Buhlmann's Corner

Questions to shareholders

Shareholders argue for years over governance issues, until for lack of any outcome or appropriate consequence of the votes the legislature gets active and introduces a set of rules no one really wanted. So it was with the cooling-off period or the compliance declaration, and so it threatens to be with the quota for men or the accountants. Repair work will require refinement, and evasions enhance neither transparency nor the value of clear corporate governance.

At Bayer and BASF, yesterday’s CEOs, motivated by their environment, press on to head the Supervisory Board.  As their cooling-off period began, no thoughts yet went to the 2012 AGM date. The month-long suspension between the legally defined period and the final decision by the shareholders could have been avoided had the shareholders exercised their responsibilities in time and not left the power to the legislature.  Gentlemen’s (and ladies’) agreements between departing and cooling-off Supervisory Board chairmen have always existed. What is new is that candidates for the chairmanship are now exposed to an involuntary election campaign among Supervisory Board colleagues in the period between the Supervisory Board appointment and the vote for chairman - let’s see what antics that may bring.

At the start of his tenure, many a CEO has longed for a cooling-off period - for his predecessor; by its end he was cursing it. Shareholders should have acted here and helped to eliminate the conflict; instead they let yet another law in.

Sometimes it works even easier, as for instance at EADS, where the government is not a shareholder, but is behaving like one. The whole thing turns bad when there’s a representative holding the shares on behalf of third parties. Daimler is similar. Here are the shares with their opportunities and risks, and each shareholder must decide whether he wants that or prefers a repurchase transaction with the Federal Government. Fortunately, the personnel change just made it, after, as at IKB and ThyssenKrupp, individual Supervisory Board members seemingly “didn’t know” and asked for further clarification.