“Managers on a short leash” – “Religion is out”
von Heinz Gupta
Two different column titles in the daily newspapers, which have nothing to do with each other?
But maybe they have, let us take a moment to have a look at them.
To start with the first subject.
Everyone is cursing about the big, unjustified bonuses paid to bankers and the managers pay-offs.
Especially the politicians, just now while an election is looming, are particularly active and offering populist balm for the troubles of hard-up ordinary tax payers.
But they do not understand the consequences of what they are saying.
They should understand that in Germany, just as in all the western world, freedom of contract applies, meaning that anyone can sign a contract with anyone else if both partners to the contract agree to the conditions and as long as the contract is not contrary to accepted morals. But we will return to this later.
It is not only the managers’ and bankers’ greed but also, in the first instance, the stupidity of the supervisory boards and chief executives, who are “giving sugar to their monkeys”, so that they continue grabbing more and more without stopping to think that the economy is not an endless one way street leading up.
But the directors are often the ones, who make the nominations for the supervisory board or they climb to these heights themselves at the end of their active careers.
And the actual principals, the shareholders, no longer bother to go the annual general meeting, just as they no longer bother to go to the polls, because they think they cannot change anything anyway. Anyway, there are no more slap-up meals at the annual general meetings, just a few hot sausages. So the banks use their mandates and push their representatives onto the supervisory board. Simple!! The law governing shareholdings should be changed with stringent scrutiny of the board of directors by the supervisory board with the threat of liability for negligence.
But it is not the lust for money that goads the directors and bankers, it is the pure competitive thinking that drives them. They want to be on the top of the pile in their own tribe. Just like as boys, when they wanted to be the best at spitting cherry stones or at peeing the furthest.
Anyway the money stays in the pot. A large part of the managers’ pay-offs, about 50 %, goes to the state coffers.
With this money the Ministry of Finance can feed the banks, who can then distribute it as bonuses again. This closes the loop in the most perfect way, as several American banks are now doing, who have begged for state aid and are now paying their employees big bonuses again.
The banks and their legal counsels have properly demonstrated this to Mr. Obama and his financial administrators. They cite existing contracts, of course, which would have lapsed if the banks had been allowed to go bankrupt. One should also wonder what do the managers and bankers want all this money for?
Obviously the hind prefers the stag with bigger antlers. But the managers have no time at all for the finer things in life apart from their work. And incidentally they already all play golf.
At the beginning I mentioned that all contracts are valid, if they don’t offend accepted morality. But who decides what is moral? “The starry sky above me and the moral code within me” suggested Herr Kant, who otherwise drew a clear distinction between legality and morality. Or, are morals established by the parties, by the unions, by the workers, by religious communities, by the churches? Pope Benedict believes, as he makes clear in the latest encyclical, that our problems, both economic as well as political, can be solved through love of our fellow man. By love he means here respect for our fellow man and his needs. And not just the man in the neighbouring house, but for everyone worldwide, as we should all be one family.
But what are the real needs of people all over the world?
And here is another story from the press, to goes with this:
“From banker to priest”
“Although Paul Meyners has worked in the city as a fund manager since the nineteen seventies, his latest experiences have shocked him. He misses a sense of moral values in the financial sector. Money has become people’s one goal in life. So he doesn’t want to go back into the sector, but has decided to study theology and become a priest instead…”
The white raven?
Your Heinz Gupta