The fund company Deka and an influential advisor to institutional investors reject the re-election of Kurt Bock to the BASF supervisory board. It is on the agenda of the chemical company’s general meeting next week. If Bock were to return to the supervisory board, the members of the board would probably elect him as chairman again.
A chairman of the supervisory board who was previously chairman of the board cannot be independent per se, criticizes Deka fund manager Ingo Speich: “Conflicts of interest are programmed, and even a cooling-off period does not change that. It is time for the old succession regulation will come to an end in the German corporate world.” And that is just one of the reasons for Speich not to re-elect Bock. Deka’s criticism of the compensation system has gone unheard for years, there is a lack of diversity on the board and the share price development is anything but positive.
Kurt Bock, 66, was CEO of the Ludwigshafen-based chemical company from spring 2011 to spring 2021. After a cooling-off phase, as required by the Code of Good Corporate Governance, he was elected to the Supervisory Board at the 2020 Annual General Meeting and was then elected head of the supervisory board by its members. So he’s been doing this for four years now.
The voting rights advisor Institutional Shareholder Services, ISS, also rejects Bock’s re-election. Such service providers advise institutional investors and influence their voting behavior at general meetings. According to the ISS criteria, the cooling-off period should be at least five years because former CEOs are not independent. The head position of the control committee should be filled externally. First they had Business Week reported on the resistance.
What fund companies like Deka say has weight. Two years ago, Deka changed its regulations regarding the election of former CEOs. The criticism of Bock is understandable. At a good 51 euros, the share price is far away from previous highs. The diversity on the board is manageable – in many respects. Both Kurt Bock and his successor as CEO, Martin Brudermüller and now Markus Kamieth, are, what they like so much at BASF, homegrown. The latter have spent their entire professional lives at BASF. Only Kurt Bock was away at least briefly, two years at Bosch.
At competitor Bayer from Leverkusen, four of the seven board members are currently not from Germany; CEO Bill Anderson was born in Texas. At BASF, only one board member – Anup Kothari – is not from Germany. As with Bayer, there is currently only one woman on BASF’s board of directors, Katja Scharpwinkel since the beginning of February. BASF announced the personnel changes in December, at the same time as Kamieth was appointed as Brudermüller’s successor at the end of the 2024 general meeting. There were also surprising departures. Two women who had temporarily been considered candidates for successor left the company.
The fund company Union Investment wants to vote for Bock’s re-election. “It would be more than unfortunate if Martin Brudermüller and Kurt Bock left the company at the same time as the CEO and the head of the supervisory board,” said fund manager Arne Rautenberg.