Sustainability for centuries: monastic governance of Austrian Benedictine abbeys.

• Author: Feldbauer-Durstmueller, Birgit

1. INTRODUCTION

   The recurrent presence of cases of corporate mismanagement, fraud or corruption in national and international media supports the assumption that dominant theoretical corporate governance and leadership approaches may not always be appropriate for providing effective solutions. This encourages scientists to search for alternative approaches to these issues. In recent years, a small number of scientists have chosen monasteries to serve as a role model for effective governance and leadership. Benedictine abbeys and the 1500-year-old "Rule of Benedict" (Fry, 1981) particularly offer a potential use for economic research (Inauen et al., 2010a; Inauen et al., 20l0b; Rost et al., 2010; Chan, McBey and Scott-Ladd, 2011; Tredget, 2002).

   European culture has been decisively influenced by Benedictine monasteries for centuries. Today's Benedictine Confederation originated with Benedict from Nursia (480/90-555/60) and the rule he established (Fry, 1981). Apart from the "Regula Benedicti", the only source regarding the life of Benedict and his monasteries is his life history, written by Pope Gregory the Great approximately 50 years after his death (Salzburger Aebtekonferenz, 1995). Today, the worldwide Benedictine Order (OSB) consists of 20 congregations with approximately 9,000 monks (SS. Patriarchae Benedicti Familiae Confoederatae, 2000).

   This paper is primary based on an initial study by Inauen and Frey in 2008. Additional closely related papers published by a Swiss group of researchers led by Emil Inauen refer to the key arguments of this study (Inauen et al. 2010a; Inauen et al. 2010b; Rost et al. 2010). As a starting point for examining the subject, Inauen and Frey empirically researched the lifespan and reasons for closures of Benedictine abbeys that have ever existed in Bavaria, Baden-Wuerttemberg and German-speaking regions of Switzerland. Their study showed that these monasteries can be regarded as extraordinary long-lasting and stable institutions, being able to solve governance problems to a high extent. In this paper, the results of an expansion study are presented and adress whether these findings apply to Austrian Benedictine abbeys as well.

   Inauen and Frey argue that the success story of monasteries is not only attributed to religious and ecclesiastical causes. In their point of view, Benedictine abbeys were able to survive for centuries because they established basic governance structures very early, relying on an elaborate system of interal and external mechanisms. We wished to asses whether this same reasoning applies when analysing the history of Austrian abbeys.

   For Inauen and Frey, monasteries serve as empirical evidence for the efficiency of alternative governance and leadership instruments. Therefore, these organizations could provide possible solutions for management problems in present-day companies and other modern forms of organizations. Based on this conclusion, they derived recommendations and improvements for corporate governance practice of (economic) organizations. Another aim of this paper was to critically reflect on this reasoning as well as on the relevance and transferability of monastic governance and leadership principles beyond the monastic sector in general.

   To address these points, the following content is devided into several sections. Before outlining the main features of Benedictine monastic governance, relationship structures in Benedictine abbeys are described by using a theoretical pattern. Methodology of the empirical study and findings on lifespan and reasons for dissolution of Austrian Benedictine abbeys are presented in Chapter Four. Chapter Five discusses the results of the study and scrutinises the main statements of Inauen and Frey (2008). In the final section, the conclusions of this paper are concisely summarised. In addition, possible directions for further research are discussed.

2. MONASTIC GOVERNANCE FROM A THEORETICAL POINT OF VIEW

   Inauen and Frey (2008) and further publications based on the results of their initial study (i.e. Rost et al, 2010) describe monasteries as pioneers of governance. They argue that the great economic success of numerous monasteries in medieval times led to a creation of considerable wealth. Despite the prohibition of individual ownership, this caused lavish behavior of monks and abbots in monastic life in many cases. Benedictine monasteries therefore established basic governance structures at a very early stage in history in order to prevent such undesirable developments, and as a result survived for centuries.

   As monasteries were confronted with issues similar to many present-day economic enterprises, the question arises of how they solved their governance problems. In this paper, the term "governance" or "corporate governance" is used for the complete system of internal and external management and control mechanisms of an organization (Steiger, 2001). Following the Swiss study (Inauen and Frey, 2008) we use principal-agent theory as a reference model for our analysis. Principal-agent theory was developed in order to describe strategic interactions between at least two contract partners, a principal and an agent (e.g., Jensen and Meckling, 1976; Arrow, 1985; Eisenhardt, 1989). The principal delegates tasks, which are carried out by the agent. In economic science, the frequently found examples of this situation are in relationsships between employer and employee or between shareholders/owners and management teams. The theory implies that all actors are utility-maximisers and driven by self-interest. Contract partners act in situations of bounded rationality and normally differ in their risk aversion (Jensen and Meckling, 1976; Eisenhardt, 1989). According to the theory, agency problems arise because principal and agent focus on divergent goals and interests on the one hand, and on the other the agent's actions cannot be fully and without costs monitored by the principal because of his lack of information (Eisenhardt, 1989; Jacobides and Croson, 2001).

   In a monastic context several principal-agent relationships can be identified. The relationship between the abbot and the officials is one of those. The constitution of the Austrian Benedictine Congregation states that the abbot has to appoint officials for certain monastic issues. There is, for instance, the representative of the abbot, the so-called prior, or monks provided with competences on specific issues in Benedictine monasteries, such as economy, education, pastoral care, and others (Austrian Benedictine Congregation 2006, Satzungen Nr. 207-237). The appointment of the officials is up to the abbot. However, before nominating the officials the abbot has to consult all members of his community (prior) or the council (other officials) (Satzungen Nr. 208). Even the prior in his role as his representative is appointed by the abbot and therefore is not primarily seen as a controlling body of the abbot but as an assisting hand, characterized by a high degree of loyality (Satzungen Nr. 214). When it comes to leadership and monitoring of the official's actions, several instruments and mechanisms are being used in monasteries. According to the constitution, it is the abbot's task to set out clearly the individual responsibilities of the officials (Satzungen Nr. 213). In reality, there are only a few explicitely and formally defined tasks. Traditions and conventions play an important role in daily monastic life. Generally speaking, the relationship between the abbot and his officials is characterized by a high degree of informal structures. Mutual trust between the individual actors as well as self-responsibility and autonomy are of utmost importance. Although all officials are accountable for their issues to the abbot and--on top of this --have an obligation to report to the convent in many cases (Satzungen Nr. 213), the principal (abbot) faces a considerable lack of information, causing a limited field of intervention in cases of undesireable developments.

   Apart from these relationships, further constellations within autonomous monasteries such as the relationships between abbot and chapter or abbot/monastic community and secular executive staff do exist. Further principal-agent constellations can be identified when extending the field of analysis to higher organizational levels in Benedictine Order (congregation/confederation) or leadership bodies of Catholic Church (pope/bishops). These realtionsships are not described in detail in this paper.

   Taking a closer look on the structures of the monastic realtionships described above, one finds several attributes which do not correspond directly...