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Required job profile for the supervisory board in a corporate crisis
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Contribution by SEViX Senior Executive Partner, Dr. Thomas Forster and SEViX Founder, Rainer E. Ulrich
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A brief case Study!
The current events at DEUTZ AG have shown that a professionalization of the Supervisory Board is urgently required for the benefit of its shareholders and stakeholders.
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For some inexplicable reason - after the highest DEUTZ balance sheet loss in 2020 of the last 20 years - the head of development of DEUTZ AG, Dr. Müller, was appointed to the Management Board in the first half of 2021 and the CEO, Dr. Hiller received a new five-year contract as CEO. Since that date, there have been four men on the DEUTZ AG Management Board. A very serious mistake, as a commitment from 2017 was ignored.
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In 2021, the Supervisory Board of DEUTZ AG did not comply with its own, made determination according to § 111 (5) AktG from its meeting on September 21, 2017: "The members of the Board of Management of DEUTZ AG should include at least one woman in June 2022." See DEUTZ Annual Report 2017, page 153.
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Required job profile for the supervisory board in a corporate crisis
We are an enthusiastic advocate of openness, performance, and merit. Our firm conviction is that the Chairman of the Supervisory Board, who is also the head of the Personnel Committee, must give every CEO in a corporate crisis who has the potential of a crisis manager a chance. This also allows the reverse conclusion (argumentum e contrario) that "empty suits" must be kicked out in a corporate crisis and immediately replaced by a "CEO ad interim" with crisis experience.
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By the way, Steve Jobs led Apple out of the crisis as CEO ad interim in the 90s.
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Because nothing less than the future of people and business enterprises is at stake. We must not oversleep and squander this future, because we will not have a second chance.
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In our view, today's supervisory board - as a strong, anticipatory, entrepreneurial personality - must, in addition to its original tasks, be able to assess whether the corporate strategy and the business model developed by the board and management are resilient and competitive. If the business model is resilient, this company will emerge stronger from the corporate crisis, as you can see from the attached figure.
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Figure: Resilient Business Models – Assessment of companies
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To this end, the chairman of the supervisory board must have excellent strategic competence of his own, enabling him to ask questions
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- about the type of strategy adopted,
- competitive position,
- competitive advantages,
- market shares,
- market analyses, or
- are the company's key performance indicators (KPIs) and order intake worse than, equal to, or better than the industry average?
This might be of interest to you: The Gabler Business Dictionary has included our keyword "Strategic Business Transformation" from our book "Unternehmenskrisen erfolgswirksam managen - Strategische Business Transformation als Königsdisziplin".
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Strategic business transformation takes a holistic systems approach by involving and integrating stakeholders. It follows the motto of turning those affected into participants. Strategic business transformation, with its strong focus on strategy development, relies primarily on methods of market, industry, and competition analysis. In addition, SWOT analysis - analysis of strengths and weaknesses - and professional project management are crucial elements of implementation. Multiplier and promoter concepts, which turn those affected into participants, have also proven effective in practice.
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SEViX can effectively help companies in crisis through:
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- a crisis-experienced "CEO ad Interim" or "CFO ad Interim" together with a precisely fitting team. This increases the speed and generates sustainable success.
- Professionalization of the supervisory board and advisory board
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Please do not hesitate to contact SEViX!
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Please contact us directly if you need concrete help in change management projects or a managing director/CEO ad interim or a business transformation manager and a well-practiced team with implementation competence.
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