GREEDY AFRICAN EXECUTIVES MUST BE PUNISHED

Dennis Kozlowski, the former CEO of American conglomerate, Tyco International, was the quintessential American business leader. During his reign as head of Tyco, the company experienced unprecedented growth. Within a span of five years, Kozlowski phenomenally transformed what was once an obscure and ailing industrial goods manufacturer, into a multi-billion dollar diversified powerhouse, comprising industries in everything from fire alarm systems, circuit protection devices, and engineering services. Indeed, during his tenure, Tyco was easily one of the biggest companies in the world, generating revenues that made competitors green with envy, and Tyco´s share price continually skyrocketed, at one time becoming the crown jewel of the New York Stock Exchange. He was hailed by investors and Wall Street analysts as one of the greatest CEOs of the 21st century. Businessweek magazine once ranked him second only to Jack Welch, the legendary former CEO of General Electric.

As Tyco´s share price increased in value, Dennis Kozlowski was adequately compensated for his efforts. He became the highest paid executive in corporate America, annually pocketing more than $100 million in salaries, bonuses and share options.

However, as his compensations increased, so did his taste for the finer things. He became excessively flamboyant, buying multi-million dollar homes in America´s choicest areas, a personal jet, helicopters, a vintage yacht, outrageously expensive cars and a $6,000 shower curtain that has come to be the ultimate symbol of American corporate greed. It did not end there. He threw a $2million birthday party for his wife in Italy´s Sardinia Islands. He suddenly became a patron of the arts; shelling out millions of dollars for works of art like Renoir and Monet.

In a bid to keep up with his new lifestyle, Dennis Kozlowski eventually plunged into company funds, and in the long run, embezzled, along with other cohorts, over $400million in what is now one of the most remembered corporate scandals in America´s history. When the fraud was uncovered, Tyco´s share value dropped to an all-time low, the company had to sell off some of its properties to survive, and Kozlowski was sentenced to several years in prison. He was disgraced and humiliated as a common petty thief. It was a warning to corporate titans in America to shun greed. The message was clear: No one was above the law.

Other classic examples of corporate greed abound: Kenneth Lay and other high-flying executives at Enron defrauded the company of millions of dollars; Bernie Ebbers of WorldCom and Canadian media mogul Conrad Black of Hollinger International are some of top executives who took their companies down as a result of their greed. Consequently, they were all tried and convicted. They are currently serving jail terms that run into several years.

A number of companies in Africa, and indeed in Kenya have gone underground as a result of corporate greed. Closer to home, we have the unfortunate examples of Sasanet and Nyaga Stockbrokers which collapsed as a result of executive greed. Many times, the perpetuators of the crime have gone Scott-free.

White-collar greed is a reality which is killing corporations in Africa, and we cannot afford to ignore it. The major cause is usually a quest for material possession, money, power and privilege. Chief executives in a bid to live up to the world´s expectations of a successful corporate leader, eventually lavish corporate funds on frivolities to look successful among their contemporaries. In the long run, they run down the companies, and impoverish stakeholders.

With the high level of corruption and moral decadence in Africa, white-collar criminals in African corporations are usually likely to get away with their crimes. Usually, when they are caught, corporate executives take refuge in powerful, influential political friends and associates who shield them from the law. Furthermore, when in the law courts, these corporate criminals are given access to the best representation money can buy, and money, in Africa´s justice system can buy quite a bit. Even when these corporate executives are tried and sentenced, they are sentenced with the most leniency, and they end up being given the cushiest conditions of confinement.

The African Justice system in general has been lenient in disciplining high-flying corporate criminals. When wealthy corporate executives enmeshed in corporate crime realize that they can easily manipulate the justice system and get away with their crime, needless to say, other corporate executives will follow suit, embezzle corporate funds and eventually ruin the company. In order to cut down on the number of corporate theft cases in Corporations in Africa, the Justice system must be impartial in dealing with the perpetuators. Lessons must be learned from the American Justice where corporate thieves are humiliated, tried and sentenced like common petty thieves. They are judged without fear or favor. If such is replicated in our African system, business leaders, no matter how connected or influential they might be, would restrain from embezzling company funds for their own selfish interests. When one greedy executive is discovered, tried and humiliated like a Scapegoat, it would definitely serve as a deterrent to other corporate executives. White-collar crime in Africa would never go away, but it can be minimized, and the Justice system has an indispensable role to play in this.