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Thank you Chairman Volcker, Ambassadors Ischinger, Kastrup, and Kimmitt, Consul General von der Planitz, AICGS Chairmen Langhammmer and Sekulow and honored guests I'm delighted that you all were able to find time in your busy schedules to come here this evening and join me, and Deutsche Bank, in supporting this outstanding organization, The American Institute for Contemporary German Studies. This institute has done so much in bringing together important thinkers and leaders from all walks of life, so that we can continue to strengthen the ties between Germany and the United States of America, and indeed, between the two most important bastions of freedom and democracy – Europe and the United States.
It is an honor to receive such an award, for Global Leadership, before such a distinguished group of guests. However, I am struck, as you with the impression, of how much our expectations of leadership have changed in the time since September 11. In the past six weeks, all of us who lead organizations – from CEO's to diplomats to government leaders and so on– are much more acutely aware of the awesome and unavoidable challenges of leadership
When I was contacted some months ago by the Institute about this evening,
our hopes, our concerns and preoccupations were quite different than they are
today. Although economies were slowing and the technology sector was not flying
quite so high, for the most part, it was business as usual. There was some
uncertainty about how things would develop, but for those of us who had been in
business more than 10 years, we understood how to manage through a
Now more than ever, citizens on both sides of the Atlantic are asked to look to our elected leaders for guidance about living with this new uncertainty. We are asked to place trust in them to make the right decisions. We do so with the unbreakable belief in our system and structures in all of which the concept of freedom plays a fundamental role. And all of us are asked to take on responsibilities of global leadership – to recognize the immense task ahead of us all, and also the importance of what's at stake in this battle.
And, it should come as no surprise to anyone who has been involved with the Institute that the partnership between the U.S. and its European allies is critical in shaping the course of this struggle. After all, as the AICGS has shown, the alliance between the U.S. and Germany, as well as other European nations, is one based on inter-personal contacts, and common values and goals. As Indira Gandhi rightfully pointed out, "Leadership at one time meant muscles; but today it means getting along with people."
Europe and America have much in common. Our shared history and culture --
both great and tragic at the same time– affords us valuable perspectives and
offers us guidance. Our economic system has enabled modern, educated capitalism
to flourish and as a result reduced poverty, bringing prosperity and equality of
opportunity to more and more people far beyond these two continents. Our system
of law and justice provides the structures in which we define basic human rights
and responsibilities. These collective values are all derived from the
fundamental idea of individual freedom. Those liberties that our system affords
us, liberties we enjoy but which also place on us a shared burden to maintain
such free societies in a dangerous world.
The fact is that our enemies are opposed to any civilized society – whether it is rooted in Christian, Jewish, Islamic, Hindu or other ethics and values. They are enemies of civilization, outsiders, who have been left behind – often of their own free will – by a process that has otherwise been responsible for so much good – we call it globalization.
John Kennedy said back in 1960, "It is time for a new generation of
leadership, to cope with new problems and new opportunities." In some respect
these words ring truer today than ever before. It is easy to think that
globalization is well-established. In an era of multinational corporations,
communication networks that span the globe, and the dissolution of previously
impermeable national borders, the power of markets to influence change around
the world grows stronger each day. Yet, globalization is still very much in the
process of emerging and developing:
Economically – over the past half-century, both the United States and Europe have taken the lead in building a global market economy, underpinned by free trade and the free flow of capital, and supported by international institutions such as the IMF and the World Bank. Unquestionably, this system is bringing prosperity to an unprecedented number of people, even though in the initial stages of this process, a continent as large as Africa seems to be left behind – an issue that must certainly be addressed thoroughly.
And second, politically – proliferation of freedom, democracy and human rights have accelerated tremendously over the past decade. International dialogue between governments, businesses, NGOs and individual citizens has helped to spread the ideas of individual liberties.
Globalization, however, has some very strong opponents. We have seen them in the streets of Seattle, Prague, Davos and Genoa. Although I strongly disagree with their premise that globalization is inherently harmful to the poorest nations, to the environment or native populations, I respect and defend their right to voice their opinions, make their concerns known and foster public debate. For the few who choose to express themselves through violence, their methods have put them in very poor company. For the leaders of the corporations who are the main players in this process known as globalization, many of us may have spent too little time paying attention to the concerns that our activities were causing and For globalization to work, there must be communication. For communication to work, there must be dialogue.
