What can a managing director do if one of his supervisory directors does not perform well? The brief answer is: anything, but the result is uncertain. There are two relevant sub-questions.
Not performing well
The first question concerns ’not performing well’. When is it fair to say that a supervisory director does not perform well? The answer to that question does not fit in the limited space of this column. Some short indications for the answer could be: not or irregularly attending meetings, always being late, being unprepared (not having read the documents), insufficient knowledge of management and supervision, attempting to ’take over the job of the management board’, using the ’power of hindrance’ too often, insufficiently keeping the company’s interest in mind, acting with a hidden agenda or on instructions of someone outside the company, etc.
Who should act?
The second question to be answered in this respect is who the most appropriate party is to do something about it. In general, this is specifically not the ’direct object’, so not the managing director himself. The party that has to act is the chairman of the Supervisory Board. In a healthy situation, aforementioned forms of undesirable behavior will be noticed within a Supervisory Board. The chairman has the duty to point out in private to the supervisory director in question that he needs to change his behavior. If the chairman fails to do so, the managing director can ask the chairman to take action. If he refuses and the Supervisory Board has a different opinion of the abuse identified by the managing director, the managing director has a larger problem.
Then what? In theory, he can turn to the shareholder directly. Before he takes such a drastic step, he should at least have made several attempts, orally and in writing, to resolve the problem with the Supervisory Board himself. Subsequently, it is up to the shareholder to make further inquiries and/or take measures, if necessary. The managing director has to accept the result hereof, or attach consequences to it. In short: resign himself. Sad, but that’s the way it works.