Fast changing (regulatory) environment requires excellence on German Supervisory Boards. My top five learnings from “Exzellenzprogramm für Aufsichtsräte”
Under the motto “Good corporate governance requires excellent supervisory boards”, I participated in a five-day seminar including topics that are highly relevant for current and future members of supervisory boards such as corporate governance, accounting & financial statements, legal aspects as well as strategy. These five days were the beginning of an overall nine-day seminar that eventually extends to more specific sectors such as financial institutions. During these five days, about 15 participants from different regions and sectors and a variety of highly accomplished speakers came together in discussions and “real-life” case studies of supervisory board meetings.
Five key learnings stood out for me:
Corporate governance is developing fast given the recent crises and corporate scandals. Some of the main topics corporate governance in Germany is concerned with are sustainability, strengthening and integrity of financial markets, supply chains, diversity and whistleblowers.
Corporate Germany is still acting myopic, actions are still too much focused on short-term shareholder value. A long-term strategy eludes many firms and also ESG targets do not appear to be anchored in their strategies. Incentives within organizations and long-term value are still insufficiently aligned.
The tasks of supervisory boards have become more complex, and I am somewhat puzzled that a legal limit is to be able to be in 10 (!) supervisory board positions. Given responsibilities as well as accountability, this cannot be sustainable. Eventually, this will lead also to more diversity across German supervisory boards.
Executive and supervisory board need to work together. It appears there is still too much focus on supervision and, and not enough on cooperation, collaboration and advice. Going forward, boards should focus more on diversity and inclusion when thinking about supervisory board structures.
While executive boards are obliged to provide all information necessary for the supervisory board, the latter also has an obligation to request the information needed or missing. That is, its members need to ask questions. But they also have to ask the “right” questions and be able to interpret the responses in context. Given the changing regulatory and business environment, this requires deep (industry and company specific) knowledge and continuous education.
A specific thank you to the organizers, Christian Schätzlein and Ann-Cristina Bölle from Frankfurt School, as well as all to the instructors, including Daniele Weber-Rey, Volker Potthoff, and many others!! If you want to know more, reach out!