Buhlmann's Corner
Politics set such a fine example it’s hard not to follow. Should I be beholden to what I said yesterday to make people vote for me? Short answer: no.
The latest illustrious example comes from the chairman of the Supervisory Board of Siemens 2012-3. He ran for re-election promising that his top priority would be to prepare (at last) a road map for his succession and that of other members of the board. So there he sits, waiting for things to happen on their own, and we likewise, hoping that the world changes as little as possible. Them up there and us down here. Let’s hope in the weightiness of the family, now beginning to echo with youthful vigour.
I see the dawn of a new culture in which investors are viewed with respect and attention, a culture that Deutsche Bank has espoused judging by the changes already introduced; bonuses fall not as the gentle rain from heaven but are decided on by the shareholders’ representatives. Positions on the management board are no longer co-opted but decided on by discussion, both internal and external. Only the Supervisory Board is the same - more time and effort will be needed for it to undergo complete change and meet the challenge of the times.
The Karstadt / Arcando dispute has ended in a ruling as infantile as it is tinged with envy (former CEO Middelhoff was sentenced to three years imprisonment for embezzling half a million Euros). If these same standards were applied to tax felony, quite a number of German football club chairmen would be serving life sentences. I can’t help but wonder who was performing the tasks that were supposed to be the Supervisory Boards’, making decisions on credit and a whole series of other issues. Appraisals are back in fashion, so (presumably) Siemens is paying for one on how well its Supervisory Board performs, and how diligent its members are. A word of caution, though. In the eyes of the Essen magistrate, this hoary old tactic of Thyssen’s raises more intriguing questions: does a company have the right to pay an adjustor for these surveys ? even when the shareholders never get to see a copy of what they’ve paid for? To what extent can the adjustor be pardoned for not knowing enough about what he’s supposed to be examining and writing about.
The same applies to IPO interpreted as Interesting Personal Outlook, and I’m thinking above all about the vaudeville act staged recently by Rocket Internet. Someone turns up and I sell hope by the hundredweight – even after listing on the Stock Exchange, the quarterly reports were awash with glamour. You get to page 10 and read that the EBIT margins are exclusively positive (up to 129 %) but then you’ve got to wait till the end to read that there is not one (not even one?) holding with something resembling an EBITDA or even something more. Of course, the technical picture can always be touched up, like the vote in Infineon in 2010 when the majority of the meeting was turned around, or the appraisal of the Siemens Supervisory Board, etcetera.
Times will get better when youth takes the stage and puts its own ideas into practice as we hoped for in the “Corner” of November 2013: “all we can do is hope that, as happened in 2013, the family frees access to younger blood and also more ladies for the Supervisory Board”. In short better late than making like Gorbachov and being beaten by the stick of history wielded by your successor.