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(Applause)
Well, I hope you haven't read Shakespeare.
First thing to do: let's kill all the lawyers.
And I hope I will survive the next few minutes.
I chose the title, and everybody I spoke to this evening,
asked me: "What will you talk about?"
And I can tell you, that when I chose this title
I didn't know it.
This title is [unclear],
it's a truism by Jenny Hall,
an American artist I admire very much.
And this title suits very well the things
I would like to explain to you.
And you will see that a lot of points I touch,
a bit from a little perspective,
have already been mentioned, especially by Debra and Dominic this evening.
I come from another side and I focus very much on
firms and their managers.
So, I'm glad I have glasses and a bit longer hair,
no blazer, but I have, I hope, the assets for a little success.
What we have gone through the last two years,
at least since Lehman, November 2008,
is that we had to recognise
that all the thoughts about self-regulation,
about compliant behaviour of firms
were very much deceived.
And, what I now suggest is that you image to yourself,
that you like the film "The Club of The Dead Poets",
who stand like the headmaster on the table,
look around in the large field of corporate governance and compliance.
And I will pick up some plants for you and explain it for them.
This is kind of biodiversity in another way,
but you know this are also living systems.
And sometimes they function. And sometimes they do not.
The big question today, if you read the newspaper,
is about regulation, is about standards.
And everybody, this is an agreement that we can fix
once that this culture of recklessness we have observed
has to be stopped.
But how it should be stopped,
there are different opinions,
and a lot of managers already
now again behave in a way,
like a rearrangement of the deck chairs
on the Titanic after it hit the iceberg.
With that I want to say they don't see
the importance of regulation.
And I will explain to you that I do not share this opinion.
When you go back to the year 2004,
regulation was the end-word of the year.
Everybody talked about the regulation and said,
"Oh, it's a mess. You shouldn't regulate the economy.
Let business do the business. That's why it exists."
And today, a lot of people have another perception.
I think that the free market cannot operate without
a highly regulated environment.
And enforcement is key.
If you do not endorse and inform -- enforce the regulations
you have formulated, you will fail.
We all know that you shouldn't believe pop songs.
If you have been to California and know the song:
"It never rains in Southern California"
It's a lie. (Laughter)
But there's another song that is true.
That you cannot buy love, and you cannot buy trust.
You have to earn it.
And when we see now the corporate environment --
Oh, I'm an idiot in technology!
(Laughter)
Then you see that it's very much
designed by a conflict of interests.
And I will focus now on the conflict of interests
we have in the subject of corporate governance.
But I want to mention that a lot of business models,
especially in the financial sector,
are very much based on conflict of interest.
And these are more and more perceived
as [a] kind of corruption.
If you imagine the case of Lehman Brothers,
of all the securities that have been sold,
also in Switzerland by banks.
These were advisers, sold themselves as advisers,
but at the end they were sellers, like car sellers.
They wanted to sell securities because they got kickbacks,
that's a kind of corruption.
Then what you also have in the corporate environment,
especially, also in the financial sector,
is an anticipatory obedience.
That means that the behaviour of the management as role model
has a great impact on the behaviour of the employees.
And here you can take the case of UPS as well,
who on the paper was a model of good corporate governance,
of good corporate compliance.
But what you had in reality was that the incentive system
led the regulations, the internal regulations,
let them be void and null, because people didn't know
how to behave in a proper way,
because the signs they had from the top management
were contradicting their own internal regulations.
Then you have the phenomena,
that rumors about abuse of positions by managers
affect the behaviour of the people working in organizations.
And it wasn't mentioned,
but I'm also charging white collar crimes.
I specialize in such cases.
And here you see often the argumentation of people
who stand in front of the court, that they say:
"You know, if you had seen the management,
what they do. What I did,
that's just small petty things.
Nothing what the others didn't do as well."
And you see here how the system of values is undermined.
Then, another point I would like to mention is
we should stop --
and this is for me personally a very important point --
to think that greed is a kind of intelligence.
Being greedy is a sign of narcissism and mediocrity,
it's not a sign of excellence.
When we now come back to the aspects of corporate governance,
I would like to mention first the Agency Theory.
This is a theory dating from the first publication in '32.
And it focuses... I want to read that:
"That the interest[s] of the directors in a firm and managers
can diverge from that of the owners of the firm.
And as reality shows, and has shown, often do so."
In the light of the financial crisis,
many senior managers have not only shown lack of talent,
but also a clouded judgment regarding their own interest
and that what they consider the interest of others.
