Introduction to everything in economic life: After the original "eye-lined" supervision was proven to be invalid, institutionalized anti-corruption measures began to emerge. The most important manifestation lies in the rapid rise of audit and supervision departments. Source丨21st

Entertaining everything in economic life

Introduction: After the original "eye-liner" supervision was proven to be invalid, institutionalized anti-corruption measures began to emerge. The most important manifestation lies in the rapid rise of audit and supervision departments.

Source丨21st Century Business Herald (ID: jjbd21)

Reporter丨 Zhang Min

Edited by 丨 Lin Hong, Zhang Nan

Picture source / Tuchong Creative

"Have you ever seen a real estate company's anti-corruption campaign?"

"The office of a deputy general manager was empty for several days, and at first everyone thought he was on a business trip. After a long time, the administrative staff cleaned up the office and then changed it to a conference room - because the boss felt unlucky."

"Sometimes, we only knew something was wrong when we saw the news. In the company, we often only sent a resignation notice."

This is the original sentence of Wang Yang, an employee of the design department of a large real estate company in Beijing, when he was interviewed by 21st Century Business Herald. Wang Yang said that within enterprises, anti-corruption is often not so much.

In recent years, the anti-corruption actions of real estate companies have increased significantly, and are becoming public from private.

An unprecedented storm

Picture source / Tuchuang Creative

Just two days ago, a sudden announcement made Xinhualian fall into the cusp of public opinion - the former chairman of the company, Su Bo, was taken away by the Public Security Bureau to assist in the investigation, and he has been in office for less than a year.

According to an internal employee of Xinhualian to 21st Century Business Herald, Su Bo's assistance in the investigation was the result of Xinhualian's senior management launching internal anti-corruption and actively reporting the case to the public security organs. Su Bo's possible corruption behavior is concentrated in the real estate field.

In fact, Xinhualian is only one of the many cases of anti-corruption by real estate companies this year. According to incomplete statistics from 21 Data News Laboratory, since 2019, at least ten real estate companies including COFCO , Country Garden , Longshi, Poly , Sunac , Wanda , Fosun , Midea Real Estate, Jinke, Xinhualian have made their anti-corruption actions public, and more than 30 people are involved in the case.

Review of anti-corruption cases in the real estate industry

2019

This is not a simple coincidence.

Since 2016, the real estate market has ushered in a "best years" and real estate companies have taken the opportunity to significantly expand their scale. However, due to the slow upgrade of management systems, the risk points of corruption have increased rapidly. The purpose of publicly anti-corruption is to consider setting an example. As Li Hongjun, head of the audit department of a large real estate company in Beijing, said, "Open anti-corruption is also for one's own people to see." Behind this is the change in the management ideas of real estate companies.

In recent years, the strengthening of the status of auditing, supervision and other departments, as well as the intervention of law enforcement agencies, means that internal and external supervision of enterprises is being strengthened. At the same time, the establishment of mechanisms such as regional defense replacement and headquarters functions will also help curb the occurrence of corruption. Real estate companies are working on large scale while fixing system vulnerabilities.

"The original extensive management is too outdated," said Li Hongjun.

"Leaked Clippers"

Due to the huge benefits involved, long approval links and insufficient constraint mechanisms, the real estate industry has always been regarded as a severely affected area of ​​corruption.

Li Hongjun, who has a master's degree in law, once served as deputy procurator-general in a grassroots procuratorate in Beijing. In his opinion:

real estate companies are "Party B" in front of government and banks, but in front of construction companies, design companies, sales channel companies, advertising companies, and consulting companies, they are "Party A".

In the real estate industry, investment, engineering, and sales are recognized as lack of fertilizers, but corruption is also prone to occur in design, advertising, landscaping, and even personnel.

More than 0 respondents confirmed to 21st Century Business Herald that the head of a real estate company's human resources accepted bribes from the headhunter company and accepted his recommended senior professional manager , which is not new in the industry.

In recent years, as housing prices rise, the amount involved in corruption has also become huge.

In September this year, the vice president of Hainan Atlantis Business and Travel Development Co., Ltd., a subsidiary of Fosun International, and two subordinates sold some apartments and villas to home buyers at a higher price, making a profit of nearly 200 million yuan.

Some real estate companies revealed that in a single real estate project, the amount of corruption involved in corruption is often in the order of tens of millions or even hundreds of millions. The loss on the

amount is only part of it.

Li Hongjun, head of the audit department of a large real estate company in Beijing mentioned above, said:

If the real estate company is described as a "leakage Clipper", the corruption case is a loophole on the ship. Although it is not big, it will have an impact on the company's product quality, brand image, profit, goodwill, etc.

Sunshine City Group Executive Vice President Wu Jianbin His concept of "three-year adjustment period" was mentioned to 21st Century Business Herald, that is, real estate companies spend one year to increase their performance, and then spend two years to adjust their management structure, personnel structure, assessment mechanism, etc. to meet the needs of new scales.

According to this rule, in the period of rapid expansion in recent years, unless special means are used, the management structure of real estate companies will easily lag behind large-scale development.

The out-of-control

scale expansion is mainly reflected in whether the headquarters can effectively control and control regional companies.

Zheng Lei, vice president of a Fujian-based real estate company, told the 21st Century Business Herald reporter that there is a management radius between the headquarters and regional companies. The larger the scale, the larger the management radius. No matter how perfect the system is, it will inevitably lead to loss of management efficiency.

In the past, the means to make up for losses were quite extensive. The management structure of many regional companies is "three-legged". This architecture seems stable, but it is actually very fragile.

