Buhlmann's Corner
Dawn of committed corporate governance in Germany
Seen in retrospect, it's the small events that set turning points, such as the Annual General Meeting of GSW Immobilien on 18 June 2013 in Berlin. In the basement of the Chamber of Commerce and Industry of the Federal Capital, a few dozen stockholders of the real-estate company, founded in 1924, met – arriving not only from Holland but even from São Paulo. By then it was clear that, on the one hand, the commitment in the sense of “we take care of” the shareholders was rarely large, and that on the other, both opponents have made incomprehensibly many mistakes.
What had happened? The longstanding, solid real-estate company had lost its CEO to the competition. For that there were and are official and unofficial reasons. Whether the problems of the new employer provoked the departure or whether the discord between Chairman and CEO seemed solvable only this way – he was gone. The desk was still dust free, the chair still warm, and the Supervisory Board had already appointed a new CEO – an old friend of the Chairman. The process led to discussions, or rather to a need for discussion. But the administration felt on its high horse and as inviolable as the Vatican.
GSW had just arranged its second meeting after the IPO when two unusual but valid motions came in. Proposer PGGM had just a “ridiculous” 2.6% of the shares – a market capital of € # #.
On the one hand, the General Meeting should vote no confidence in the Chairman/CEO – even though discharge to him was not even on the agenda, because he was only a few weeks in office.
On the other, the general meeting should vote the Supervisory Board Chairman out – though the proposer had named no replacement explicitly. Revolution without a king – a creative variant.
So the management sat before the shareholders and behaved like the Americans justifying their data-collecting mania as protecting the nation from terrorism and paedophilia (?) and, chest puffed with pride, asked whether IT outsourcing actually had been the right and safe way .....
until information surfaced that even friendly heads of state and supra-nations who had (partially?) paid the Americans to fight terrorism and by definition cannot be connected with immoral sexual practices were being spied on in the same way ....
Supervisory Board chairman Eckart John von Freyend stood up and justified his independence and the integrity of the goings-on in detailed questions with the observation “we are by definition independent – ex cathedra, Amen.”
Executive Bernd Kottmann described the continuing corporate strategy, of which one got the impression he didn't know it, and elsewhere boasted his historical achievements with “I acquired the caverns that saved the company” – whereas in the year prior to his appointment there (IVG Immobilien in Bonn, today floundering) you could read in the Annual Report that the “caverns” had been part of the group's activities for 25 years.
It came as it had to, and as was ultimately proper: after the count, distrust of the Board was pronounced by majority vote, and at 69.6% the high hurdle for dismissal of the Supervisory Board, 72% of the capital present, was just missed. It took more days (and nights), as well as the vote of the Works Council, and only then did those concerned resign. If every necessary decision by Supervisory Board chairman and CEO takes that long – then it's goodbye and good night.