Brady Dougan resigned in June from Credit Suisse Group where he had been the Zurich-based bank’s CEO for eight years. This month Anshu Jain, co-CEO of Deutsche Bank, likewise resigned.
During the annual meeting of the investors of Deutsche Bank last May, Anshu Jain faced many mutinous investors and he acknowledged that a lot of things were riding on what he was going to say, and as he had difficulty with the German language, he decided to deliver his speech in English. He had to resign three weeks later amid the increasing loss of investor confidence.
Lack of language skills
Although their lack of German language skills was not the main reason for their leaving their very lucrative posts, it was one of the many issues that faced them. They were often criticized by their host countries for this point and likewise, it was a big disadvantage for them, as they lost an important tool to connect with colleagues, clients and local business shareholders. As the spokeswoman for the Association of German Banks in Berlin said, clients should understand foreign corporate leaders and as both CEOs work for a German financial institution, their main clients, specifically in Germany, spoke German and they have to be understood by their German clients.
English is not enough in a multinational setup
However, there are several multinational companies based in Europe, such as SAP, Daimler and Airbus Group, whose corporate language is English. One of the reasons given was that the choice of language would help in the quick globalization of resources and tasks, facilitate acquisition negotiations and improve integration.
But using English as their corporate language is not enough because the CEOs, representing their companies, are anticipated to manifest the local culture, which includes the language, especially at times when resentment towards the dominance of English, to the detriment of the local language, has been escalating.
While Europe is a paradise for polyglots, and the 28 member countries of the European Union recognize 24 official languages, it is always possible that there would be non-English speaking labor representatives and lenders, as well as members of the media, business regulators and local politicians.
This could help explain why it is rare to find foreign CEOs in Europe who have skills in the local language. Although CEOs are hired for their experience in management, their industry knowledge and their skills in leadership, it is very important for a foreign CEO to communicate in German if they are to head a German corporation, according to the head of the executive search firm based in Zurich, Bjorn Johnson.
It was also mentioned that although Switzerland is not a member of the EU, the country recognizes Italian, French and German as its official languages and requires company executives to speak two other languages aside from English. Based on the website of Nestle, its CEO, Paul Bulcke, who is Belgian, is a fluent speaker of Portuguese, Spanish, French, German and Dutch. Bulcke himself said that being multilingual builds a stronger connection with consumers, employees and peers, which is very critical to their business.