With regard to the work of supervisory boards, it is becoming increasingly important to establish a design function in addition to the control function.

Verena Pausder
Young Global Leader of the World Economic Forum and Deputy Chairman of the Supervisory Board of comdirect Bank AG

We talked to Mrs. Verena Pausder about #FutureGoodGovernance.
The interview was conducted before the outbreak of the Corona Pandemic.


 

A ship needs a captain. There is much talk about new leadership concepts, about participation and freedom. How much leadership will a company still need in the future and how much agility can it tolerate? How do you envisage corporate management in the future?

Classical leadership and top-down thinking have had their day. Nevertheless, today and in the future, more leadership is needed than ever before – only distributed over many shoulders. It must be more about turning more people into managers than about abolishing managers. That’s where agility comes in: flexible structures that change and shift depending on the situation and the challenge are a constant switch between leading and being led.

For the work of the board members, this means in the first step making decision-making processes more transparent, both internally and externally, whenever possible in terms of compliance. Furthermore, access to the board of directors must be facilitated. This can be achieved above all by means of measures that contribute to the compatibility of work and family. In concrete terms, this means, for example, emergency care for mothers and fathers, work rooms with childcare facilities, flexible working hours models or the possibility of working from home. The legislator should also make it possible for board members to take a break from their mandates; the #stayonboard initiative, for example, which is supported by Dieter Zetsche and Ann-Kristin Achleitner and of which I am a part, is working towards this goal.

With regard to the work of supervisory boards, it is becoming increasingly important to establish a shaping function in addition to a controlling function. As a member of the Supervisory Board, I don’t just want to sit at a round table four times a year, but – without taking the helm from the Executive Board to stay with the captain’s picture – I want to actively shape the course of the company.


 

Companies are subject to a constant process of change. What challenges do you expect for your company in the next 10 years? How will they change your company? What will change in terms of employment and qualification of employees?

If we maintain this pace, we will still be talking about digitalization as the greatest challenge ten years from now. That becomes clear when you divide digitization into phases. In phase 1, the mantra “We can do it like this!” echoed through the boardrooms. Digital projects, tools or even business models were dismissed as gimmicks with a short half-life. Sometimes more, sometimes less quickly, the insight came that something must be done. In phase 2, Chief Digital Officers were reflexively appointed or “digital” was assigned as a new area of responsibility to a board department. However, because digitization has an impact in all areas, the bundling of responsibilities does not go far enough. Some companies have recognized this and are now in Phase 3: Digitization is now seen as a cross-sectional discipline, which is approached in a correspondingly broad way and – if at all – is accompanied by one person with primary responsibility. It is still uncertain when we will reach phase 4 or 5 and what characterizes them. But I am certain that sooner rather than later digital competence will become a hygiene factor.

This will then also have an impact on the qualifications and tasks of employees. Here, we need to be introduced to new possibilities offered by digital tools; but we also need to be careful in dealing with those colleagues whose jobs will change dramatically as a result of the increasing degree of process automation, or who will even disappear. For them, further training and retraining programmes are needed – and not just when it is too late. Companies are well advised to take action NOW.


 

There is much debate about centrality vs. decentralisation, agility and core competence in organisations. Will there still be companies in today’s sense of the term in 20 years’ time? What changes in terms of corporate organization and financing do you expect or would you like to see?

With every generation change, a new management style is introduced into a company. The generation now taking on responsibility has a completely different understanding of the work-life balance than its predecessors. Due to the Corona pandemic, we are also experiencing a comprehensive flexibilisation of work: all of a sudden, home office is no longer an issue for pioneers, but can be thought of and implemented on a broad scale.

Even if not every job is compatible for the home office, this development will have an enormous impact on the design of office space, even entire works. After all, some space is now only needed on a part-time basis, and especially in conurbations with high rents, this can certainly have an impact on a company’s balance sheet. Increased digital communication is also helping to break up corporate structures and bring about lasting changes in organisations. My wish is that with all these changes, it is not so much a practical constraint as the mere will that provides the necessary motivation.


 

Car manufacturers are becoming mobility service providers, food producers are becoming lifestyle providers, media houses are becoming data science companies. Where will your industry develop to? Will industries – as we know them today – still exist in ten years’ time? What will happen then?

The smartphone has become the central hub where all our information comes together. Almost every service can be offered online or mobile today. One of the reasons why it has been apparent for years that branches are no longer needed in the banking business. The industry must find suitable answers to these developments – always with an eye to the needs of customers, who are increasingly turning to digital touchpoints. In addition, new providers are constantly entering the market, which banks have traditionally occupied. This new competitive situation must also be dealt with, but I also see an opportunity for established players to feel even greater pressure to innovate and thus to offer better products.


 

#FutureGoodGovernance is currently still comparable to a crystal ball in many areas. Which future aspects of good governance are particularly important to you? What would you wish for if you had three wishes? Where do you see the politicians’ demands? And what responsibilities will companies and their managers have in the future?

I am committed to ensuring that governing bodies become more diverse. “Divers” does not only mean that more and more women should fill positions alongside men. It must also be about digital savvy and traditional types, young and old managers* and people with very different CVs working together. It is also important that those who have families move up into the committees. For the sole reason that parents have a different view of and access to products and can therefore think or act in completely different user journeys.

I hope that politicians will implement our proposal to amend the German Stock Corporation Act. With #stayonboard, we want to achieve that members of the Board of Management are allowed to take a break from their mandate in order to take maternity leave, take parental leave or care for relatives, for example. So far, there is no uniform regulation in this regard, but only individual solutions based on good will and legally questionable. This is out of date and must be changed. The Grand Coalition and the FDP are already supporting the initiative – now all that remains is to get down to business.

I would also like to see the Government Commission on the German Corporate Governance Code pay even greater tribute to digitization and increasingly demand digital expertise when examining and training supervisory board members. And speaking of “digital education” in the broadest sense, my third wish is obvious: to prioritize this topic in the school education of our children. After all, they are the next generation of corporate leaders or founders and are currently still learning as they did twenty or thirty years ago.

As already mentioned, I am convinced that more people will become managers in the future, i.e. that competencies will be redistributed and constantly questioned. Accordingly, it is up to the current decision-makers* to pave the way towards a modern organisation and break down barriers.

 

Thank you very much for the interview!