"Conductors" up against challenging tasks - the complex issues of 
chairpersons of supervisory boards

HEADSAHEAD sent out invitations to a practical forum in July under the title "Professionalising Supervisory Board Work." It became clear: issues that concern chairpersons of supervisory boards are as urgent as they are multifaceted. The exchange is worthwhile - and everyone agreed it should be continued.

Düsseldorf, 16th July 2018 

Up to now, it was a one-of-a-kind - and as it turned out, important round that HEADSAHEAD made possible in collaboration with the renowned corporate law firm, Linklaters LLP, on 5th July in Düsseldorf. 18 heads of supervisory and advisory boards from companies throughout Germany got together following the invitation by the executive search consultancy and talked about the issue of "Professionalising Supervisory Board Work."

"Based on our own supervisory board activities, we know there is not a lot of competent and practice-related exchange regarding this", explained Stefan Eltgen, Partner at HEADSAHEAD and Supervisory Board Chairman of J. Bünting Beteiligungs AG. "We aimed to close this gap with our interactive practical forum. The exchange should be able to take place in an open and trusting way, which is why we deliberately chose a small-scale, personal setting."

Supervisory boards: the character must fit

Right at the start of the event in the Industry Club, it became clear that the issue of pro-fessionalising supervisory board work is more than just a buzzword. "Rather, it is legislators’ clear demand as a response to the mistrust that has arisen in the self-regulating forces of supervisory boards", clarified Prof. Dr. Hans-Ulrich Wilsing, Lawyer and Partner at Linklaters LLP as well as an experienced advisor to executive and supervisory boards in a keynote speech. 

Openly and ready to engage in discussions, the invited participants brought up their pressing issues. One of them: the necessary optimal staffing of mandates. "At least just as important as professional competencies are the soft factors such as personal character traits of supervisory board members", concluded Prof. Dr. Wilsing. 

Astrid Hamker, entrepreneur and member in supervisory and advisory boards of family-run companies as well as the Chairwoman of Seier GmbH’s Advisory Board, also considers the right composition of supervisory and advisory boards to be a success factor of pro-fessionalisation: "The challenge is to win over personalities who represent ‘diversity’ in terms of their experience and expertise as well as their character. Thanks to many different perspectives, a comprehensive reflection is possible. This provides the board of directors and top management with a wide array of impulses and it certainly calls into question the ‘customary’ and ‘proven’ in a dynamic environment", she explained.

Numerous tasks, high pressure – low compensation

Ursula Opper, who specialises in staffing supervisory and advisory board mandates as a Partner at HEADSAHEAD and who is the initiator of the practical forum, saw her observations confirmed by the discussion: "The role of heads of supervisory boards and their relationship to the company’s management have changed. Through their entrepreneurial advisory role on the one hand, and their monitoring function on the other hand, the diversity of their tasks was underscored by the discussion partners," she explained. "The chairperson of a supervisory board must be an all-rounder who understands the company from top to bottom and is aware of his or her role, also in a changing corporate reality, and who rises to this challenge with strong commitment. And trust must always be the basis of the cooperation between him/her and management."

Hamker highlighted the head of the supervisory board’s special task of "orchestrating" the board and then "like a conductor, ensuring that at the end of the day, decisions are taken in favour of the company."

The discussion partners all agreed that the complexity of the continually growing tasks and increased liability risk are not, however, reflected in the compensation. "Professionalisation of supervisory board work that has been increasingly demanded over the last few years by legis-lators and also the Government Commission German Corporate Governance Code is in stark contrast to developments at the compensation level, where the office in a supervisory board – especially in smaller companies – is often still treated like an honorary office", criticized Wilsing.

Practical forum will be continued

The participants’ unanimous request for a continuation shows how helpful the exchange at eye level was: "We’ll maintain the format of this interactive event and get together again in the same session", announced Ralf Kreutzberg, Managing Partner at HEADSAHEAD. "There is a strong interest in and demand for exchanging experiences about specific issues in a competent round."

 

Praxis-Forum im Industrieclub Düsseldorf.

The initiators and organisers: Ralf Kreutzberg, Stefan Eltgen & Ursula Opper from HEADSAHEAD and Klaus Möllerfriedrich, Chariman of the Board of Gesco AG (from left to right).

Also read our interview: "Companies need professional competencies in supervisory board work"

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