“This can present quite a dilemma, particularly at critical moments”, according to Marry. “Supervisory directors are not empowered to take executive decisions, but they are required to intervene if obviously wrong strategic decisions are taken that are not in the company’s best interest. This is because they share responsibility for long-term value creation. They must hold themselves out as independent, but still stay informed of everything that goes on in the business, especially when a company is undergoing developments that could significantly impact continuity”.
In order to bridge the gap between an organisation and its supervisory board, Marry advocates customised governance and management structures that allow supervisory directors to play an active role and stay closely involved with the management while still retaining their independence. “This encourages strong partnerships among all of the stakeholders when developing corporate strategy”, says Marry.
In the world today, governance presents significant challenges for companies, particularly in the international arena. The playing field is becoming increasingly complex, shareholders are more demanding, the number of stakeholders is growing, and regulations are constantly evolving. As a result, boards and supervisory boards might find themselves under pressure at unforeseen moments. A stress test is a tool that quickly shows how well the company’s governance structure is capable of withstanding critical situations.