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Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

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Buhlmann's Corner

“Winning in a changed environment”

Deutsche Bank between Kraft Foods/Mondelez and Glencore/XSTRATA

Is this the changed environment in which the two-headed Deutsche Bank board now wants to win? Should the Bank be divided at the breaking point on the board, as Kraft Foods was (or earlier Bayer and Lanxess; the experience of Werner Wenning is prominently represented on the Supervisory Board, after all)? Or should it join forces with a financial house with an eye to stabilization, as is currently being practised on the commodity market?

The politician’s approach is obvious. With connected surprise-attack headlines on topics where envy, insecurity, lack of understanding and lack of responsibility for the future are combined, efforts are being made to attract attention. Of course, you can split the Deutsche Bank and cobble together 25 Raiffaisen banks out of it – but then Siemens will have to split its funds too, for none of these resulting Raiffeisens will be strong enough. ThyssenKrupp and BASF will then probably look for their financial companion in Paris, London or Beijing, as the only institution of any rank has gone down. Also, by the way, the only institution having cross-border importance that has not claimed state aid.

If it’s so easy to divide a complex institution, why then did Allianz finally fail? It cannot have been stupidity there. If we separate transmission and engine within the same holding company/ bodywork (as the European Erkki Liikanen proposed) will the car be faster and stronger? Or is all we can achieve that it no longer runs into the wall, because it’s stopped moving?

Was it not those very politicians who from WestLB to SaarLB to Bankia & Co serially and demonstrably failed? Even where they were sitting there with special rights and influence at all levels, it went clamorously wrong: IKB – State Bank shareholders, Supervisory Board appointment rights and State secretaries as well as regulators on the Supervisory Board. The result is now in Texas. At least in the second part of the global crisis of confidence (the so-called financial crisis), the same politicians bear the blame with their credit hunger as are today competing with proposals for splits. Some want to become chancellor, others have no bank in their Land; and the onlooking Michel Barnier will know why he kept silent.

The irresponsibility of politicians is topped only by the shareholders, whom everything seems to pass by, who do not turn up for the General Meeting even when something essential is pending – the Deutsche Bank attendance of one-third is embarrassing, for the shareholders not for the Bank. The shareholders who did appear set a clear signal for the new bank management by their 25% refusal of discharge. That should not be politically readjusted after one quarter. The bank needs its shareholders now!

In this critical situation, the Supervisory Board is once again facing a choice of direction. Is the multiple Supervisory Board member and Green politician as head of the ver.di union to take a seat directly, alongside Paul Achleitner as his deputy, on the Supervisory Board of the bank? The Deutsche Bank needs characters and role models right now – so the employees should also make an effort and not let the seat today occupied from within the bank by trade unionist Karin Ruck as part of participation leave the house! And if it does, then not to Frank Bsirske, time and again caught up in conflicts of interest. At his RWE client, he stands out because he collects and phones while he’s in the meeting. At Lufthansa, he has the dubious distinction of being the only board member to be without discharge. The AGM refused him it on 18 June 2003, after he had damaged the company before – which does not stop him holding on to office and taking free first class flights, while his members at Lufthansa are on strike (2008). The refusal of discharge for the unionist was worth three columns on the first page for the Financial Times – the person concerned was just pale and grinning.

The Deutsche Bank, the employees, and the reputation of the (last international) bank of the country whose name it bears, deserve a better Supervisory Board – partly, and especially, so as not to discredit the basically good model of German co-determination internationally. Employee participation, unlike functionary participation, is often helpful, and promotes the whole person, not just the political stars full of conflicts.