German Bild Tabloid Scandal Is More Than a Local Affair

(Bloomberg Opinion) -- Axel Springer SE’s excuse for lacking clear guidelines on workplace relationships in 2021 is that the same can be said for “most German companies.” But now that the Berlin-based publisher has bought influential U.S. peer Politico, it can no longer benchmark itself against only the local crowd. Its decision to terminate the employment of the editor of its best-selling Bild tabloid this week can be seen as tied to its growing international ambition.

Adopting broader standards has always been part of entering new markets. One lesson here is that this should apply to workplace relationships too.

German journalist Julian Reichelt was relieved of his duties on Monday, with Axel Springer saying he failed to maintain a boundary between professional and private matters and had not been truthful with the executive board about this. 

Reichelt had been the subject of an investigation by a law firm in March. That was triggered by what Axel Springer called “indications of abuse of power” in connection with alleged close relationships with female employees. Back then, the board concluded that Reichelt had made forgivable mistakes and should be given a second chance. Reichelt apologized that he “hurt people [he] was in charge of” and said he would work to “create and exemplify a new corporate culture” for the newspaper.

But on Monday Axel Springer ended Reichelt’s employment, having learned through media investigations that he was still in a relationship with a Bild employee. At the weekend, the New York Times had reported at length details of the first investigation, including that Reichelt had allegedly promoted someone with whom he had been in a relationship.

Were it not for the journalistic digging, Reichelt might still be in his former role. Even if his departure came down to more recent events, this hugely embarrassing episode raises questions about the board’s judgment in keeping him on since March, the standards it set thereafter and its subsequent supervision processes.

Some people are going to have close relationships at work. Where potential conflicts of interest arise, there’s a strong argument that the relationship should be disclosed to the company. When one half of the relationship is in a position of power, the risks are that much greater. Junior staff may feel pressured not to reject a senior colleague’s advances. The need for boundaries is evident.

Many global companies have policies for this, just as they have protocols to prevent nepotism or the allocation of company contracts to an employee’s buddies. Axel Springer says it had previously abstained from such strictures for legal reasons. In March, it decided to introduce a duty to disclose personal relationships in the workplace that may give rise to conflicts. This new obligation remains the subject of staff consultation and requires approval by the employee union before it goes into effect — as is Germany’s corporate model.

The original probe didn’t reverberate much outside the country. But Axel Springer’s $1 billion deal to buy Politico has vastly reinforced its ambition to be an international media player, following the earlier $343 million acquisition of 88% of Business Insider and the reported attempt to buy U.S. website Axios. The world is different today for Chief Executive Officer Mathias Doepfner. Suddenly his corporate culture has come under scrutiny in the U.S. market on which he’s pinned his growth strategy, and where Springer’s main shareholder — U.S. buyout firm KKR & Co. — is based.

Axel Springer will have to work harder to demonstrate its culture and processes can properly manage potential conflicts of interest. Doepfner sounded off-key with his initial comment that he’d have liked the former editor to be part of Bild’s cultural renewal but “that is no longer possible.” The CEO has since taken to YouTube to explain the company’s actions and exhort staff to speak up if they see anything constituting an abuse of power or disrespectful behavior. He was en route to Washington as he faced the camera. If your aspirations are focused on the U.S., your standards must be able to travel with you.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.

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