The danger of blockades in the controlling bodies is growing. Why we need to rethink co-determination to prevent dangerous hangings.
Good supervisory boards have been pushing vehemently for some time for flatter hierarchies and shorter decision-making paths. Because they have recognized: Only “agile” companies could react fast enough to rapid technological and social changes.
It is therefore all the more annoying when the supervisory boards themselves become the brake on change. Like last week in Wolfsburg: there, the supervisory board was unable to agree on important personal details. A “power struggle that has flared up again” between CEO Herbert Diess and Works Council Chairman Bernd Osterloh keeps the group on tenterhooks, wrote the Handelsblatt.
The works council is particularly powerful at VW, mainly due to the influence of politics: Lower Saxony’s Minister President Stephan Weil is an insecure cantonist (like his predecessors) from the perspective of the capital representatives on the Supervisory Board. Supervisory Board Chairman Hans Dieter Pötsch must always fear that he will side with the employees – a word of caution is therefore not an option.
Co-determination: Are independent supervisory boards preparing the ground for collectivisation?
Just how important this can be from the owners’ point of view was demonstrated at Metro in the spring: Supervisory Board Chairman Jürgen Steinemann used his double voting right to push through the sale of the Real department store chain against the will of the employees. He had to take a lot of criticism for this; for example, the Süddeutsche Zeitung criticized a violation of the “spirit of co-determination”.
In addition, the trade unions have since then been pressing with growing vehemence for the abolition of double voting rights and their replacement by a mediation process. However, the turbulence in Wolfsburg, where de facto mediation is already necessary, shows impressively that such a model entails considerable risks.
And we fear that the danger of hanging parcels is also growing in other companies. Because there shareholders – fortunately! – Since stockholders – fortunately – are increasingly nominating independent experts and stakeholders to the Supervisory Board(as Bayer recently did), the stockholders’ representatives no longer form a closed phalanx. Double voting rights can therefore come to nothing.
Is good governance thus preparing the ground for collectivization and a superiority of the employees? In any case, we are convinced that if the capital side becomes more independent and diverse, the employee side will have to follow suit on the supervisory boards. We need a stakeholder value culture there too – and more entrepreneurial thinking.