Corporate Governance: How Theodor Weimer can make the stock exchange a better place

Deutsche Börse

Dear reader of GermanBoardNews,

theodor Weimer is currently one of the most sought-after decision-makers. His appointment to the Supervisory Board of Deutsche Bank has met with a positive response far beyond the financial sector. Dissenting voices were raised only because there were fears in Deutsche Börse’s environment that he could replace Paul Achleitner as Chairman of the Supervisory Board as early as 2022 – and therefore leave as CEO.

That shows: Many people have high hopes for Theodor Weimer. I am also one of them. Because the head of Deutsche Börse is not only a top-class manager, but also someone who thinks outside the box and observes social developments closely (as our current interview with him impressively shows).

I am therefore pleased that he has an open ear for one of our central concerns within the framework of the #FutureGoodGovernance (#FGG) initiative: making the stock exchange a better place – in other words, a place where entrepreneurs can obtain fresh capital without having to expose themselves to aggressive shareholders. A place that rewards long-term entrepreneurial thinking and does not punish it in the form of price markdowns.

Supervisory boards as guarantors of stakeholder value

We here at the Association for Supervisory Boards in Germany (VARD) are convinced that there is a way to curb aggressive investors without undermining ownership rights. To do this, Deutsche Börse would have to make tailored corporate governance standards a prerequisite for a listing – first and foremost an independent supervisory board that could then act as a bulwark against activists.

The time is right for such a paradigm shift. For the Corona crisis reveals the extent to which the stock markets have decoupled themselves from the real economy. This is not least due to the shareholder value doctrine, the disadvantages of which are currently becoming clearly apparent: Numerous companies have paid out a lot but not much. They have built up cost-optimised but unstable supply chains. And they have gambled away trust through hasty austerity programs.

Commitment to sustainable corporate management

After the crisis, the focus will now be more on stability and trust – and less on optimizing costs and returns. The shift from shareholder value to stakeholder value concepts is likely to accelerate. As a result, decision-makers will find short-term investors less useful than ever – and in some cases will be tempted to escape them by delisting.

I am therefore convinced that Deutsche Börse would be well advised to take the stakeholder value trend into account. Cleverly designed corporate governance standards would be an important commitment to sustainable corporate management, a clear signal to speculators – and at the same time a powerful tool to limit their influence.

 

Cordially

Yours Peter H. Dehnen (Editor)

 

Additions, comments, contradictions? I look forward to your feedback herausgeber@germanboardnews.com