Because of the high demands placed on members of supervisory boards, the German Corporate Governance Code recommends their greater professionalisation as well as regular self-assessments of their operations and decision-making processes. The aim behind this is to bring about a lasting improvement in company supervision.

1. How frequent are supervisory boards assessing their operations and decision‑making processes?

The number of supervisory board members who stated that their corporate body scheduled regular self-assessments on an institutionalised basis again rose somewhat compared to the previous year: 55 per cent versus 46 per cent in 2023. Twenty-eight per cent of supervisory board members replied that such reviews occurred only irregularly or on an ad hoc basis. The suspected reason for this is still that, in many cases, a self‑evaluation of the supervisory board had just taken place according to the relevant cycle applicable at the company. Conducting self‑assessments too frequently involves the risk of them taking on a routine character and the quality of their findings being somewhat less meaningful, thereby reducing their efficacy. Three per cent of respondents stated in the text entry field that their self-review took place at a different interval, such as annually.

Figure 17: With what frequency does your supervisory board self-assess its own operations?

Major differences appeared this year as well between listed and unlisted companies with regard to efficiency self-assessments. In view of the frequency that the German Corporate Governance Code recommends for supervisory boards to self-assess their operations and decision-making processes, it is hardly surprising that such evaluations are institutionalised to a far greater degree at listed entities (75 per cent compared to 30 per cent at unlisted entities). Accordingly, noticeably more respondents from unlisted companies (43 per cent) than listed companies (16 per cent) stated that self-evaluations were conducted at irregular intervals on their supervisory boards.

2. How are efficiency self-assessments performed on supervisory boards?

In principle, there are three ways that a supervisory board can evaluate its efficiency. Compared to last year, the respective percentages of respondents deeming these approaches relevant changed only slightly: 68 per cent of supervisory board members stated that their self-reviews were conducted without external assistance (compared to 67 per cent last year). This response was given by 54 per cent of the respondents from listed companies and by 86 per cent of those from unlisted ones. Another 21 per cent of respondents from listed companies and 11 per cent of those from unlisted companies indicated that their supervisory board in fact conducted self-evaluations with external assistance. The remaining 25 per cent of respondents from listed and 2 per cent of respondents from unlisted companies answered that their evaluations were performed sometimes with and sometimes without outside support.

Figure 18: How does your supervisory board self-assess its operations?

3. Do efficiency evaluations on supervisory boards bring added value?

This year, 74 per cent of supervisory board members surveyed also attested to the (high) importance of efficiency evaluations. Definite proponents of these reviews can be found in particular at listed entities, where 25 per cent of surveyed supervisory board members deem them highly important. About one-fifth (19 per cent) found them neither important nor unimportant or attached little importance to them. Four per cent even view them as having no added value whatsoever. Supervisory board members conducting a self-evaluation, in many cases with external support, constitutes a relatively simple and good way of gauging opinions on the quality and the efficiency of the work performed by supervisory boards directly.

Figure 19: How do you rate the added value of your supervisory board's efficiency evaluations?

4. What are the specific findings from evaluations, if any?

In our survey, we asked members of supervisory boards whether or not specific findings had been gained from their evaluations and led to changed or improved procedures. Forty-two per cent said no. Among listed company respondents, that figure drops to 32 per cent, and jumps to 56 per cent for supervisory board members of unlisted companies. However, 37 per cent of all supervisory board members surveyed replied that the evaluations yielded specific findings with a view to improving their working procedures. This assessment was shared by the supervisory board members of listed and unlisted companies to virtually the same degree at 38 per cent and 37 per cent, respectively. In the text entry field, one-fifth (20 per cent) of respondents listed such improvements as those in the efficiency of members working together, the quality of the information provided to the board and of discussions at meetings, the streamlining of how meetings are held, the reduction in the number of documents, higher remuneration, the organisation of regular, internal workshops and the organisation of board meetings and committee work focussing more on important and future-oriented topics.

Figure 20: Have the evaluations resulted in any specific findings that led to changed/improved procedures?