The main mission of supervisory boards is the nomination and dismissal of executive board members and the definition of directors’ compensation. For a truly sustainable appointment policy, a structured succession planning and performance management process needs to be established. The right people need to be put in charge and given incentives for their work in order to increase company value sustainably and for the long term. In this context, multi-year variable compensation systems as well as basic board-level compensation are both gaining in relevance.
A precondition for appropriate and value-oriented compensation and appointment policies is the professional recruitment of the supervisory boards themselves. The efficient handling of their supervisory and advisory duties also requires extensive knowledge of accounting, auditing, risk management, and compliance. It also needs social skills and absolute integrity. More recently, other competences in the field of IT, technology, and digitalization have become necessary for supervisory directors to be able to understand contemporary business models and find the right questions to ask.