Supervisory board work

Meetings and attendance

On average, seven supervisory board meetings took place during the financial year 2023, falling from eight. Overall, the number of board meetings held among DAX 40 companies ranged from four to 10 meetings.

The number of supervisory board meetings required by law is unchanged, at four meetings.

Number of meetings (average)

	2016	2018	2020	2021 [Dax 40]	2022 [Dax 40]	2023 [Dax 40]
#	6.7	6.8	7.1	7.2	7.6	6.8

Committees

All supervisory boards in the DAX 40 work through committees. The average number of committees is unchanged at five; 16 companies (40%) have fewer than five committees. The three most prominent committees remain audit, nomination and presidential. Notably, only two companies maintain just two committees; both of them (Merck and Henkel) have families as major shareholders.

In Germany, various forms^* of the presidential committee (“Präsidialausschuss” or “Präsidium”) are established in 26 of the DAX 40 companies. This underlines the importance both of this committee and its chair, whose role is identical to that of the supervisory board chair in these companies. Typically, the presidential committee addresses important topics such as responsibility for the succession of C-level executives and, in some cases, their remuneration. Therefore, the following two sections on the nomination committee and the remuneration committee apply only to selected DAX companies.

* beside presidential, also presidial and presiding committee

Audit and risk committees

All 40 companies maintain an audit committee, with some combining audit with risk and/or compliance. Two companies combine audit with finance or investment finance in one committee. Four companies have dedicated finance committees. A further four have a dedicated risk committee.

On average, audit committees held six meetings during the year; the risk committee met five times. In 14 companies, at least 50% of the audit committee are women, a significant proportion given that in 2023 only nine companies reached this level of diversity. Overall, in 15 companies (38%) the audit chair role is taken by a woman, representing an increase of three companies compared with 2023, when only 30% or 12 companies staffed the audit chair role with a woman.

The number of international audit chairs decreased by three, from 11 to eight in the last year. The overall number of international audit committee members also fell, from 31 to 26 members.

Presidential committee

The presidential committee, a typical feature of the German governance system, has parity representation in most cases. 26 companies have installed this committee, which is entrusted with a wide range of tasks, such as executive board matters — from contractual arrangements to succession planning — and the overall setting for supervisory board meetings, even though the committee title varies.

In all DAX 40 companies, the supervisory board chair also chairs the presidential committee. Overall, there is a combined total of 120 presidential committee members, including chairs. In all companies the chair is a man. Among members, 23% (28) are women.

Nomination committee

All companies have a nomination committee, of which 35 focus solely on nomination issues. Three companies combine the topic with presidential, ESG, or governance.

Succession planning for shareholder representatives is clearly structured in line with the GCGC’s recommendation and is the responsibility of the nomination committee; one company combines the nomination and the presidential committee. Succession planning often includes undertaking regular reviews of the expertise mix of shareholder representatives, or self-evaluation of the board. In a few cases the nomination committee also oversees succession planning for the executive board.

In general, the supervisory board chair also chairs the nomination committee. Among the DAX 40 companies, there are only three female nomination committee chairs. One woman represents the major shareholder of a company, one chairs the supervisory board, and the third additionally comes with an international background.

In most cases, the nomination committee is composed exclusively of shareholder representatives. Exceptionally, the major family shareholder representative chairs the committee.

Personnel committee

The personnel committee is a long-established feature of German governance. In co-determined companies, its members are drawn equally from shareholder and employee representatives. At the time or writing, 17 companies still maintain a personnel committee, four of them chaired by women, one of whom is an employee representative. Of the 13 male chairs, one is an employee representative.

The committee deals with HR matters such as long-term succession planning, talent development, and employee satisfaction. In some cases, it also manages succession planning for the executive board, generally led by the chair of the supervisory board.

In two co-determined companies, the personnel committee is chaired by an employee representative. Executive board succession at both companies is handled by the presidential committee, led by the supervisory board chair.

At 10 companies, the supervisory board chair also leads the personnel committee. In six companies, the supervisory board chairs do not lead the committee but are members.

Remuneration committee

Dedicated remuneration committees operate at 13 companies, meeting on average four times a year. This committee is frequently paired with other committees such as presidential, personnel, or human resources.

A total of 58 supervisory board directors are remuneration committee members, of whom 20 are women and 38 are men. Among remuneration committee chairs, four (30%) are women.

Committees dealing with strategy

Ten companies maintain a dedicated strategy committee, most of them adding responsibilities such as technology, ESG, innovation, or sustainability to the strategy remit. At six companies the sustainability committee also covers areas such as innovation, finance, ethics, compliance, or diversity and inclusion. In 2023 a dedicated strategy committee was noted at seven companies, frequently combined with technology.

Strategy is often covered in dedicated strategy meetings or closed conferences with increasing trend and conducted in 38% of all DAX 40 companies. 10 (25%) of the companies have a strategy committee, compared to seven in the previous year.

Companies with dedicated strategy meetings/closed conferences (%)

	2016	2018	2020 [Dax 30]	2022 [Dax 40]	2023 [Dax 40]
%	36%	46%	49%	33%	38%

As seen in our previous Board Index edition, ESG and sustainability remain a substantial part of the boards’ agenda. In the current edition, 19 companies (48%) address these responsibilities in various committees, including five with a dedicated ESG committee.

Supervisory board reviews

Supervisory board reviews (“Effizienzprüfungen”) continue to be a crucial method for evaluating best practice in the boardroom, as outlined by the GCGC [D.12]. It states, “The Supervisory Board shall assess at regular intervals, how effective the Supervisory Board as a whole and its committees fulfil their tasks. The Supervisory Board shall report in the Corporate Governance Statement if (and how) the self-assessment was conducted.”

In 2023, eight companies (20%) did not conduct any board evaluations, representing a 33% decrease from 12 companies in 2022. The number of internal reviews rose from 45% (18 companies) to 63% (25 companies) in 2023.

However, board evaluations with external support remain uncommon and even declined slightly. Only seven companies (18%) conducted external board evaluations, down from eight companies (20%) in 2022.