Marry de Gaay Fortman is an expert in the field of corporate governance and regulation within large companies and public and semi-public institutions. Supervisory directors have a difficult job: their constant challenge is to be sufficiently involved with the executive board, while at the same time maintaining their independent position.
“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 large companies and institutions. The playing field is becoming increasingly complex and international. Shareholders are more demanding, the number of stakeholders is growing, supervisory bodies can take action and regulations are constantly evolving. As a result, the positions of boards and supervisory boards might be 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.
Marry de Gaay and Sebastian de Bruijn (together with Stefan Peij of the Governance University) wrote a chapter on boardroom dynamics for the latest edition of the Dutch manual Handboek Corporate Governance (Boom 2022). In this chapter they also address the challenges for supervisory directors.