When Ton Büchner called in sick a few months after taking up his position as top executive at AkzoNobel in 2012, something had to be done. The supervisory board was faced with a dilemma. There was no definitive departure yet, but it was also unknown how long the company would be without a CEO. What are you doing then?
The solution was found with Antony Burgmans. As a supervisory director at the paint company, he temporarily supported the board. “I then had an office at the head office where I often went to talk to some people in the morning,” Burgmans says now. “Then drivers told about their plans. For example, to build a factory in China. I heard that and then advised. In the case of that factory, I said: definitely do it.”
Also read: Jumbo opts for an unusual solution: Commissioner Ton van Veen temporary successor to CEO Van Eerd
Burgmans thus fulfilled the role of delegated commissioner, without being called that at the time. He advised the board, but did not take any decisions himself – after all, Burgmans remained a supervisory director. The administrative intervention is a rarity in the top of the Dutch business community. De Telegraaf Media Groep had to deal with it in 2013 when the CEO resigned and there was a temporary successor was found in Commissioner Michiel Boersma. And Commissioner Jan Hommen was once appointed CEO of ING, but that was a permanent appointment.
On Tuesday, the delegated supervisory director came back into the spotlight when Jumbo announced that two supervisory directors will support the management. The supermarket group has been without a top executive since Frits van Eerd announced a week and a half ago that he was stepping down from his position for an indefinite period. Van Eerd is one of the suspects in a major money laundering investigation. That would have happened through questionable cash deposits, real estate transactions, car trading and “sponsor contracts in the motocross sport”, according to the OM.
Former financial chief and now commissioner Ton van Veen will “temporarily lead the Jumbo management team”. Colette Cloosterman-van Eerd, Frits’ sister, will “play the connecting role between the organization, the supervisory board (RvC) and the family,” Jumbo reported in a press release. She will also take over the role of Vice-Chairman of the Supervisory Board from Ton van Veen.
Is it smart that Jumbo opts for such a construction? NRC talked about it with three experts in the field of governance. They warn: the construction should not take too long.
Experts warn that this construction should not take too long
double role
In fact, very little has been recorded about the delegated supervisory director, says Mijntje Lückerath, professor of corporate governance in Tilburg. “It is a supervisory director who is given a specific task by the supervisory board, for example supporting the board in the absence of the CEO. That person will remain on as a supervisory director.”
A delegated supervisory director therefore does not manage, but there is often a difference between legal reality and practice, Lückerath concludes. “The delegated commissioner will certainly be involved in strategy and operational matters.”
Ton van Veen and Colette Cloosterman-van Eerd will therefore not officially join the board, but as supervisory directors they do assess the functioning of the board that they now temporarily support. In a way the construction is strange, says Lückerath, “because you are still supervising yourself”. “But you can make agreements about that. So what are you all about as a driver? And do you, as a member of the Supervisory Board, then withdraw if that point is discussed in the Supervisory Board? You have to keep it apart.”
Positioning the two as delegated supervisory directors creates a ‘diffuse division of roles’, says Leen Paape, professor of corporate governance at Nyenrode. “I wouldn’t have solved it that way myself. I don’t see the need for Colette to sit closer to the board, but that may have to do with the family’s desire to be represented on the board.”
Jaap van Manen agrees. Until 2018, he was chairman of the committee that dealt with, among other things, updating the Corporate Governance Code, a kind of code of conduct for directors of large companies in the Netherlands. “There must be a clear segregation of duties. The board prepares policy, supervisory board members monitor. You cannot do both tasks.” According to the view, supervision becomes less effective with ‘dual functions’. „In that sense, I especially like the move of Frits van Eerd’s sister is striking, because she is now also deputy chairman of the Supervisory Board. Ton van Veen is someone who has enjoyed the trust of the family for eighteen years. Are their interests not sufficiently served by his appointment?”
Moreover, the step back to full-time supervisory board is becoming more difficult. Someone who has been a real director for a longer period of time can come into conflict with his fellow directors when he takes up the supervisory board role again and has to check the results of his own policy, says Lückerath. “That can also be a hassle in mutual relationships. Just join as a supervisory director when the board shoots down a project that you set up at the time.”
Little legally defined
There is not much in the law about good governance in the Netherlands. Most of it is contained in codes and articles of association, such as the Corporate Governance Code. Although the code is mainly aimed at listed companies, family business Jumbo subscribes to the code ‘as much as possible’. writes it on his website.
However, the code does not specify how long someone can remain a delegated supervisory director. “I was asked by shareholders: how long are you going to do this?” Burgmans recalls about his role at AkzoNobel. “Every case is different,” I said. But you have to think about a few months rather than years.”
That is also the opinion of the governance specialists who spoke to NRC for this piece. “I think a year is a long time,” says Jaap van Manen. „Then you better choose [permanente] replacement of the driver.” An important question is how long the investigation into Frits van Eerd’s involvement in possible money laundering will take. Van Manen: „You are one or two years further. The other supervisory directors must always keep in touch with each other about this. How long can this situation take before you come up with a structural solution?”