Discharge of supervisory board at Deutsche Bank

Good corporate governance is vital in managing and mitigating risks, enhancing company growth and building a trusting relationship with investors and other stakeholders. As evidenced by the 2008 financial crisis, corporate governance failures such as poor risk management and inadequate board oversight at large banks have the potential to destabilize the entire financial system. Over the last few years institutional investors have signalled closer monitoring of corporate governance issues and have been more vocal in expressing any discontent.

The annual vote on the discharge of the supervisory board in German listed companies gives shareholders an opportunity to express their opinion about the performance of its members in the last fiscal year and express continued confidence (or otherwise) in them. Following an intensive engagement with Deutsche Bank at senior executive and board level since 2008, Hermes Equity Ownership Services filed a shareholder counterproposal the to discharge of the supervisory board, which gained 22.3% of votes in favour. The main reasons behind the resolution were deficiencies in the succession planning of the outgoing CEO, failed nomination of the CEO for election to the supervisory board, failure to take account of significant investor concerns about management board remuneration and insufficient alignment of the company culture and strategy with the principle of sustainability