There are good reasons to criticize Bayer’s strategy. But the fact that the sovereign wealth fund of an autocratic country is blowing the whistle right now should set alarm bells ringing.
Bayer is facing a turbulent Annual Stockholders’ Meeting on April 29. This year, opposition is coming not only from the usual suspects, but also from major shareholder Temasek. The Singapore sovereign wealth fund, which holds four percent of the shares, is demanding the replacement of CEO Werner Baumann. According to media reports, Temasek is even considering calling for a vote of no confidence.
Now there are good reasons to criticize Werner Baumann. The timing is surprising, however, because Temasek was previously seen as a supporter of Bayer’s strategy. This raises questions: why now? And why so suddenly?
One possible explanation: autocratic Singapore is using its fund as a weapon in its economic war with the West. The resistance would thus be an attempt to destabilize Bayer. “War in Europe, global food crisis, and a sovereign wealth fund attacks a system-relevant company,” criticizes EU parliamentarian Dennis Radtke (CDU). This will meet with “resistance from politicians.”
Sovereign wealth funds out of the supervisory boards
One argument against this interpretation is that Singapore supports the sanctions against Russia (unlike China). But possibly that is precisely the trigger for the sudden activism: Singapore could signal to the governments in Beijing and Moscow that it has not fully sided with the West – and remains a brother in spirit.
Granted: It is not yet possible to judge that conclusively. But the case shows impressively how dangerous the influence of state funds is or can become in times of heightened geopolitical tensions.
It is therefore high time to talk about stricter rules for shareholders from dictatorships. For example, we should ensure as quickly as possible that investors from China, Russia and other countries are no longer allowed to sit on supervisory boards – preferably as part of a comprehensive initiative for higher corporate governance standards on the stock market (see the editorial by Peter H. Dehnen).