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Vincenz Process and Corporate Governance: A Serious Warning

The Vincenz case is about more than just the rise and fall of a once celebrated banker.

The court must decide whether former Raiffeisen boss Pierin Vincenz (left) is guilty. Still, the case is a lesson in how not to conduct business.

Michael Buholzer / Keystone

After a week, the Vincenz trial is still in full swing: the prosecution and the defense are pulling out all the stops to win the argumentative battle in front of the judges. The verdict will not come until March, and it is advisable to be cautious about forecasting how things will turn out.

There were conflicts of interest

However, the criminal trial provides numerous indications of how corporate governance in Switzerland was – or still is – in some places. In the Vincenz years, Raiffeisen was a long way from “good corporate governance”. This is shown by the excessive expenses as well as the controversial company transactions. Even some of the accused business partners of Pierin Vincenz and Beat Stocker didn’t care that they got into conflicts of interest because of their investments – the main thing was that there was a deal.

No matter how the trial ends: The Vincenz case is a warning to all those who have not taken “good corporate governance” so seriously. You should take this warning seriously.

In international comparison, Switzerland is a “clean” country. Most of the time, people not only stick to the written laws, but also to the unwritten ones because they can trust each other. But people are a little too happy to pat themselves on the back and indulge in outrage when a politician or business leader has once again misbehaved. Last seen in the case of Credit Suisse President António Horta-Osório, who broke the corona quarantine rules several times.

This outrage is always an act of self-assurance and distancing. There is often something hypocritical about that. The Swiss have also broken the quarantine rules, although they knew them very well. The Swiss also optimize their taxes excessively and “forget” one or the other sideline. It is not for nothing that more than CHF 50 billion in untaxed assets came to light from 2010 to 2019 after Switzerland introduced voluntary self-disclosure without penalty.

And in Switzerland, too, expensive wine or invitations to football games are used to get a business on the right track; in the private sector, but also in the orbit of government IT procurement. The dividing line is vague: Invite your business partner to dinner for 50 francs? That should work. Bring up a bottle of Château Pétrus for dinner? Difficult.

The “Lessons of the Fall” begin with each individual

The Vincenz trial is a lesson in how this type of business can become harmful. It has already damaged the reputation of the Raiffeisen Group; it also jeopardizes the reputation of a down-to-earth Switzerland that wants nothing to do with aloof business elites and party cadres.

This Switzerland is a reality and it should definitely be preserved. But it is built on trust: among the citizens on the one hand and between them and the state on the other. It is no coincidence that in this country tax returns are filled out independently and not the state, as in Germany, simply takes its share from the wage packet itself. It’s one of the reasons why many things work better in Switzerland than in other countries.

But every “forgotten” part-time job is poison for this trust. Similar to Stocker and Vincenz’s private deals, no matter how they are legally classified, they are poisonous for the trust between employers and their managers, who should actually be fully committed to the interests of the owners. Such business practices are probably an unavoidable by-product of the trust-based Switzerland. But if they get out of joint, they can permanently destroy this Switzerland and bring about a statistic control Switzerland. The resistance does not begin in front of the distant district court in Zurich, but in one’s own everyday life.

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