Effective supervisory board work: HSG professor supports German government commission

Companies are forced to adapt their business models and processes in ever faster cycles. Relevant options for decision making be continuously reprioritized and reevaluated at short intervals. Thesw supervisory boards must also take this development into account, since their retrospective control can no longer guarantee the long-term success of the company in a volatile environment. In view of this tension, the government commission “German Corporate Governance Code (DCGK)” with the participation of the universities of St.Gallen and Göttingen published the practical impulse “Effective supervisory board work through active strategy support” in February 2025.

Strategic support instead of pure control

“An effective supervisory board should go beyond its pure control function and actively shape strategy in order to effectively support corporate goals,” explains Prof. Dr. Georg Guttmann from the University of St.Gallen, who co-authored the practical impulse together with Prof. Dr. Michael Wolff, professor of Management and Controlling at the University of Göttingen. “In doing so, the committee should act as an advisory and consulting sparring partner for the board of directors, without questioning the management competence and autonomy of the board of directors.”

The practical impetus comprises of seven specific starting points for designing the work of a supervisory board to support strategy. Examples include systematic institutionalization of the supervisory board's strategy work, strategy-compliant training of the supervisory board, use of strategy-derived requirement profiles for the composition of the supervisory board, or regular and critical evaluation of its own work.

“Close coordination with the management board, regular strategy workshops and continuous professional development strengthen the strategic role of the supervisory board,” says Guttmann. In this way, the supervisory board is more likely to ensure that companies successfully meet current challenges. In addition, active strategy support can help to make better use of the experience and skills available in many supervisory boards. The Praxis-Impuls (in German) is available online for download.

The “German Corporate Governance Code (DCGK)” is a government commission set up by the Federal Minister of Justice in September 2001 and consists of representatives from the management and supervisory boards of capital market-oriented companies and their stakeholders. It formulates standards of good corporate governance in the DCGK, which it reviews annually. The standards are not developed by the commission alone but are formulated on the basis of dialogue with representatives from business, politics and the public.

Image: Prof. Dr. Georg Guttmann 
(Copyright: Executive School of Management, Technology and Law (ES-HSG))