Tragically, there are also those who categorically and murderously reject globalization, and in doing so, have also expressed their opposition to capitalism and, indeed, all modern civilizations – to the extent that any institution, country, or people who opposes their extreme view are defined as [the] enemy. It is these people that all of us must stand up to.
We must first recognize that globalization is not a certainty. It is a movement, but a movement that is basically favorable, even though if unattended, or used irresponsibly, it can have unintended, negative consequences.
It is also up to us to ensure that the benefits of globalization, including a higher rate of economic growth in the world economy, reach each nation that wishes to take part. Free trade and the free flow of capital tend to benefit most economies world-wide. However, there are many states left behind, particularly in Africa and selectively in Asia, in which governance and economic structures are inadequate and people live in horrendous conditions. We must listen to them, care for them and work with them to overcome their difficulties in a manner that fosters initiative and preserves cultural integrity.
Globalization is now at a precarious stage. Our choice is crystal clear: Retreat and give into isolationism and protectionism, cowering under continued threats – as they are sure to come in a steady stream from the enemies of globalization; or move forward with determination, and be as active and committed to making globalization a positive good as its adversaries are in their opposition. Most importantly, we must understand the fundamental truth in what UN Secretary General Kofi Annan said in Davos this year, "if we can not make globalization work for all, in the end it will work for no one." That is what we must do to defeat our enemies – continue to make globalization work for everyone. And to do so will take a partnership of governments, NGOs and multi-national corporations.
Let us remember that at the turn of the last century, the world was, in
many respects, going through an era of globalization not unlike that in which we
presently find ourselves. Some have described this process as the world
shrinking from a size large to a size medium. But that evolution was stunted by
the cataclysms of two World Wars and the sharp divisions of the Cold War system.
With the waning of major totalitarian / utopian ideologies, and spurred by
economic forces as well as technological developments, especially in
communications, the world has begun to shrink from a size medium to a size
This process has been carried out in large part by multi-national corporations working within the global financial markets. As these corporations straddle national borders and capital flows freely around the world, the power of the "market" is seemingly emerging to become something much greater than any one nation-state. We have learned, however, that uncontrolled, market forces left to build-up or destroy in their own, almost instinctive manner, may not, in fact, be capable of making globalization work for everyone.
After Sept. 11, security concerns rank first, with the democratic state as the key actor providing it. Let me be clear: the challenge is not only military, it is as also political, economic [and social].
It is no secret that many multi-national corporations, when they are not operating in the democratic nations from which most originate, often conduct business in a manner that would not be permitted in their home countries. As the institutions that most benefit from globalization, corporations must understand that it is in their interest to ensure that globalization is both just and is sustainable.
The very nature of open societies, with free press and free speech, should ensure that corporations are unable to act with indifference when their actions – whether material or moral – are detrimental and offensive to people living in a democracy. The threat of a damaged reputation and the consequences of losing market share as a result is a an effective incentive for responsible behavior among corporations. And NGOs and governments can play an important role as advocates, as watchdogs, and as partners in this process.
The best example of what can be done comes from Kofi Annan's leadership. In a courageous and innovative effort to bring us together, the UN established the Global Compact. With nine basic principles in the area of Human Rights, Labor and the Environment, corporations are encouraged to act responsibly, regardless of where they do business around the world, and to learn from each other's experience, as well as from civil society and labor organizations with local and international interests. Deutsche Bank, as an original signatory of the Compact, strongly supports these efforts and has worked closely with the Global Compact office to encourage other corporations to join.
The United Nations has also done an excellent job in enlisting NGOs to support the Compact. NGOs are doing an increasingly thorough job of exposing inappropriate practices and bringing them to the attention of first the corporation and then the public. They have forced manufactures and retailers to think very carefully about who supplies them and they have forced banks to be even more cautious about who they are financing. As a global institution with a highly recognizable brand, Deutsche Bank is, in some respects, proud to be watched by such NGOs. Rather than irritation at criticism, we welcome the self-evaluation that it motivates and the need to be increasingly vigilant in our daily business practices. Two recent examples of this new dynamic occurred when shareholders of ours made us aware at our Annual General Meeting of their concern for a mining operation in Greece and a polite, yet forceful e-mail campaign asking us to reconsider the wisdom of financing a specific pipe-line in Ecuador – after carefully reviewing this project and based on our guidelines and values, we decided against providing financing for the plan.
These are the checks and balances of globalization. Responsible corporate leaders should understand this and welcome dialogue with responsible NGOs and governmental institutions willing to share their knowledge and perspectives in order to bring added-value for both the corporation and society.
