Female shareholder representatives
Among chairs, there are only two women, compared to three in the previous year. Including chairs, of the 342 shareholder representatives, 133 are women (39%). However, excluding chairs, women account for 43% (131) of the shareholder representatives, a 4% fall compared to last year.
Within that group, 35% women are non-German nationals.
The proportion of women among the newly appointed shareholder representatives decreased to 47% compared to 53% in the previous year, a drop of 11%.
Men continue to dominate German DAX 40 supervisory boards. In general, only a few companies have more female board members (all NEDs plus employee representatives) than the law requires.
International shareholder representatives
The average proportion of international shareholder representatives fell to 24%, an 8% decrease compared to last year. This drop demonstrates the downward trend seen among proportions of international shareholder representatives noted in previous years.
Average percentage of foreign shareholder representatives
|
2016 |
2018 |
2020 |
2021
[Dax 40]
|
2022
[Dax 40]
|
2023
[Dax 40]
|
| % |
28% |
29% |
31% |
28% |
26% |
24% |
Among individual boards, the range of international diversity once again stretches from zero (Heidelberg Materials, Merck) to 100% (Airbus). Only 12 of the companies under review have more than 30% international board directors in their supervisory boards. In 11 companies, international representation ranges from 5% to 10%.
The majority of international shareholder representatives in German DAX 40 companies reaching double-digit numbers are US citizens, Austrians, French and British, followed by Dutch and Italian.
Mix of expertise
The German Corporate Governance Code recommends that competency and experience profiles be drawn up for shareholder representatives. Alongside investor demands, this has heightened attention on the mix of expertise within supervisory boards. At least 95% of the DAX 40 companies have established such profiles.
Among shareholder representatives, backgrounds in industrial environments dominate, at 33%, followed by financial services at 21%. Expertise in the business and professional services industry accounts for 10% of backgrounds, equal with healthcare. Although demand is increasing, only 2% of shareholder representatives have a legal background.
In terms of experience, 36% of shareholder representatives have CEO experience, 16% have P&L experience, and 11% have CFO experience.
Functional experience in the audit committee shows 21% bring CEO experience, 14% as CFO, and 4% at senior finance level. Legal and general counsels are represented with 1% each. Even though demand for financial expertise is an increasingly dominant expectation, management experience as CEO and/or P&L leader count for 28% and so continues to be stronger.
According to the rules for the supervisory board set by the Act to Strengthen Financial market Integrity (FISG), both the supervisory board of the stock corporation (AG), the partnership limited by shares (KGaA), the dualistic European company (Societas Europaea), and the management board of the monistic SE require that, with the amendment to § 100 Abs. 5 AktG (effective 2021), two financial experts are necessary on the supervisory board: at least one member with expertise in accounting and another member with expertise in audit.
It is only on the audit committee that any particular expertise dominates. Among the other committees, a wide range of experience is apparent. Notably, only 2% of members bring human resources experience, and this is not especially evident in the committees dealing with succession topics.
Age of shareholder directors
The average age of shareholder representatives is 60. When chairs are included, the average age rises slightly to 61.
Average percentage of foreign shareholder representatives
|
2016 |
2018 |
2020 |
2021
[Dax 40]
|
2022
[Dax 40]
|
2023
[Dax 40]
|
| 60 and older |
54% |
53% |
56% |
45% |
47% |
51% |
| Under 60 |
45% |
47% |
44% |
55% |
53% |
49% |
As in previous years, DAX 40 supervisory boards continue to meet gender quota requirements.
More women, many of them younger than their male board colleagues, were elected to supervisory boards. Four companies (BMW, E.ON, Rheinmetall, Zalando) had independent female shareholder representatives aged under 50 in their supervisory boards.
The number of supervisory board directors aged under 60 has increased during the past couple of years, resulting in a gradual rejuvenation of the DAX 40 shareholder representative cohort.
Age limits
Only 85% of the DAX 40 companies supplied information on age limits, with six companies not disclosing any insight on the matter; a 14% drop compared to the previous monitoring period. Still, the majority state a maximum age, until when a supervisory board director can seek election. About 38% (13) of those defined an age limit of 70, the same number (13 companies) defined their age limit at 72. 24% (eight) of the companies require board members to retire when they are 75 or older.
Tenure
The average tenure for all supervisory board members in the DAX 40 has dropped from 6.2 to 5.2 years since our last assessment in the 2023 Board Index.
2022 Tenure by role/diversity (in years)
|
BI 2023 |
BI 2024 |
| Chair |
8.9 |
8.7 |
| Shareholder representatives |
5.5 |
4.6 |
| Employee representatives |
5.4 |
4.2 |
| Women |
5.9 |
4.6 |
| International NEDs |
5.9 |
5.4 |
Independence
The German Corporate Governance Code has defined independence since 2020. Supervisory boards must disclose their deemed appropriate number of independent shareholder representatives and their names. The Code states: “a Supervisory Board member is considered independent if he/she is independent from the company and its Management Board, and independent from any controlling shareholder” (C6). Specifics are provided from C7 to C12. Additionally, in line with the Code’s recommendations, companies are using their websites to provide and update information about the independence of individual shareholder representatives.