Management Conflicts

With Multiple Mandates, a Fear of Going 'Overboard'

Nicola-Leibinger-Kammüller Source Michael Dannenmann
Investors are concerned about manager multi-tasking.
  • Why it matters

    Why it matters

    Pressure is increasing to limit the number of directorships held by top German managers. But demand for highly-qualified directors is outstripping supply.

  • Facts


    • The non-executive supervisory board oversees day-to-day management in German companies, with both shareholders and employees represented.
    • From the beginning of 2016, 30 percent of supervisory board members must be female.
    • German law allows up to ten directorships to be held simultaneously; investors are demanding a maximum of three.
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“Overboarding” is what shareholder activists call it when individual executives take on too many corporate directorships at once. The word, which hails from the United States, is now well established in the German corporate lexicon and pressure is piling up on top executives to cut back on multiple appointments.

German business may have become more open and international, but its robust old-boys network is intact. A quick glance around the country’s boardrooms reveals many men in their 60s and 70s.

Moreover, the same faces crop up on a number leading Germany companies’ boards. Although new regulations mandate specific expertise and diversity of gender, corporate Germany keeps hiring familiar figures for its supervisory boards.

“Counting up directorships is not a good metric to tell if directors are overseeing management critically, independently and responsibly.”

Nicola Leibinger-Kammmüller, Lufthansa director

But this is triggering strong criticism from investor groups. Leading proxy advisory firm Institutional Shareholder Services, or ISS, has campaigned against multiple directorships in America. Now they are pushing the issue in Germany. “It comes down to whether supervisory board members have the time to do their job properly in every company. In challenging times like these, that is a crucial question,” said Thomas von Oehsen, head of European research at ISS.

Werner Brandt, former head of finance at the software group SAP, is about to take over as board chairman at troubled electricity giant RWE. He already holds directorships at Lufthansa, light bulb maker Osram, the television company ProSieben Sat 1 and Qiagen, a biotech firm. At Lufthansa, there is now pressure on Mr. Brandt to step down, along with Nicola Leibinger-Kammmüller, another multi-tasking director, Handelsblatt has learned. “There will be at least one resignation,” said a source close to the Lufthansa board.

Mr. Brandt made no comment in response to Handelsblatt’s inquiries. Ms. Leibinger-Kammmüller’s departure would leave a bigger hole, given new rules enforcing a 30 percent quota of female directors. Ms. Leibinger-Kammmüller, widely admired for her leadership of laser firm Trumpf, sits on four other supervisory boards.

Legally, a total of ten positions can be held simultaneously. In an interview with Handelsblatt, Ms. Leibinger-Kammmüller hit back against the criticism: “Just counting up directorships is not a good metric to tell if directors are overseeing management critically, independently and responsibly,” she said.


The Five Most Powerful Supervisory Chairmen in Germany-01


The case of Lufthansa highlights the dilemma. “It is always the same candidates who are given jobs on the supervisory boards of major companies. It’s all about the network,” said Ingo Speich, portfolio manager at Union Investment. “The German old boys’ network is supposed to be a thing of the past, but actually it is still up and running,” he added.

The trouble is that managers like Mr. Brandt are hard to replace. In the wake of the 2007 financial crisis, a new law on directorships obliged companies to bring “financial experts” onto their boards. That crisis revealed that many directors simply could not follow the complex accounting manoeuvers common in today’s corporate world. Mr. Brandt chairs Lufthansa’s audit committee, where he brings precisely this expertise to the table.

And not only top finance experts are in demand. “The substantial professionalization of German supervisory boards in recent years is what underlies managers taking on multiple directorships,” said Marc Tüngler, head of DSW, Germany’s largest association for private investors. He thinks this better explains the boardroom bottleneck than loose talk of an old boys’ network.

“The German old boys’ network is supposed to be a thing of the past, but actually it is up and running.”

Ingo Speich, Portfolio manager, Union Investment

Some 800 competent directors are needed just to fill positions on the boards of the 160 leading companies on the DAX stock market index. German law gives representation to both shareholders and employees on the supervisory boards of listed companies. Within this landscape, very few executives come close to the legal maximum of 10 directorial appointments. In fact, only 29 people hold more than three positions. The vast majority have only one or two appointments. But this fact may have the paradoxical effect of limiting the pool for the top jobs.

Gender is another complicating factor. Since the beginning of this year, 30 percent of all supervisory directors have to be women. For historical reasons, this pool of candidates may be smaller. A well-qualified woman like Ann-Kristin Achleitner, a director at industrial gas supplier Linde, supermarket group Metro and reinsurer Munich Re, has experienced this problem first hand. She is very much in demand. If laws allowed, and she had the time, the Munich-based finance professor could sit on the boards of a dozen DAX-listed businesses.

This is another reason why Lufthansa are reluctant to see Ms. Leibinger-Kammüller step down from their supervisory board. The 54 year-old brings experience to the table, but she is also crucial in helping the airline reach the gender quota. Right now, the Lufthansa board is right at the 30 percent gender threshold. “It would not be easy to find a replacement at a corresponding level,” said a source close to the Lufthansa board.

The German Corporate Governance Code, the mandatory regulatory framework for corporate governance, recently addressed the question of “overboarding.” Its latest edition, published last year, insists that supervisory board members give an account of their time capacities when accepting appointments.

That fueled a growing debate. Some did not take to the instruction from above, meaning some supervisors may feel a little over-supervised. But mounting pressure from international investors shows the Code is not so far off the mark.


Germany s Top Supervisory Board Members-01


Dieter Fockenbrock is Handelsblatt’s chief correspondent for the companies and markets desk, focusing on corporate governance, opinion and rail transport. Jens Koenen leads Handelsblatt’s coverage of the aviation and space industry. To contact the authors:,

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