big question at stake: Should the current CEO be the chairman of the board of supervisors?" Hoemmerich pointed out that when Ankerman got into violation, he was both the CEO of Deutsche Bank and a member of Vodafone's supervisory board. This example reflects the long-standing practice of German bank officials that they play an important role in large companies that provide financing services. Donaldson of Wharton Business School pointed out that in fact, the intimate relationship between banks and companies is as problematic as the friendly relationship between trade unions and company management. He said that the corporate supervision system in Germany is "a system controlled by insiders and serving the interests of shareholders". Compared with American companies, German companies are different in bank financing relations. "In Germany, banks play an important role," Donaldson said. "Corporate mergers and acquisitions have existed in the United States for quite some time and are now spreading in Europe. In this process, people realize that there is a problem with this internal control method. In Germany, hostile takeovers may be supported by banks that have seats on the company's supervisory board. This is not just a moral issue; It is not an efficient system because you can't guarantee that it is a legal transaction. " The Influence on the German Spirit Kogat of INSEAD College believes that although big German companies such as Siemens have been hit by scandals, there is no need to exaggerate the influence of this corporate phenomenon on the German spirit. "The Siemens incident is shocking because it is very important to Germany and has existed for more than a century," Kogat said. "Siemens is one of the big German companies you can think of. Once they are found to have opened a secret account to pay bribes, it is of course very surprising. This kind of thing is very serious. " But Kogaote added that the positive aspect of these scandals is that the public clearly understands them through the media, which is the first step towards truly meaningful reform. "To be honest, in the past 30 or 40 years, how many German companies, or European companies, dare to say that they have done clean business with the government? People know something about many things that happened in the past, but what we don't know is the details. Maybe the good news is that the bad news is about to be exposed. " Donaldson said that the company scandal was embarrassing and did great harm to Germany's self-image, so it was imperative for the company to take effective reform measures. "Some people think that the relevant participants-investors, company management, banks, etc. -I failed to live up to everyone's trust, so the old system can no longer create good corporate management as before. " He added that any reform measures taken by the government and the business sector should not attempt to copy the economic model of Britain and the United States. "But inevitably, Germany will adopt some elements of the Anglo-American system, especially giving shareholders and external investors-investors rather than banks-more say." The recent corporate scandal also reminds us to strengthen the role of the audit committee and make some changes to the financial reporting conditions, Donaldson said. "In 2007, German enterprises were still controlled by insiders to serve the interests of shareholders. This system is beneficial to major shareholders and enterprise managers, but not to ordinary investors. Compared with the Anglo-American system, the shareholders' right to speak in the German system is much less. I still believe that overall, there is a crisis in corporate governance in Germany. "

This article comes from the Economic Forum of the National People's Congress (http://www.pinggu.org), with a detailed reference: http://www.pinggu.org/html/2007-5/1177430.html.