Supervisory Boards — Challenges Demand New Skills

The role of the supervisory board is changing, with new challenges and regulatory changes demanding that top decision makers across the Austrian economy possess new skill sets. These are the findings of the study entitled “ErfolgReich sein im Dreiklang – Aufsichtsräte, Vorstände, Top-Führungsebene” (The Road to Success in the Triad – Supervisory Boards, Executive Boards, Senior Executives) conducted by Kienbaum Vienna, which surveyed 60 Austrian executive boards and supervisory boards. As in previous years, the topic of digitalization remained important for supervisory boards this time around, while executive boards also signaled a desire to become similarly more focused on this area. A particular focus this year lay in the new skills required by supervisory boards, executive boards, and senior executives to help optimize their interaction. The direction in which the “triad” is likely to develop, however, remained unclear, with opinions concerning the degree of freedom of senior executives heading in different directions. 

Differing Expectations of Supervisory Boards

According to the study, the list of minimum professional requirements on members of supervisory boards was headed up by fundamental economic and legal expertise. “In second place, we had knowledge of the fundamentals of accounting and financial accounting as well as knowledge of Corporate Governance,” explains Alfred Berger, Head of Compensation and Performance Management at Kienbaum Vienna. Executive boards on the other hand, were looking for more knowledge of compliance, risk management, and supervisory law.

Efficient Configuration of Supervisory Board Responsibilities Desirable

Almost all participants in the survey were of the opinion that supervisory board responsibilities have increased in recent years, especially the amount of work away from meetings, while the number of meetings itself remains unchanged. “Participants’ estimates of time spent varied widely,” explains Alfred Berger. “The chairman of a supervisory board can expect to devote between 36 and 54 days a year to it, a deputy between fifteen and 33 days. For ordinary members, the figure is between twelve and 24 days.” The study’s slogan “the road to success in the triad” appears fully justified, with collaboration between the executive board and senior executives described as being good to very good, with the latter working autonomously and independently, despite clear guidelines. Executive boards were keen to see the responsibilities of the supervisory board configured with greater efficiency in the future, with virtual data spaces and better qualification and preparation for individual meetings seen as key levers for change.

Digitalization Demands New Skills 

The extent to which the importance of digital skills is categorized, differed between supervisory boards and executive boards. The former set great store by adherence to IT compliance and to dealing with modern organizational forms, while the latter considered experience with digital business models and scrutiny of technological innovations as key to alignment with the digitalization mega trend. To ensure the requisite skills, the majority expressed a desire to populate supervisory boards with members from countries seen as digital leaders and to integrate “digital natives” into committees. “There was, however, quite a gap between want and reality. None of those surveyed said that they had supervisory board members from any of these countries,” explains Alfred Berger.

GFMA-G: Lack of Pool of Suitable Female Candidates for Senior Positions

The Gender Equality Law, or GFMA-G, came into force on January 1, 2018, and was considered unhelpful by the majority of participants in the study. Women currently account for sixteen percent of supervisory board members, with the figure for executive boards as low as seven percent. The study indicated that the biggest hurdle to more women being posted to both boards is a lack of a pool of suitable candidates.

Board Remuneration Remains a Central Task

Participants opined that the level of remuneration was rather excessive, especially in larger companies. For medium-sized companies and their own companies, participants considered remuneration mostly appropriate. “Many participants expected remuneration to stagnate in the future, especially in their own companies and medium-sized companies. For larger companies, participants were equally split between those expecting consistency and those expecting an increase,” explains Alfred Berger. Participants from executive boards and supervisory boards considered a ratio of 2.3:1 to 3.9:1 between the board chairman’s remuneration and the directly subordinate management level appropriate. This ratio was considered appropriate in private ownership structures, with a ratio of 1.5:1 to 3.8:1. Both supervisory boards and executive boards agreed that when it comes to configuring board remuneration, the priority lies in increasing company value. Multi-year variable remuneration in particular will see an increase in the market, thereby gaining in importance.

Über Kienbaum

Gegründet 1945 ist Kienbaum das erste Beratungshaus Deutschlands und die einzige Personal- und Managementberatung europäischen Ursprungs. Das Unternehmen ist weltweit mit 22 Büros auf vier Kontinenten vertreten. Als Familienunternehmen mit über 600 Mitarbeitenden befähigt Kienbaum Menschen und Organisationen dabei, Potentiale in Fortschritt zu verwandeln, um eine zukunftsfeste Aufstellung einzunehmen: www.kienbaum.com.

Über die DBU Digital Business University of Applied Sciences

Die DBU Digital Business University of Applied Sciences ist die Wirtschaftshochschule für das digitale Zeitalter. Als staatlich anerkannte Hochschule mit Hauptstandort in Berlin bietet sie innovative Bachelor- und Master-Studiengänge sowie Weiterbildungsangebote, die inhaltlich und konzeptionell auf die Bedürfnisse der Wirtschaft im digitalen Zeitalter ausgerichtet sind. Studiert wird zeitlich und räumlich flexibel, denn die Studieninhalte stehen digital zur Verfügung. Die Studiengänge lassen sich auch berufsbegleitend absolvieren. Optionale Präsenzeinheiten am DBU Campus in Berlin Kreuzberg oder bei regionalen Unternehmen garantieren zudem Praxistransfer auf höchstem Niveau. Die Weiterbildungsangebote der DBU kombinieren wissenschaftliche Expertise mit hoher Praxisorientierung und lassen sich bei Bedarf direkt an die individuellen Anforderungen jedes einzelnen Unternehmens anpassen. Das Leistungsspektrum der DBU qualifiziert die Hochschule als idealen Bildungspartner für Unternehmen auf dem Weg in das digitale Zeitalter: www.dbuas.de.