Buhlmann's Corner

Upside down?

The world has lost its head – so where did its brain get to?

We’re going so fast that even our way of speaking has got to be turbo-charged, so we think up slick neologisms like “grexit” or “C2C”. We’re so cool that we’re good with “a quick dusting-over with no loose ends” instead of a “well-thought-out way forward”. Something tells me this is where bubbles dot com flourish and I don’t mean just the Shanghai variety.

Microsoft invests billions so as to deduct double the amount against taxes 12 months later. Telefonica got round the conflict of interest issue by writing the by-laws (AGM June 12, 2015): “ ... the directors SHALL notify …any situation of … conflict with the interest of the company” and then, just to be doubly sure: “conflict of interest situations SHALL be included in the annual report“. But then what are you supposed to do if people don’t abide by the law?

They’ve invented a new breed of shareholder in Japan. Toyota spelled it out in its articles of association. Shareholders who ‘s ambition it is to obtain voting rights must purchase the shares at least 60 months prior to the record date and guard them jealously. In actual fact, though, that kind of shareholder already exists. In France, they didn’t feel like tackling the issue the complicated way by manoeuvring through amendments to articles of association, they just passed a national law, but here, the waiting time is only 36 months. Phitrust in Paris is fighting a lonely battle but it is gaining the upper hand helped out by the Ethos-Proxinvest group. These are in any case always isolated exceptions, just like the ISS public manifestation staged during the Toyota AGM. By and large, policy users are less creative. The national icon of the patriotic proxy advisor has been lost with IVOX swooning in the arms of fellow family-member Glass Lewis, a Californian competitor of Canadian ownership.

The trail blazed by German corporate governance has virtues in its own right. The retired leader of (or one of) the country’s most influential trade unions was elected to chairmanship of (or one of) the world’s biggest car manufacturers, Volkswagen and the story of how this man, one of the greatest living leaders of a German trade union came to be the highest paid Supervisory Board chairman in the country is in itself a lesson in dissembling commonplace preconceptions. It is he who decides on the composition of the executive board, and the strategic orientation they follow, under the vigilant eye of the two branches of the founding family, not to mention the state representative endowed with special powers. Macchiavelli is indeed the teacher of exemplary pupils in Wolfsburg.

But then again, what can you say when pharmaceutical distributer Stada distinguishes itself by shelling out 10 percent of its quarterly generic drug turnover for the retirement pension of one individual member of its executive board. Only one dissenting voice was heard, Christian Strenger came to within a hairsbreadth of carrying half of the AGM with her. Her motion calling for a special audit obtained 42% of the vote, short by a handful of the 40,000 shares the court needed to order the audit. Stada’s management did not consider it worthwhile to publish the result.

If you’re interested in the Stada speech or other video recordings, send me an email.

This could be called voting feet upwards... and it highlights just how important it is that we get our collective brain back on the job so we can start thinking about our sense of responsibility again.