What is the "three-legged three-legged tripod"? The first part of the

district is the "Border Official" and is the general person in charge of the area; the first part of the

sub-district is business-type, mostly local people or have deep roots in the local area and is responsible for developing business; the first part of the

sub-district is assigned by the headquarters, called auxiliary, but in fact it exercises supervision.

According to Zheng Lei's observation, in actual operations, there are few successful cases. There are two most common situations: one is that the three people form factions, constrain each other, and affect business progress; the other is that the three people form a group to form regional forces and breed mass corruption.

Carefully study the corruption cases of real estate companies in recent years, and you may find that there are more mass corruption. In addition to the management structure mentioned above, the reason why

has caused this phenomenon is that in recent years, professional managers have high mobility and often have "organized" flows. A senior professional manager will take many "his own people" to change jobs. Although this is convenient for work, it is also easy to form a small circle and breed mass corruption.

The rise of auditors

And after the original "eye-liner" supervision was proven to be invalid, institutionalized anti-corruption measures began to emerge. The most important manifestation lies in the rapid rise of audit and supervision departments.

Image source / 21st Century Business Herald

Zheng Lei said: Before

, many corporate audit and supervision departments were "decorations". As long as they did not involve real major cases, most of the work every year was a walk-through form. The rise of the audit department can not only solve the management problems of regional companies, but also effectively supervise the functional departments of the headquarters.

In the real estate industry, the most famous audit department comes from Wanda.

Wanda Audit Department was established in 2001. Its members are composed of professional talents in finance, engineering, budget, land, water and electricity. The current person in charge Gao Qian is the only female executive of Wanda Business.

Image source / Wanda official website

Wanda Audit Department has been given great authority. Wanda Group Chairman Wang Jianlin wrote in the book " Wanda Philosophy ":

I personally do not take charge of specific business in the group. The only department in charge is the audit department. The audit department is equivalent to the discipline inspection commission of Wanda Group. "The audit notification is the most powerful. Once it is issued, it means that someone is fired or punished more severely.

In 2015, Wanda Audit Center investigated and dealt with corruption by 18 people including the former deputy general manager of the Xi'an Project Company; in 2017, 263 violations were investigated and dealt with, 129 people were terminated, and 3 cases were filed for judicial cases, recovering losses of 130 million yuan for the enterprise.

In recent years, many companies have spent a lot of money to recruit audit and supervisors with professional backgrounds, and Li Hongjun is one of them. He told 21st Century Business Herald that he had gained the trust of his boss. In addition to supervision, its main work will also assist the company in building and improving internal systems to block the source of corruption.

At the same time, the management system is also slowly upgrading, and many of the terms are helpful to anti-corruption. For example, flattening the management structure, implementing regional defense replacement mechanisms, implementing the headquarters functional personnel subsidence mechanism, etc.

Let go of his loyalty and take up the law

On the morning of August 1, 2018, two Wanda executives Yin Jianwu and Jin Zhen were taken away by the Chaoyang police on the headquarters of Wanda Group on Jianguomenwai Street, Beijing for suspected use of their positions to seek personal gain. Previously, the two served as deputy general manager and general manager of Wanda Group's central marketing.

Image source / Tucumong

This extremely impactful scene is rare in the anti-corruption of Chinese real estate companies. As Wang Yang said, most of the internal anti-corruption of enterprises is handled in a low-key manner. The common result is that the parties refund the money, return the stolen money, and then return it. Even if law enforcement agencies intervene, companies rarely make a statement.

Li Hongjun believes that China's real estate industry still has some "reality in the world" . Many senior executives conquer the world with their bosses. Later, they hired professional managers and often called each other brothers to their bosses. So, how can you bear to send your ‘brother’ to prison?

In addition, many parties to corruption cases have played an important role in the development of the company, and are even loyal ministers. Thinking of this, some bosses will be merciful and choose to "give a decent".

Nowadays, high-profile and open anti-corruption practices like Wanda are still not a common phenomenon, but the bosses' ideas are changing.

In June 2015, the China Enterprise Anti-Fraud Alliance was established in Shanghai. This is the first private non-profit cooperative organization initiated by enterprises to target anti-fraud. Among the 10 initiated companies and institutions, there are three real estate companies: Vanke, Country Garden and Shimao.

The institution "focuses on the functional areas of internal audit, supervision, risk control, legal affairs, integrity, compliance, etc.", and now has 545 members, including 116 real estate companies.

"Bosses are beginning to realize a problem. If a person is sheltered due to corruption, he may make the same mistake in another real estate company. At this time, the reputation of his old boss in the industry will be affected." Li Hongjun said.

At the same time, as the industry enters the era of professional managers, the human touch is gradually fading.

Yan Yuejin, director of the think tank center of Shanghai E-House Real Estate Research Institute, told 21st Century Business Herald that like Wanda, many companies are promoting "high salary to maintain integrity", and the treatment of professional managers has also risen. Under this circumstance, the company's tolerance for corruption has decreased significantly.

Yan Yuejin said that in modern enterprise governance, both labor and capital should focus on contractual relationships. At the same time, in industries where corruption costs hundreds of millions of yuan, the law must be absolutely indispensable.

According to the "2018 Survey on the Current Situation of the Chinese Enterprises Anti-Fraud Alliance" released by PwC, after the corruption occurred, the total amount recovered by enterprises was only 18% of the direct economic losses. Loses that cannot be accurately counted include damage to the corporate atmosphere, goodwill loss and subsequent operation interruptions, so the actual losses are much larger than the book number.

But Li Hongjun believes that:

public anti-corruption has at least taken the first step in legal governance of real estate companies, and is crucial for the large-scale but poor reputation of the real estate industry. This approach is not only for the outside world to see, but also for practitioners.

Friends, what do you think of this internal anti-corruption storm in the real estate industry?