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Corporate hypocrisy: Gupta deal exposes SAP CEO’s broken promises to WEF

EDINBURGH — The chief executive officer of SAP, Bill McDermott, signed a Compact sponsored by the International Business Council of the World Economic Forum to lead the world on corporate governance. Revelations in South Africa of the role of this multinational business software company in a massive corruption and state capture campaign make a mockery of his pledge to align his organisation with the best interests of society. SAP has suspended its South Africa team, but there are questions about international oversight of South African operations and the culture that allowed for key SAP individuals to turn a blind eye to questionable transactions. SAP may find itself in hot water with German and US regulators after being embroiled in a massive Gupta kickback deal. McDermott has evidently failed in his commitment among the world’s movers-and-shakers to ‘promote the highest possible standards of corporate conduct’ on his watch. – Jackie Cameron

Bill McDermott, chief executive officer of SAP AG, looks on during a panel session on cancer research, treatment and data science in Davos, Switzerland, on Tuesday, Jan. 19, 2016. Photographer: Jason Alden/Bloomberg

This is the World Economic Forum pledge SAP CEO Bill McDermott put his signature to: 

This Compact is sponsored by the International Business Council of the World Economic Forum and will be proposed for signature to all participants of the Annual Meeting 2017.

Corporations and investors are powerful actors in society. As such, their responsive and responsible leadership can significantly improve the state of the world. There is emerging consensus on the need for a new Compact for corporations, their chief executive officers and boards of directors, as well as leading investors and asset managers to create a corporate governance framework with a focus on the long-term sustainability of corporations and the long-term goals of society.

I, the undersigned, share the conviction that:

  1. Society is best served by corporations that have aligned their goals to serve the long-term goals of society. The Sustainable Development Goals offer a useful roadmap for such alignment.
  2. Short-term financial gains should not distract from the corporate and societal goals of long-term economic prosperity and social welfare.
  3. There is a need for a Compact that recalibrates the relationship between public corporations and their major investors, and conceives of corporate governance as a collaboration among corporations, shareholders and other stakeholders working together to achieve long-term value and resist short-termism.
  4. Disagreement between stakeholders is best resolved in a transparent and respectful manner, de-escalating conflictual stances wherever possible.

As a responsive and responsible leader I, the undersigned, commit to acting within the remit of my responsibilities, duties and influence to:

  1. Ensure the board oversees the definition and implementation of corporate strategies that pursue sustainable long-term value creation.
  2. Encourage periodic review of corporate governance, long-term objectives and strategies at the board level as well as clear communication between corporations, investors and other stakeholders about the outcomes.
  3. Promote meaningful engagement between the board, investors and other stakeholders that builds mutual trust and effective stewardship, and promotes the highest possible standards of corporate conduct.
  4. Publicly support the adoption of the Compact and implement policies and practices within my organization that drive transformation towards the adherence to long-term strategies and sustainable growth for the benefit of all stakeholders.

Bill McDermott on SAP leadership

Throughout our history SAP has been committed to leading with purpose. Our enduring vision is to help the world run better and improve people’s lives. Together, as citizens, companies and countries, we need to be committed to working together to drive greater progress. There is no time to wait. That’s why we are proud to have signed the Compact for Responsive and Responsible Leadership. With shared commitment and resolve, the best days are ahead for the economy, the environment and society as a whole.

Bill McDermott

CEO SAP

 

Missed the revelations about the SAP role in corruption and state capture? Catch up here:

1. #JoiningTheDots: Reading between the lines of SAP’s Gupta defensiveness

Revelations about alleged corruption at SAP South Africa should theoretically spark some kind of rational reaction from the company. But not for SAP South Africa’s office, who issued a statement on Tuesday that vehemently defended their deal with a Gupta-linked company without providing a full rebuttal.

2. Corrupt SAP exposed. Gupta bribery to pull in US, German authorities.

The tumbling #GuptaLeaks dominos have started to gather irresistible momentum. With South African law enforcers conspicuous by their silence, claiming they need the hard drives to act, the retributive focus has now swung into the global arena. Disclosures around McKinsey’s “endorsement by omission” of Gupta-driven corruption will have got US Justice Department alarm bells ringing.

3. Gupta kickback scandal: SAP suspends SA management, launches probe

A bombshell report by amaBhungane on a R100m dodgy kickback paid by SAP South Africa to a Gupta company is starting to have very serious ramifications. SAP Africa paid CAD Systems, a 3D printing company with a website that barely works and no clear track record, R100m as a success fee to win Transnet contracts. The deal stinks, from beginning to end. Brett Parker and his team have been put on administrative leave while the company is launching a probe, by a law firm and a top exec, into all contracts awarded by SAP South Africa.

4. First McKinsey, then SAP but don’t forget the Chinese – Greenblo

In the absence of enthusiasm from SA investigative authorities to undertake this scrutiny, it may well fall within the ambit of the US regulator. The SEC does have extraterritorial powers. Prominent examples are in the way that it handled money laundering at the FIFA football association and in the $19m fine it agreed with Hitachi for the inaccurate record of payments by a subsidiary to an allegedly politically-connected company in SA.

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