Scrutiny of corporate executive behaviour has had the ?unintended consequence? of putting a damper on charitable giving ? both of time and money ? by the top brass of some companies.

Donald Kramer, a senior executive with ACE Limited and chairman of the Bermuda National Dance Foundation, told an audience gathered at the weekly Hamilton Rotary meeting yesterday that there were clear signs that executive and corporate support for charity was, in some cases, being called into question.

Speaking with following his speech, Mr. Kramer said the scrutiny so far had been confined to the US and had not yet extended to Bermuda. But with many of Bermuda?s major corporations being public companies listed on US stock exchanges as well as doing business in the US, he said the scrutiny could eventually extend to corporations based on the Island.

Mr. Kramer said the question being asked, as part of this extended scrutiny, was ?are we giving someone some social advantage at the expense of corporate shareholder funds?.

The criticisms have been laid despite most companies ? with many corporations having dedicated charitable foundations ? being governed by guidelines in place for what is appropriate giving, and strict adherence to those guidelines.

Mr. Kramer, who wears both a corporate and charitable hat, said he has never felt conflicted but was concerned that some executives may let the scrutiny deter them from giving the corporate support every community needs.

?CEOs are encouraged to give time, effort and money but the scrutiny has got such that it is going to make them a little shy and reticent to opening up to new opportunities,? he said.

As an example, Mr. Kramer spoke of a CEO at a leading corporation in the US who was asked to serve on the board of a charity, but surprised some when he said he could sit on the board or give to the charity ? not both.

Mr. Kramer said the scrutiny had become so great that the CEO?s company would have shied away from contributing to the charity if he were on the board as it may be ?perceived as a misuse of corporate or foundation funds? because of concerns the executive could be giving company funds to the cause for his own social benefit.

?It is an isolated incident, but that was a shock to me. It is a case of the pendulum swinging too far,? Mr. Kramer said.

?Over the last few years, we have seen several corporate scandals which have rocked the business community and led to the failure of several large companies,? he said, adding that scrutiny of charitable giving was an ?unintended consequence? of the increasing scrutiny that followed the high-profile corporate scandals.

While abuses should be corrected, Mr. Kramer said such incidents shouldn?t be allowed to impact corporate giving.

?This is so sad,? he said.

?Such a fear of conflict is completely at variance with the honourable, 100 year tradition of Rotary, which is to serve and contribute.?

Mr. Kramer said it was all the more sad because the scandals are isolated cases.

?The investigations of some of these bad actors have called into question their motives in charitable giving, suggesting with the benefit of negative hindsight, that they used corporate funds to contribute to charitable endeavours to gain some social or personal benefits,? he said.

?It is a pendulum swinging that has gone too far in the self-scrutiny of executives. By and large, most CEOs are honest, hard working and really have a social conscience. And while a few may not have, even in those cases, the charitable works they did should not have been criticised.

?Many of the authorities are so focused on their mission that they don?t really concern themselves with collateral damage. They just think they are fixing a broken system and the collateral damage is just a consequence.?

But Mr. Kramer told corporations should recognise that scrutiny of business practices is one thing, and that appropriate support of community initiatives is something else that should be safeguarded.

?The community is the constituency of every corporation and it should be recognised that giving shareholder funds to charity is in the corporate stakeholders? best interest. We are not just giving away their money.

?We are investing in community affairs and activities that make for a healthier environment.

?I don?t think anyone should argue that we are giving away the profits of shareholders.

?What it is is a real investment in the health and welfare of our communities which helps our companies.?