Greensill scandal: where is the debate on the independence and attitude of supervisory boards?

Elmar Degenhart

Dear readers of GermanBoardNews,

“Greensill” – greed meets stupidity? Yet the city treasurers wanted to be so clever. It takes an effort not to be outraged again. Because the pattern is always the same. First everyone is naïve, then everyone knows better and has quickly identified the culprits. Of course, the state financial supervisory authority must not be left out, and the denunciation of its failures is often supplemented by the demand for a committee of inquiry. Then this story will also be over. And we await the sequel – which is sure to come!

Conclusion: We simply do not learn. Either there is a blockade of thinking or a concerted looking or ducking away – not only among politicians, but also among decision makers from the economy. No one wants to swim against the tide, stand out or even become the focus of a social debate – after all, all the important people have more important things to do. Unfortunately, there are far too few voices in business who selflessly and relentlessly put their finger on the problem.

When, dear supervisory board members and board members, can we expect your “basta”?

First Wirecard, then Greensill: Where was the supervisory board?

The Greensill scandal would be another good example of this. Let’s look at it from a corporate governance perspective. This is not about guilt in the criminal or liability sense, but about responsibility in the objective sense. What consequences follow from this is then another matter.

In the Wirecard case, the Supervisory Board largely managed to keep itself out of the line of fire. The fact that the members themselves do not talk about their responsibility is probably due to the ban on talking that D&O insurance immediately imposes in cases of liability and damages. A system error? At least when other decision-makers are also silent.

In the Greensill case, things may now be different: Here, according to media reports, one of the supervisory board members was a partner in a law firm that provided intensive advice to the financial institution. Of course, this raises the question of independence, and I very much hope that a discussion will finally get underway.

Independence is first and foremost an attitude

After all, one thing should be clear: the supervisory board’s responsibility is to lead the company safely and successfully into the future. It is up to the supervisory board to decide how to do this. But if – for whatever reason – it does not succeed, then it bears responsibility for that.

But where is the yardstick against which supervisory boards must be measured? Certainly not the German Corporate Governance Code (DCGK) issued by the so-called Government Commission. Because responsibility is not something abstract, but something concrete and personal. Here I refer – again and again and with pleasure – to the VARD professional principles, a kind of Hippocratic oath for supervisory boards.

And let’s not fool ourselves: Independence, in particular, can only be determined to a limited extent by formal criteria. Independence is first and foremost an attitude. And it is this attitude or professional ethic that needs to be promoted. An obligatory Hippocratic oath, as I have proposed, would be a big step in the right direction.

 

With pre-Easter greetingsYour
Peter H. Dehnen