An unruly concept: trust. You have to be able to trust your life partner through thick and thin. That is how most people think.
Does that also apply to your partners in the boardroom?
Through thick and thin is an exaggeration, but trust is also essential in the boardroom. After all, board members and supervisory directors are both collectively and individually responsible and accountable for the quality of their collective performance.
If one of the players in the game does not prove trustworthy, then all are at risk. Not only they but the entire organization then has a problem. Yet the boardroom is about a different kind of trust than your life partner. You could call it business trust. It is not wise to confuse business trust with personal trust. This is even clearer in the relationship between supervisory directors themselves and in their relationship with the management board.
By law, supervisory directors also function as a collective. Here too, as with the four musketeers, the principle of “one for all and all for one” applies. So supervisory directors must also be able to trust each other. But that is easier said than done. The problem is that they hardly ever see each other. It usually won’t be much more than 20 to 30 hours a year. In those few hours there is a lot to discuss and little or no time to get to know each other. In addition, the agenda of the meetings is often filled by the board. It is usually about formal matters: are the minutes correct, is the budget correct, what new projects are in the pipeline, and so on.
These are not subjects on which you can naturally build up trust with your fellow supervisory directors. The relationship with the management board is even more complicated. Supervisory directors are completely dependent on the board they have to monitor for the quality and extent of their information. In fact, that is schizophrenic. The supervisory director’s responsibilities to the board are also schizophrenic. A monitoring role, a critical role and a role as an employer do not compare well with an advisory and a coaching role.
How do you reconcile these roles while maintaining a relationship of mutual trust?
It doesn’t stop there. Personal trust includes a certain unconditionality. You can’t trust your life partner just a little. In business terms, you can and sometimes must. A supervisory director may never trust a director unconditionally and without reservation. If you have unconditional trust, then you can no longer be critical. Then you can be consciously or unconsciously, intentionally, or unintentionally, manipulated. If, on the other hand, as a supervisory director you are constantly very critical, then you run the risk of eroding the (business) trust relationship. The board member will then ultimately provide less information or (consciously or unconsciously) subject this information to a selection. This in turn affects the supervisory board’s ability to monitor the management board properly and critically.
Complicated.
And the shareholder? How far can/should a shareholder’s trust in a supervisory director go?
Ministers who represent the country as shareholder in a public limited liability company often think that trust means that a supervisory director will obediently do what they want. This is incorrect. The trust of a shareholder must relate to whether the supervisory director in question is pursuing the interests of the organization with integrity. That is different from wanting to trust that the supervisory director will dance to your tune.
The same applies to the director. He must be able to trust his fellow board members and employees completely, both in business and in personal terms, but in his relationship with the supervisory board he is under a magnifying glass and there is structural caution. It is therefore a case of running like a house of cards.
A difficult and poorly paid job then, supervisory director.
