Adler Group: How trustworthy is the Board of Directors?

After Wirecard and Grenke, shortseller Fraser Perring is taking aim at the real estate group Adler Group. We have therefore taken a look at the controllers of the S-Dax company.

Let’s start with self-criticism: We addressed the serious weaknesses of the Wirecard Supervisory Board early on, but were too quick to be satisfied after several new appointments. The subsequent scandal therefore made us realise that good Supervisory Board members do not automatically justify trust (especially when they are still in the onboarding phase).

Which brings us to Adler Group: the real estate group is currently facing an attack from Fraser Perring – as Wirecard once did. At its core, the short-seller is accusing the housing company of brazen manipulation of property valuations.

Management has sharply denied the accusations, but of course memories of Wirecard are stirring. We therefore asked ourselves: Is the supervisory board in this case well enough positioned to track down any inconsistencies? What about the independence and expertise of the controllers?

Compliance and governance professionals on the Board of Directors

First of all, the Adler Group does not have a traditional supervisory board, but an eight-member board of directors with six “independent directors”. Among them, there is no other way to put it, are high-calibre professionals. They include Michael Bütter, CEO of Union Investment Real Estate GmbH and former Chief Compliance Officer of Deutsche Annington (now Vonovia). Ex-Gagfah boss Thomas Zinnöcker, long-time Chairman of the Institute for Corporate Governance in the German Real Estate Industry, also brings experience and expertise to the table.

So the all-clear? One of the weaknesses of the board is the manageable diversity; with asset manager Arzu Akkemik only one woman is represented. In addition, Adler is stingy with information on potential conflicts of interest on its website. However, in view of the fact that most of the members of the board of directors have their roots in the real estate or financial sector, these can by no means be ruled out.

In addition, most of the “independent” board members have been on board for less than two years. Thomas Zinnöcker, for example, was appointed just over a year ago. This means that they may not have had enough time to get to grips with the complex structures.

It is therefore too early to sound the all-clear – especially as it is impossible to judge from the outside how seriously controllers take their task (which is why we are once again calling for a personnel governance code and a “Hippocratic oath”!). What is clear, however, is at least that some independent directors have a reputation to lose.