Of course, of these three groups, it is the multi-national corporations
about which I can best speak, and I will lean on my own experience and the
company I represent as a specific example.
Deutsche Bank has taken full advantage of the past several years to make ourselves as competitive as possible in this globalized world. We have acquired several other institutions, including Bankers Trust, and just three weeks ago, Deutsche Bank, as a sign of its long-term confidence in New York and the American financial markets, listed on the NYSE with globally registered shares. We also announced the purchase of Scudder Asset Management, providing us with a solid asset management base to help us grow core business of ours. With nearly 100,000 employees in 70 countries and around EURO 1 trillion in assets under management, there is no doubt that Deutsche Bank is a truly global corporation.
Indeed, we have taken several other steps to prepare ourselves for global competition. These steps are based on my firm belief that our success is dependent upon our dedication to certain values regardless of where we may do business. One does not, however, shape a corporate culture by merely formulating a list of values and creating slick advertising to show these to the world. We have to live this values – they must be as organic to a company as democratic values are to a government.
Deutsche Bank has a long and strong tradition of acting as a good corporate citizen in all the locations we do business and around the world.
Included among this are local institutions in Europe, Asia and in America that work to enable disadvantaged people help themselves and enrich their communities through education, arts and culture.
But companies must also go far beyond their areas of expertise – such as
finance – to think about how they are affecting the world around them. At
Deutsche Bank, when we talk about the environment, we speak regularly of
sustainable development. It includes an understanding for what has become known
as the "triple bottom line" namely Economy, Ecology, and Social Responsibility.
According to its well-known definition, Sustainable Development means living off
the interest the earth provides while not depleting its capital.
Corporate citizenship is an important part of our identity. But, it means much more than traditional philanthropic enterprises. It is all about global governance. It is about designing global rules by which to live. It is about not forgetting our roots as part of a free and democratic society regardless of where we may be in the world. It is about answering the questions posed by the NGOs before they get asked, and it is about giving the idealistic college student protesting in the streets confidence that his or her concerns are being addressed responsibly. We must uphold the values that have been intrinsic to our success – transparency, legitimacy, democracy.
Lastly, of great import to Deutsche Bank, is our commitment to foster international dialogue. In years past, when NGOs and corporations merely shouted at one another, things moved very slowly. Now that they sit together and have learned each other's language, understanding has led to progress. Living in a world which is "size small" means living with everyone as your neighbor, as long as they do not infringe upon your rights.
Forging ties between philosophical and ideological neighbors is what the Institute has been so successful at doing. It has allowed Germans and Americans to not just live next to each other, but to foster deep understanding and warm links between our two nations. In the process it has strengthened the bonds that unite us as we go forward, welcoming other neighbors into our midst.
And we must continue this important work, maintaining our connections even as we build new ones with other nations. That's why, in addition to our ongoing support for all their outstanding work of the Institute we are also helping others in fulfilling our shared goals. It has been announced that Deutsche Bank is supporting with a donation to "TOP - Transatlantic Outreach Programme for American Teachers", which is dedicated to opening dialogue and creating even stronger bonds between the United States and Europe. By bringing social science teachers from the United States to Europe and specifically Berlin, a cosmopolitan city in the heart of Europe with strong influences from both East and West, this new program will introduce teachers to the "New Europe" with the goal of promoting dialogue and dispelling preconceived notions.
In addition, to reinforce the American-German friendship and further the goals of the Institute that brought us here tonight, I would like say that Deutsche Bank is supporting a new research project on the "American view of Germany".
By continuing to show our commitment to this great city – whether it be
by being here today or reiterating our determination to enlarge our presence in
downtown Manhattan or trading Deutsche Bank's shares now daily on the NYSE,
these are all manifestations of what we know to be true – that the tragedy of
Sept. 11 has changed our lives, but it will not defeat us, and our actions will
solidify that pledge.
As we get back to business, we will go on building a better world, one in which globalization is the key process for delivering economic prosperity, equality of opportunity, and political freedoms to more people.
We will continue to nourish and strengthen the Transatlantic partnership between Europe and America that is the engine for globalization, just as it was the birthplace of modern capitalism and the basis of democracy.
And all of us – being governments, corporations or individuals – will commit ourselves to continue playing our full part in moving forward with globalization and defeating the forces of reaction that would overthrow our system by denying us the freedom that has built it.
Thank you ladies and gentlemen.
Deutsche Bank CEO Receives Leadership Prize