SUPERVISORY BOARDS AND THEIR NEW ROLE AS A STRATEGIC BUSINESS COACH: OPENING THE GERMAN BLACK BOX OF UPPER ECHELONS

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Abstract

The board’s work is one of the most often discussed corporate governance mechanisms. Nevertheless, the board’s work often is considered a black box or a closed circle, too. The traditional view on German supervisory boards’ tasks within the two-tier system is the one as as a past-oriented supervisor of the management board. In light of the current financial crisis, the call for a general role transfer of German supervisory boards to pro-active, future-oriented/strategic business coaching is getting louder. An empirical study opening the German black box of upper echelons investigates if or/and how such a role transfer has already was carried out. Findings reveal that supervisory boards now actively advice the management board to build up and monitor strategic goals and react immediately case of evidence of a crisis. Moreover, supervisory boards do not longer exclusively consider financial key data but also qualitative data on human resources (e.g. skills/know-how) and sustainability issues (e.g. stakeholder integration) when evaluating strategies.

Keywords: Corporate Governance, Two-Tier System, Upper Echelons, Strategy, Germany

How to cite this paper: Eulerich, M., & Stiglbauer, M. (2012). Supervisory boards and their new role as a strategic business coach: opening the German black box of upper echelons. Corporate Ownership & Control, 9(3-3), 321-329. https://doi.org/10.22495/cocv9i3c3art1