The Beyond-The-Crisis Shuffle: CEO Exit Trends in Germany's Corporate Landscape
By Lisette Schmidt, Frankfurt
Streamlining Decision-Making Procedures during German Business Retreats
It's no secret that companies may switch up their CEOs during tough times. In these economically challenging times in Germany, it's only natural that more companies find themselves in a pickle, leading to shifts in their leadership. Yet, when multiple CEOs depart or are pushed out of a company in a short span, eyebrows often raise - especially when two out of the three companies involved aren't usually troubled.
SAP's Board Restructuring
Software giant SAP's summer board reshuffle was justified as a move to initiate the next phase of growth, but at a cost. Marketing & Solutions board member Julia White, along with sales chief Scott Russell, were shown the door. The board areas for marketing and sales, it seemed, were simply extinct. While the sales department remains, the reasons for these departures remain unclear. Both executives had secure contracts until 2027, extended in 2023.
But it didn't end there. In early September, SAP's Chief Technology Officer, Jürgen Müller, announced his departure due to personal conduct issues at a company event - an unexpected exit not initially in the plans. The SAP board currently consists of five members, with HR chief Gina Vargiu-Breuer and CFO Dominik Assam joining early 2024 and 2023 respectively.
Not Just SAP
Last year, two-thirds of Lufthansa's current board were replaced. Only CEO Carsten Spohr and HR board member Michael Niggemann remained, with two departures due to age-related changes and one due to new opportunities at pharmaceutical company Sandoz. Christina Foerster, responsible for product topics and sustainability, also left, although the reasons aren't entirely clear. The board was subsequently reduced by one position, and only three new managers were appointed.
Unlike Lufthansa and SAP, industrial conglomerate Thyssenkrupp is in flux. CFO Jens Schulte recently resigned after six months in office and plans to join Deutsche Börse as CFO in 2025.
Schulte's departure fits neatly into Thyssenkrupp's tumultuous management changes. Three of the five board members of the steel division resigned amidst the strike over the division's future in August. CEO Bernhard Osburg stepped down, while labor director Oliver Burkhard also announced his resignation from the Thyssenkrupp board. However, Burkhard will remain with the company as CEO of the marine division. The company now needs two new board members.
A Leaving Legacy: SAP's Case
Lars Dalgaard, the founder and former CEO of SuccessFactors, recently left SAP's Executive Board. The specific reasons for his departure are not detailed in the available data, but his role in SAP, given his background in cloud technology, is significant. Dalgaard's departure could impact SAP's cloud strategy, as he is known for his expertise in cloud-based solutions.
Managing the (Executive) Seatwarmers: Implications and Future Outlook
CEO exits can create ripples stirring up change within a company. These transitions can reflect internal dynamics, strategic shifts, or external pressures. Effectively managing these changes is crucial:- Leadership Continuity: Securing capable successors to maintain or enhance company performance.- Strategic Realignments: Adjusting strategies in response to changes in leadership or market conditions- Governance and Accountability: Ensuring strong corporate governance to prevent or mitigate internal issues that could lead to leadership changes.
For Lufthansa and Thyssenkrupp, specific details on CEO exits are not yet available, so it's difficult to assess their situations without more data. However, the principles of effective leadership transition and strategic realignment would apply similarly. As they navigate these transitions, we'll watch as companies shape their futures and navigate the ever-changing corporate landscape.
- The unexpected departure of SAP's Chief Technology Officer, Jürgen Müller, came in addition to the board restructuring at the software giant, raising questions about the reasons behind these leadership changes.
- In the industry, CEO exits can create ripples within a company and set the stage for leadership continuity, strategic realignments, and enhanced corporate governance, as seen in the case of SAP due to Lars Dalgaard's departure.
- Reminiscent of SAP's recent changes, industrial conglomerate Thyssenkrupp also finds itself in a phase of restructuring, with key executive positions vacant, including the July departure of CFO Jens Schulte who is set to join Deutsche Börse in 2025.
- Walldorf-based SAP and German airline Lufthansa have both experienced significant CEO exits in their respective boards, signifying the transformative impact these changes can have on the business landscape, leadership, careers, and strategic evolution of companies in finance and other industries.
- The restructuring phase for global companies in various sectors, such as software (SAP) and aviation (Lufthansa), seems to be in full swing as they navigate through the complexities of executive transitions and aim to maintain their competitive edge in the industry.
