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VIPsight

Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

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Buhlmann's Corner


Cultural crisis and financial change – in 2013 will that become "crisis change"?

Since 9 October 2009 we have been living with the financial crisis and Angela Merkel's savings guarantee. It is not just since then that the German Chancellor, now nearly eight years in office, has been working on her personal European career – these days vigorously supported by the Bavarian CSU with its European cost-cutting programme. Her personal legacy from the German savings guarantee was eliminated on 13 December 2012 – not, say through Basel III equity requirements, but through the Nirvana of an EU deposit security. The blemish on this "only" supplementary regulatory world at EU level is the crisis change.

After all, German industry with any pride in itself spent the whole of 2012 in cultural transformation – confidence and trust was yesterday, today it is enough to showcase the culture shift. But did anyone really want to deal with the cultural crisis? After all, it was much more pleasant to promote open-ended change!

After a decade of 25% yield (the basis of calculation was a rather less relevant discussion item) Deutsche Bank shareholders had for the first time manfully denied discharge to the Supervisory Board, by 24.8%. Just imagine if that had been implemented on gender diversity – the Supervisory Board would have been denied discharge with the second half of female stockholders too, essentially because of a long-term lack of culture in the work of the Deutsche Bank Supervisory Board. Instead, Supervisory Board chair Clemens Börsig will now preside over the Bank’s Cultural Foundation – in every culture there are plenty of ancient proverbs questioning this innate contradiction.

The Deutsche Bank is in the midst of cultural change, you just have to give it time. Culture cannot be judged on a quarterly basis. However, the people in the bank need to be brought in too – culture is not anaemic.

MunichRe – another group under the supervisory control of the Achleitner family – is also living through cultural change. If it was still only natural in 2002 for the Executive Chairman to confirm his formal legal qualification within the meaning of § 100 AktG to the Commercial Register on the letterhead of the Board; now it is Bernd Peter Pitschetsrieder, steeped in all the cunning of the Board, that is to lead this Supervisory Board – he knows his stuff. Sometimes he led listed family companies like BMW; once he went through Ferdinand Piëch’s university of poor corporate governance at Volkswagen. Now he is to be vested with looking after ERGO Insurance Group as well as the post-crisis financial world of zero interest rates on the one hand, and supervision of the guaranteed-interest-rate commitment on the other. An exciting group: after all, it has a clear view into the world of insurers worldwide – not just under the red lights of Düsseldorf.

It's apparently no cultural crisis when Bilfinger (which suspended the Berger of the firm Bilfinger Berger in 2012) offers evidence that old politician Roland Koch, with his heterogeneous past, is now designing the service company’s new culture. Do we in this country perceive just how country-specific construction cultures are? Wasn’t Hochtief in its confrontation with ACS so self-obsessed that no one there grasped the field of conflict there was in Australia? In the bigger-earning half of the German Hochtief Group, Leighton in Australia, a man from far-off Essen had so dominated the group and also shaped its decline that ultimately in Sydney the Hochtief takeover was decided from ACS in Madrid. The poor transitional figures in Essen were still drawing the consequences (and their pensions) in 2012.

It is just so with Olaf Koch and the cultural rupture at Metro in the vacuum of the self-discovery process by Haniel, a centuries-old family company; it is so with Franz Koch, the youngster at Puma, who sank in his predecessor’s interregnum – the predecessor who also led the Supervisory Board for a time without a cooling-off period. And so it is now also in the particular case at ThyssenKrupp, in sight at last. Here the Supervisory Board chairman personally influenced German Corporate Governance very actively, which did not prevent him letting corporate governance at ThyssenKrupp become a blatant case (two former board members tolerated on the Supervisory Board, invented right of secondment etc.). In office, finally, he appointed executives and fired them too, yet on personnel decisions as well as (strategic) decisions on issues he never had any complaints. Neither on resolutions passed, nor on leadership nor even on compliance culture – each and everything was judged exactly the same way by at least two reviewers. The reports are in the business and on the table (?) of the Foundation, which is now led by the venerable Berthold Beitz (99 years old) and tomorrow by nominee Gerhard Cromme. With or without a ThyssenKrupp dividend ...

Cultural change in the financial crisis will fail as long as trust as a fundamental basis is not built up again. A trust culture with a compliance crisis would be the better way; the von Pierers and Wiedekings of this world could sing us a happier song about it than Martin Blessing (with his Commerzbank) or NN in the crisis change.