Organisation - November 1, 2012

Under supervision

Do supervisory boards need to change their approach?

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Supervisory boards are supposed to keep an eye on the executive boards of public bodies but their reputation has taken quite a bashing of late. Do they really know what is going on? And are they independent enough? Wageningen supervisory board members doubt whether there is a need for reform. 'I think it already works well.'
It is a popular tale among supervisory board members. Former Prime Minister Barend Biesheuvel arrives at a board meeting, picks up the envelope with the meeting documents, tears it open and says: 'Well, what shall we talk about today?'
Apocryphal or not, those days are over. Supervisory boards have been wrenched from their peaceful, obscure existence by what is now a long list of scandals. The degree fraud at InHolland, Nurten Albayrak's reign of terror at the refugee reception organization COA, megalomaniac management at Amarantis, profligate speculating at Vestia and VUMC's quarrelling pulmonary physicians. The supervisory boards came in for severe criticism in all these cases. Shouldn't they have intervened earlier? The implicit answer at InHolland, COA, Amarantis and VUMC was 'yes' as the boards in question resigned.
Checks and reflection
But will that change things? That question is relevant for Wageningen UR now that replacements have to be found for three of the five supervisory board members in the next two months. And the applied university VHL, which is being hived off, will get an entire new supervisory board of its own. State secretary Bleker already has lists of candidates and he will soon be making his choice.
Expectations are high. Perhaps too high, thinks Margreeth de Boer, who chairs the Wageningen UR supervisory board. She says the task of the supervisory board is becoming almost impossible. Society expects more from supervisory boards than they can deliver. They have a limited mandate but society still holds them responsible for management errors.
'If you think the supervisory board ought to know what is going on in a pulmonary ward then you need very different powers and a completely new formulation of its tasks,' thinks De Boer. 'Our role is to provide checks and reflection. The executive board implements policy, it develops the strategy and manages the organization.' The conclusion is that if society now has different expectations, the first step is to revise the tasks of the supervisory board. 'It would need more powers,' says De Boer. Only to add: 'But I'm not in favour of that. I think it already works well.'
Ear to the ground
For instance, a common problem among supervisory boards that do not function properly is a lack of information. That is not something De Boer fears. 'We get an awful lot of information. From Aalt Dijkhuizen, for example; he emails me continuously about what is going on here. We also talk to Martin Kropff and Tijs Breukink, the management layer below that and the employees' council. On top of that, we read Resource and other publications and we also get phone calls from people within the organization. I don't claim we know everything but I will say we know a lot. Also, we weren't born yesterday.  We have sufficient social skills to keep our ears to the ground and find out what is going on.'
Another difference compared with the supervisory boards of housing corporations, for instance, is that the members do not come from the executive board chairman's own network. Jaap van Duijn, the supervisory board vice-chairman, explains: 'The Vestia director had propped the supervisory board full with his friends. That is simply not possible with the Wageningen construction.' At Wageningen UR the supervisory board looks for the new members, who are appointed by the minister. Van Duijn: 'That is a carefully considered decision, not simply a stroke of the pen.'
Margreeth de Boer prefers not to say too much about the subjects discussed by the executive board with supervisory board. She does reveal that the most important item on the agenda for the past year was the split with VHL. She also hints that there were discussions about the complaints of intimidation by Aalt Dijkhuizen ('you can assume that everything gets discussed').
Organizing opposition
The supervisory board remains reluctant to get involved in specific policy matters. That may be different for the new supervisory board for the 'hived off' Van Hall Larenstein. That supervisory board will be helping to formulate policy if it is up to Jeroen Naaijkens. The former executive board chairman of HAS in Den Bosch was the coordinator charged with finding a new supervisory board for VHL; he also considered what the new body should do.
Naaijkens: 'A university of applied science is a people business - you need people who make contacts and build networks. The applied university's management team is also quite small so you need strong sparring partners. In my opinion that means you need a supervisory board that can play a coaching role and has a deep understanding of the subject matter, for example arable farming. Then they will be able to identify trends and advise the executive board.'
Naaijkens admits there is a risk to this approach. There are never that many experts in a particular discipline and a supervisory function can be difficult if you know each other well. He feels that the supervisory board should therefore function as a team and organize counterarguments. Naturally you need to monitor the finances, says Naaijkens, but that does not mean you need a lawyer or accountant in your supervisory board. 'You need to be able to appoint a good auditor but of course you don't need a lawyer for strategic developments.'
The task is less far-reaching at Wageningen UR, but even here the supervisory board does more than just monitoring. De Boer explains that she 'helps consider issues' and 'spars'. But she emphasizes that 'we don't take over the function of the executive management. We are not about to start developing strategy, our task is to approve or reject it. That is the legal position: we supervise, the executive board implements.'
 
Two bankers and three administrators

The supervisory board has three functions. It carries out checks - of the requirements for financial reporting, for example; it acts as a sounding board for the executive board ('Why do you want to do that?'); and it is an employer - it appoints the executive board members, is responsible for salaries and allowances, and holds job appraisal interviews.
The members of the supervisory board are appointed by the ministry of Agriculture, currently by the state secretary for Agriculture, Henk Bleker.
Wageningen UR has five supervisory board members: two bankers and three public administrators. Margreeth de Boer was minister of the Environment in the first Kok cabinet and is currently also on the supervisory boards of Shell and nature management agency Staatsbosbeheer. Hanja Maij-Weggen was minister of Transport in the same cabinet and is now on the supervisory boards of Connexxion and ING. Laurent van Depoele was Rural Development director at the European Commission. Jaap van Duijn was a director in the Robeco group and is now on the supervisory board of the listed company Value8. Berry Marttin is a member of Rabobank's executive board.
The term of office for Maij-Weggen, Van Duijn and Van Depoele expired on 1 September but has been extended to 1 January.


Ministry of EL&I
Supervisory board
Executive board
Science groups, Imares, Rikilt etc

Jaap van Duijn (left): 'The Vestia director had propped the supervisory board full with his friends. That is simply not possible with the Wageningen construction.'
Margreeth de Boer (right): 'We have sufficient social skills to keep our ears to the ground and find out what is going on.'
 

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