This year, a number of companies are rushing to go public. Shareholders would be well advised to take a close look at the controlling bodies. Because there is a lot wrong with them.
The Manager Magazin stated a “brilliant stock market debut”, the FAZ rejoiced over a “price rocket”. And yes: the Auto1 IPO makes you want more and should encourage other companies. The pipeline of IPO candidates is well filled anyway, from Daimler Trucks to Friedrich Vorwerk, a number of companies are pushing towards the stock exchange.
What always surprises us in the run-up to IPOs is that while analysts dissect the financial reports with almost surgical precision, they pay little attention to the controlling bodies. Yet the Wirecard scandal has impressively shown how important professional supervisory boards are.
We notice two weak points in stock market newcomers time and again: a pronounced dominance of venture capital investors and a high degree of dependence on (former) parent companies.
Siemens Healthineers: The leash is getting longer
Auto1 is a classic example of the first weakness: With Andrin Bachmann and Sylvie Mutschler von Specht, two of the five supervisory board members come from the venture capital scene and have a strong focus on rapid growth and scaling. This is undoubtedly important for young companies, but on the way to becoming an established group, other competencies are increasingly in demand, for example in the area of compliance. And in our view, supervisory board chairman Gerhard Cromme (77) and former Landesbanker Gerd Häusler (69) cannot fill this gap alone.
In the case of Daimler Trucks, it will be interesting to see how big the second typical problem becomes: the dominance of the (ex-)mother on the supervisory board. Group CEO Ola Källenius has announced an “independent management” and an “independent governance structure” at the truck subsidiary, which would only be logical: the motive for the spin-off is, after all, the chance to become more “agile” and to make independent decisions without lengthy group coordination processes.
But that’s exactly how it sounded at Healthineers – and yet Siemens continues to keep the former division on a short leash: Five of the nine members of the Supervisory Board still come from Siemens. Not until after the annual shareholders’ meeting on Friday will the independents around Marion Helmes and Philipp Rösler receive reinforcement (through our “Supervisory Board of the Week”).
We’re curious to see whether Källenius will allow for more independence in the planned Daimler Trucks IPO.