Stakeholders have clear expectations regarding the communication of supervisory board chairs

Stakeholder requirements for the communication of supervisory board chairs

A key finding of the study is that the media have a high interest in corporate governance issues. Through the mediating role of the media, topics relevant to supervisory boards can become established in media discourse. Thus, public opinions are formed on topics such as board compensation.

A large proportion of media coverage is based on companies’ regular communications and statements made by supervisory board chairs as part of their disclosure obligations. However, around 20 percent of the reporting is already based on voluntary statements by supervisory board chairs or personalized reporting.

In analyst reports, topics and statements specific to supervisory boards have so far rarely been addressed.

Transparency is a central expectation of the supervisory board and its communication. All stakeholders want comprehensive and up-to-date information on the work and decision-making of the supervisory board. These transparency requirements can, to a substantial extent, be covered by disclosure requirements.

However, the annual Supervisory Board report only summarizes the work in retrospect, which is why stakeholders would like more up-to-date communication measures in the future.

In addition, supervisory board chairs and IR and PR officers should be aware of the interests of stakeholders and take them into account in their communications.

Method

We analyzed the requirements of relevant stakeholders regarding the communication of supervisory board chairs from an external perspective. For this purpose, we examined the reporting on the supervisory board chairs of the 30-DAX and 50-MDAX companies. The analysis was conducted in 15 daily and business newspapers as well as analyst reports over two years (2016-2017). In addition, we conducted nine qualitative expert interviews with stakeholders (institutional investors, shareholder protectors, voting rights advisors, and business journalists).

Investors

want to contribute their opinions and form an opinion of the chair of the supervisory board

Shareholder advocates

expect equal treatment of all investors

Voting rights advisors

primarily want to clarify technical issues

Journalists

hope to be able to assess events from the perspective of the supervisory board

• ``If the chair of the supervisory board is bubbling over with ideas – that can have real implications for our investment decision. But for me, 80 per cent of the discussions are purely a normal, additional communication channel. But that's crucial, that they have that information. It gives you a better feel for what's going on.``

(Investor)

• ``I would like to see the supervisory board also seek a dialogue with the most important stakeholders five or six months before the agenda for the Annual General Meeting is published. Just to hear, what do they have in mind? What are their requirements?``

(Shareholder advocate)

• ``I expect supervisory board chairs in particular to know what they are allowed to say and what they are not allowed to say. That they also have in mind that we – journalists – sometimes like to make mountains out of molehills and that they have to classify correctly, with whom they are talking and what they say to that person.``

(Journalist)

``The primary purpose for engagement, just within the process of doing analysis work, is really that we're about writing factually correctly. And when we approach a company now, we're primarily concerned with those issues.``

(Voting Rights Advisor)