Siemens AG's current staggered structure of the Supervisory Board raises significant concerns regarding shareholder rights aspect of corporate governance. Best practice dictates that shareholders should have the ability to vote on directors’ appointments annually, ensuring accountability and transparency. However, at Siemens, board members serve four-year terms with elections occurring at different intervals, limiting shareholder influence over board composition and manifestation of individual director accountability .
Empirical research suggests that staggered boards are associated with lower firm value, highlighting the need for greater accountability. While stability has been cited as a justification for the current structure, true stability is achieved when shareholders actively support board members through regular elections. A more effective governance model would stipulate for annual director votes while maintaining board effectiveness.
To promote stronger corporate governance, the Supervisory Board is urged to consider transitioning to annual director elections.
To escalate our concerns, a formal statement was delivered at the Siemens AG AGM. Read the full statement.