Study on the role of the supervisory board in corporate communications

The law firm Noerr, the communications consultancy FGS Global and Professor Axel v. Werder from the Technical University of Berlin have continued their interdisciplinary study on the role of the supervisory board in corporate communications. Since the first study in 2018, the authors have gained the following practical insights in their new study:

Discussions with investors have become established practice for most supervisory board chairs, and the legal framework for this has also been consolidated. Most legal scholars consider it permissible for the chair of the supervisory board to hold discussions with investors and other stakeholders, at least on issues specific to the supervisory board.

This is also reflected in the rules of procedure for the supervisory boards of the companies listed on the DAX40. In most companies these rules contain regulations on supervisory board communication. However, there is little clear structure: although the rules of procedure contain basic regulations, there are rarely any separate communication rules with further detailed provisions. Likewise, no committees dealing with communication are set up by supervisory boards.

Supervisory board chairs communicate primarily with investors, followed by representatives of the media and non-governmental organisations and other stakeholders such as politicians and top officials.

Supervisory board communication with investors and the general public continues to focus on the traditional topics of management board appointments and remuneration as well as supervisory board remuneration.

Looking at the topics of discussion in the area of sustainability/ESG, the focus is on governance (“G”) topics such as personnel matters relating to the management board. Environmental (“E”) and social (“S”) aspects are addressed much less frequently overall, but at least in some cases. During the period under review, some supervisory board chairs also commented on Russia’s invasion of Ukraine, while few addressed environmental issues.

This finding is not surprising in view of the supervisory board’s remit: “Governance issues are at the core of the supervisory role, so it is not surprising they are also the main topic of discussion,” said Ingo Theusinger, partner at Noerr in Dusseldorf and an expert in stock corporation law and corporate governance issues.

However, the reticence regarding other topics, at least in interviews with journalists, is striking. Supervisory board chairs do not seem to consider media interviews a suitable forum for commenting on environmental (“E”) and social (“S”) issues in public. This appears to be different when talking to investors. “Discussions between investors and other stakeholders with the chair of the supervisory board have become established practice. There is usually a willingness to communicate,” noted Axel v. Werder. “Communicating with other contacts such as the media, NGOs, representatives of public bodies and politicians also plays a role in practice, albeit still a lesser one at present,” added Dirk von Manikowsky, partner at FGS Global.

“It will be interesting to see whether the sustainability debate and the flow of new EU regulations, directives and laws in the area of ESG will further change the topics of discussion and the dialogue contacts of the supervisory board,” said Ralph Schilha, partner at Noerr in Munich and also an expert in stock corporation law and corporate governance. After all, various EU regulations and directives provide for stakeholder dialogue, including dialogue with non-governmental organisations. Even if it is primarily the management boards conducting these dialogues, it stands to reason that supervisory boards will also be involved in the discussions as part of their advisory and monitoring roles.

The study is based on a written survey among the chairs of the supervisory boards of companies listed on the DAX, MDAX and SDAX indices, an analysis of the rules of procedure of the supervisory boards of the 40 DAX-listed companies, and a thematic and content-based evaluation of all interviews with supervisory board members that appeared in leading German media between January 2022 and April 2023.

You can request the complete study by email.