What Christian Sewing and Kasper Rorsted must ask themselves – and how companies lure loyal small shareholders.

Dear readers of GermanBoardNews,

the AGM season has not yet really taken off – and yet we are already seeing some headlines that invite us to reflect. Deutsche Bank and Daimler – despite Corona – are reporting surprisingly high profits for 2020. And Deutsche Bank has another headline to its credit: The ECB is putting a damper on the bank’s bonus plans, the FAZ reported a few days ago.

Other companies such as Adidas are once again paying out high dividends, and Dieter Fockenbrock of the Handelsblatt has just rightly reminded us that it was “the massive backing of the state” and thus of the taxpayer that made success possible.

Indeed, could it be that excellent financial results are mainly due to having made the best possible use of opportunities such as the short-time allowance? And less to the “courage” of management? The undertone is intentional, but I don’t want to have that discussion here.

How much time does Kasper Rorsted have?

And there are in the early stages of the AGM season (unfortunately) still or already again the perennial topics ‘independence’ and ‘overboarding’. In this context: I don’t begrudge Kasper Rorsted his great supervisory board mandates at Siemens and Nestlé and the associated side income. But both he personally and his supervisory board have to ask themselves whether he doesn’t have enough to do as CEO of Adidas? Or does he only have a – correspondingly remunerated – part-time contract there? Why is he doing this?

If we look at the above issues through the lens of corporate governance, we have to conclude: We are, unfortunately, not moving from the spot. Stakeholder responsibility, fairness and sustainability often remain empty words.

When will we finally put an end to measuring a company’s governance by whether it meets the formalistic requirements of the German Corporate Governance Code (GCGC)? We have outlined how we could ensure real progress in the VARD #FutureGoodGovernance Agenda.

Who defines good corporate governance?

For now, let’s wait and see what issues Hans-Christoph Hirt & Co. put on the agenda as the AGM season progresses and whether they can get their way. Perhaps the new Deutsche Börse subsidiary Institutional Shareholder Services (ISS) will also intervene audibly and cut a swath for a more modern understanding of corporate governance.

However, it would not be a good idea to leave the sovereignty of interpretation and the future of German corporate governance to institutional investors and their service providers. After all, this is about nothing more and nothing less than a pillar of our economic system and the social market economy.

We therefore need – more than ever – equally competent and courageous supervisory boards that formulate clear standards for corporate management and supervision for their companies and carry them with pride and conviction both internally and externally (!). Supervisory boards and their management boards – like their companies – must be measured again and again by the achievement of clearly and unambiguously formulated goals. (Only) this creates trust in the capital market – and brings us many loyal (small) shareholders.

With best regards


Peter H. Dehnen