Chaos Days’ at ThyssenKrupp

First CEO Hiesinger leaves, then Supervisory Board Chairman Lehner. What’s going on? One attempt at explanation – and five appeals to those involved.

When I heard about the resignation of the Chairman of the Supervisory Board of ThyssenKrupp AG, I was initially speechless. A man like Ulrich Lehner is certainly good for surprises, but he is certainly not someone who acts spontaneously and irresponsibly. So some things must have come together to tempt a hardened supervisory board professional with a Rhineland spirit to take such a step. My conclusion: Hiesinger has turned on the red lamp, now the sirens are howling with Lehner’s departure.

What does this resignation mean for ThyssenKrupp? Is the company now being torn apart? Are jobs in danger? Is it counterproductive if, with Hiesinger and Lehner, the two people who wanted to keep the company together are now gone and leave the field to Cevian & Co.? And what roles do Mrs. Gather and the Krupp Foundation play? These questions arise in this confusing situation. And what we are experiencing is – by no means a gap filler for the summer slump, but a staged, tangible corporate governance scandal.

I will try to put this into concrete terms. To understand the’chaotic’ situation at ThyssenKrupp, an introduction to the inner workings of stock corporations in Germany:

The system of corporate management and supervision (in short: corporate governance) for public limited companies in Germany is something special. The shareholders do not govern the company, but they generally (only) meet once a year at the so-called Annual General Meeting and elect the members of their Supervisory Board, to whom they delegate responsibility for the company. The Supervisory Board fulfils this responsibility by appointing the Management Board and supervising its work in a supportive manner. The Supervisory Board is a body which can consist of up to 20 equal members who deliberate in closed meetings and, in principle, decide by a majority of their votes.

And now comes the special thing: a supervisory board, no matter how it got on the board, is not a representative of the interests of individual shareholders or interest groups. By accepting his election, he undertakes to act exclusively for the benefit of the company. Period. No exceptions.

You have to know that when you accept a Supervisory Board mandate in Germany – even if you are also a shareholder of the company.

In Anglo-Saxon companies with a so-called Board of Directors, this does not apply, at least not in this clarity. The shareholders run their company there. Many board members are the extended arm of individual shareholders and also represent their interests – and if they do not work, they are quickly dismissed. Of course, board members also have the welfare of the company in mind, but it is not the primary decision criterion.

So it should come as no surprise that sooner or later there will be a bang when Anglo-Saxon-style shareholders buy shares in a German company and – consciously or unconsciously – override German corporate governance rules. It’s like allowing an American who knows only his American football to play football in Germany. In football, there would quickly be the whistle of the referee and first the yellow card, then the red card.

Unfortunately, there is no such arbitrator in stock corporation law and in German corporate governance. This quickly leads to a boistery with injured players when other players get infected and start playing according to their own rules. In the end, you were quickly relegated from the premier league.

What does this mean for the future of ThyssenKrupp? What does this mean for the main players, the so-called stakeholders? Here are my appeals:

  1. Anglo-Saxon activist investors: adhere to the rules of German corporate governance. And if you don’t like the company, you can sell your shares.
  2. To the Board of Trustees of the Krupp Foundation: concentrate on the charitable purpose of the foundation, stay out of company matters and use your strong voting power to ensure strong, competent supervisory boards that understand something about monitoring the management of complex industrial companies.
  3. To the Supervisory Board: Consider whether you have the necessary professional and personal competence of a Supervisory Board and the necessary independence to exercise such a mandate. The Supervisory Board at ThyssenKrupp is not an honorary position, but hard work in a 20-person committee.
  4. To the Minister President of North Rhine-Westphalia: please no TV appearances with comments on corporate policy! The Supervisory Board and the Management Board are the appointed bodies for this purpose.
  5. To all together: stay within the limits of what the office or mandate allows you. Work quietly and together FOR THE WISH OF THE ThyssenKrupp COMPANY.