When we now go back to the Swiss law,
then it's interesting,
and I have looked it up for this evening, that:
"conflicts of interest in our legislations", in the quote,
"of obligation governing cooperations and other provisions,
it's hardly mentioned one."
And if we then go back to the international comparison,
if we see where do we stand in Switzerland.
I found a report by The World Bank, where Switzerland
rates 165 on the index of protecting investors.
It's an overall ranking of 21 for doing business in Switzerland.
So the importance of the paradigm of the Agency Theory
is very important,
if we talk about corporate governance.
And here I come to the notion of compliance.
And if you see the other institutional factors,
you also mentioned, when you spoke, Dominic, about values,
there we have moral norms, social norms, ethics and reputation.
And here we come to the concept of behaviour of compliance,
which is a form of risk management,
and now you see why I chose the title:
"Protect me from what I want."
Protect the firms, but protect also the managers
from what they want.
That means they have to manage their reputation
and their legal risks.
Mark has spoken about the reputation risk, I won't go into that,
but I will slightly focus now on the legal risks.
The notion of compliance consists today of three factors:
these are the legal risks I mentioned,
then the part of integrity, which says: "You do what you say,
you say what you do, and you do it in a transparent way."
A compliant behaviour today is not only for the firms
in the financial sector licensed to operate.
We have these notions since '93-'94 in Switzerland there was
(Swiss Name of a Bank)
formally the first bank who introduce[d] this concept and this position.
And today you find it overall in the economy of Switzerland
and in the world as such.
And the third factor of compliance is that what we're all went into
is the respect for the context.
And I would like to focus on that bit from another subject.
If you see the discussion about Swiss banking secrecy,
and tax legislation of other countries.
Then you see that today the expectation of the society is that
tax law and tax things are treated like other things,
and you have to respect the law also of foreign countries.
And this concept we had in Switzerland, about banking secrecy,
but also the way we discussed about tax policies of other countries, is dead.
So this respect for a context mirrors then in the respect
you have from the civil society, as such,
and from other countries as well.
I have here, I will not comment on that third [one]
because of the time.
A wonderful sentence by a judge I admire very much - Brandeis,
important judge in the 1920's in the US.
And he speaks about standards.
And when we speak about standards,
then we have to focus on the fact that
in our society today, it's not only the legislation that defines
what we have to do, or what we shouldn't do.
But it's a major impact now, comes from NGO's
and intergovernmental organizations that define standards,
and expect firms and nations to fulfil these standards.
So, the consequence of this development
is that you must see that
the legislation does not define anymore what you can do,
and what you shouldn't do.
From firms, I speak about the respect for the context,
is expected that they today
take into consideration by their decisions
for instance: global warming, social consequences, etc. of their behaviour.
And if you see now these developments with these suicides in Taiwan,
of workers in firms,
so in the chain where you create services and products,
you have to take into consideration
what would be the consequences for others as well.
One example of a firm who does that consciously
today is Siemens, after this big crisis it went through.
They have now, they try now, to really live after these words,
not only focus,
write that on the paper,
but really do it.
So, let's go back to the development
I told you we have today, and Switzerland is touched
as any other country as well.
60% of the agenda of the Swiss Parliament
is designed by developments in international organizations like:
OECD, or others.
And we have [an] erosion of power of the political authority as we know it.
We have "soft law".
"Soft law" with this word to describe the standards you have to follow.
It's not written law,
"hard law" but nevertheless this behaviour is expected.
Then we have other developments, Dominic mentioned as well.
I found this notion of desert cultural generation,
very interesting.
And you have this responsibility of business to society.
Whoever has read Lumen, knows that:
business economy is not the society, it's a part.
It's a system in the system society. So managers
should not focus on the fact that they think
they are not understood by us,
or politicians,
They should regard themselves
as part of a responsible society.
Interesting also for you, that we have a reactive process.
That means that standards often finish as law, as national law.
We have this for example:
in the fight against corruption in Switzerland.
Since some years, corruption is a penal,
it's fixed in the penal court.
And imagine, 5-6 years ago
you could deduct from taxes the bribes you had paid.
(Laughter)
Today you cannot imagine to do that.
So, to finish,
where is the power?
I think, and this was mentioned with other words today as well.
We need more up-standers, not bystanders.
I think the most damaging that happens today
is an opportunistic behaviour.
When people are quiet,
do not stand up and say what they see, and what they think.
Why I say that?
I finish again with Jenny Hall, so people will not behave
if they have nothing to lose
in the moment where they have an individual responsibility
for their behaviour,
They will think twice about what they do, or what they don't.
That's my message.
(Applause)