LONDON (Reuters Breakingviews) - Daimler is doing its best to reverse out of a tight corner as it switches chief executives. The risk is that its well-intentioned manoeuvre will leave the new boss driving without a steering wheel.
The 58-billion-euro maker of Mercedes-Benz cars said on Wednesday that Dieter Zetsche would leave in 2019 as head of the management board, a role that is roughly equivalent to chief executive. By then, he’ll have been in the role for more than 13 years. Swede Ola Kaellenius, who is currently head of group research and responsible for development at Mercedes-Benz, will step into Zetsche’s shoes and become the first non-German to head the emblematic carmaker. After a two-year hiatus, Zetsche will return as chairman of the supervisory board – if shareholders approve in 2021.
There’s logic behind all this. Germany’s corporate-governance code stipulates a two-year cooling-off period for members of the management board that join the supervisory board. That’s to ensure they have sufficient distance from management to hold them to account. Chemical giant BASF said last year its boss was stepping down earlier than expected to pave the way for him to rejoin as chairman in 2020, and gas group Linde pulled a similar trick.
The question is whether Kaellenius and Manfred Bischoff, the current chairman of the supervisory board, have the requisite authority to run Daimler with Zetsche waiting in the wings. True, the company has a clear strategy that includes investing in electric vehicles and legally separating its valuable trucks business. But a lot can happen in two years. Management may be left second-guessing what long-time boss Zetsche would do while Daimler grapples with structural changes such as ride-hailing, electric cars and autonomous driving.
There’s a way out. Daimler could override the requirement of two years of time away if 25 percent of shareholders give their assent. The Stuttgart-based group may be worried that investors could kick up a stink, or it’s chosen to stick to governance principles for their own sake. Either way, it risks muddying decision-making at a time when carmakers most need clear leadership. Autonomous vehicles are the hot new driving fad; self-driving companies are as yet untested.
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