Wednesday, May 21, 2014

Pope Francis' Council for the Economy

    Below is the full text of the press release issued this morning by the Holy See Press Office on the appointment of eight cardinals and seven expert laypersons as members of the Council for the Economy:

    “Proceeding in the constitution of the new institutions created by the Motu proprio 'Fidelis dispensator et prudens' of 24 February 2014, the Holy Father has appointed eight cardinals and seven expert laypersons as members of the Council for the Economy, to serve for a five-year period:

    - Cardinal Reinhard Marx, archbishop of Munich and Freising, Germany (coordinator);

    - Cardinal Juan Luis Cipriani Thorne, archbishop of Lima, Peru;

    - Cardinal Daniel N. DiNardo, archbishop of Galveston-Houston, U.S.A.;

    - Cardinal Wilfrid Fox Napier, archbishop of Durban, South Africa;

    - Cardinal Jean-Pierre Ricard, archbishop of Bordeaux, France;

    - Cardinal Norberto Rivera Carrera, archbishop of Mexico;

    - Cardinal John Tong Hon, bishop of Hong Kong, China;

    - Cardinal Agostino Vallini, vicar general of His Holiness for the diocese of Rome;

    - Joseph F. X. Zahra, Malta (deputy coordinator);

    - Jean-Baptiste de Franssu, France;

    - John Kyle, Canada;

    - Enrique Llano Cueto, Spain;

    - Jochen Messemer, Germany;

    - Francesco Vermiglio, Italy;

    - George Yeo, Singapore.”

    Wall Street Journal
    Pope Francis appears to be taking a leaf from the corporate compliance playbook with major reforms of the Vatican’s governance and finances, aimed at guarding the Holy See’s reputation and making its dealings more transparent.
    On Monday, the Financial Information Authority, the Vatican’s anti-money-laundering unit, released its first annual report, but compliance changes at the Vatican go much further and include establishing three new bodies with jurisdiction over finance and administration.
    “What we are actually talking about is best practice governance, taking into consideration both risk management and compliance matters,” Joseph F.X. Zahra, deputy coordinator of the new structure’s Council on the Economy, told Risk & Compliance Journal in an interview.
    The objective is to bring 21st-century governance to an ancient organization whose traditional administration was inadequate to prevent the well-publicized scandals of recent years.
    The essentials of the new governance structure were sketched out by Pope Francis in a February document called a Motu Proprio. Emil Moschella, executive director of the Rutgers Center for Government Compliance and Ethics at Rutgers University in New Jersey, said the new bodies and their reporting lines embody governance and compliance best practices.
    Yet important details remain to be defined. Mr. Moschella cautions, “the concern at this point is in the ‘statutes’ that are yet to be produced that cover the workings of these units.”
    The first of the new Vatican organizations is a Council on the Economy, whose membership includes eight cardinals and seven lay experts, “an entity having oversight for the administrative and financial structures and activities of the dicasteries of the Roman Curia, the institutions linked to the Holy See, and the Vatican City State,” in the words of the document. Mr. Moschella said that this body “appears to be the same as an audit committee of a board of directors.” The Vatican announced the membership of this Council in March.
    The second new unit, a Secretariat for the Economy, is equal in rank to the Vatican Secretariat of State. It reports directly to the Pope, and has jurisdiction over operational matters including controls, policies and procedures, purchasing and human resources. “Such direct reporting is a best practice that is encouraged by compliance professionals,” Mr. Moschella explained.
    The third element of the new governance structure is an independent auditor general, described by Mr. Moschella as “a must in any large organization.” A source familiar with the new structure, but who requested not to be quoted on the details, said that the auditor general will report directly both to the Holy Father and to the Council for the Economy, and “is autonomous.” The source explained that the auditor general “can run audits on anything…it can run audits for special investigations on any of the institutions on areas of administration and finance.” The source said that the appointment of the auditor general is expected “within months.”
    “These are big innovations. They might not be big innovations for the corporate world but they are very big innovations in the world of the Holy See,” Mr. Zahra observed.
    In an interview with Risk & Compliance Journal, Rene Bruelhart of the Financial Information Authority put his organization’s own innovations in the broader context of Vatican reforms, saying, “It is a movement towards transparency, but is also a question of reputation.” The source close to the new structure announced by the Pope in February echoed Mr. Bruelhart on the importance of transparency and suggested that higher levels of disclosure will be forthcoming as a result of the changed approach to governance.
    Pope Francis’s governance changes also strike a blow against one of his bête noires: clericalism, or excessive deference to the clergy even in areas where clerical status is irrelevant. Patrick Hornbeck, professor and chair of the theology department at Fordham University in New York, said that the new structure’s provision for sharing of power between clergy and laity is “a significant and a distinctive feature of the emerging style of Francis’s papacy,” explaining, “I think that Pope Francis is recognizing that, with respect to issues like the economy, lay experts who deal in matters of finance and governance and compliance for a living might be better positioned to advise him on these issues than members of the clergy might.”
    (Gregory J. Millman is a senior columnist with Risk & Compliance Journal.  

No comments: