Why the raid on the ex-Wirecard supervisory board chairman is a reminder for the federal government & stock exchange

Dear readers of GermanBoardNews,

a house search at a former head of the supervisory board – that doesn’t happen every day. Last week, Wulf Matthias, the long-time chief controller of the scandal company Wirecard, was caught. And what Der Spiegel has to report about it sounds frightening indeed: according to the report, emails suggest that CEO Markus Braun, board member Jan Marsalek and Matthias jointly approved a dubious 100-million loan.

Matthias’ lawyer has denied the accusation of embezzlement, according to Spiegel, and of course the presumption of innocence applies here as well. However, the case shows that the role of supervisory board members in the Wirecard scandal is far from illuminated. The Bundestag investigative committee, which went to enormous expense, has brought little to light here and primarily delivered headlines for the media.

But I am confident that the public prosecutor’s office will produce further interesting facts that can be used in court. And then the claimants, first and foremost the insolvency administrator, will take action. Then, at the latest, we will learn a few things – for example, how the “reversal of the burden of proof” works in practice in the case of collectively liable management and supervisory boards.

Manager liability: A deal like Winterkorn & Co?

It will also be exciting to see whether and how insolvency administrators and D&O insurers come to an agreement. There is unlikely to be a dubious deal like the recent one with ex-VW boss Martin Winterkorn & Co – at least if the insolvency administrator takes his job seriously.

However, it would be too short-sighted to leave it to the lawyers alone to work things out. Politicians and Deutsche Börse are also called upon to learn corporate governance lessons from the scandal: How was Wirecard able to get away with an unprofessional supervisory board for so long? And how can such things be prevented in the future?

(Self-critical remark on the side: We called for a professionalization of the Wirecard Supervisory Board early on, but then praised Wulf Matthias for new appointments in 2018 and declared the board to be “ready for the DAX”. In retrospect, that was of course a mistake: we should have kept at it and demanded a new supervisory board leadership)

From our point of view, one thing is clear: investors and other stakeholders must be sure that a supervisory board meets minimum standards. Deutsche Börse must therefore not leave it at half-hearted reforms, but must finally make independent and professional supervisory boards a mandatory condition for a listing.

In addition, we need a section 100a in the German Stock Corporation Act that defines further requirements for accepting a supervisory board mandate – first and foremost a commitment to central personnel governance principles (i.e. a kind of Hippocratic oath). We have been demanding both for more than a year, so far without success. But I promise you: We’ll keep at it.


Your Peter H. Dehnen