Final Word from Tuesday, April 15, 2008
In an environment where winning public tenders almost inevitably requires violating accepted rules of corporate governance, many businesses choose the "see no evil" strategy. The boss gives his underlings the task of bringing in the government work and then asks no questions about how they get it done. If something goes wrong, denial is the boss's first line of defense. Denial has been Tatra's tactic so far, after Czech TV uncovered a contract giving a consultant a hefty commission for helping to win a Kč 2.6bn no-bid truck deal from the army. Tatra's case is interesting for two reasons. First, the consulting contract was signed before the current owners took over the company. And second, the new owners are in part Americans and are subject to the Foreign Corrupt Practices Act. It will be quite a balancing act for them to explain their company's behavior while upholding American standards of corporate governance and avoiding losing their lucrative contract.[Czech Republic Television Terex William J. Cabaniss]
Glossary of difficult words
corporate governance - the systems and rules a company uses to ensure that it is properly and honestly managed;
underling - a person lower in status or rank;
hefty - large (in this case, more than Kč 20m);
no-bid - without a tender being held;
former owners - according to Czech TV, the contract was signed on April 21, 2006, when Tatra's owner was Terex;
current owners - the ownership structure of Tatra is not entirely clear, but at least two Americans seem to be owners; the chairman of the supervisory board is ex-U.S. Amb. William Cabaniss;
Foreign Corrupt Practices Act - law from 1977 regulating the conduct of international business in the giving of bribes or other unethical actions.