Where is diversity at SAP during the Covid-19 crisis?

By Dirk Schiereck *

(exechange) — May 1, 2020 — The decision of SAP SE to appoint Christian Klein as sole CEO and the resignation of Jennifer Morgan leaves the company not only with a less diversified executive team with respect to gender but also in terms of internationality.

Because many institutional investors already consider environmental, social, and governance (ESG) criteria in their investments, including the governance element of diversity, SAP’s decision, which was taken in the midst of the Covid-19 crisis, can be interpreted as more than just a loss of cultural competence.

International diversity is becoming increasingly important as business activities extend far beyond national borders, making diversity a critical risk factor.

How are German small and medium-sized enterprises (SMEs) prepared for this risk?

We analyzed 1,560 top managers to answer this question. (1)

Based on an internationalization index, our results show that international diversity in management and supervisory boards of MDAX companies is even lower than that of DAX-30 companies.

Less than 10% of MDAX companies publish concrete quotas on international diversity, which is reflected by many criteria, such as a high ratio of foreign turnover or nationality of executives.

Remarkably, the correlation between companies that pursue extensive activities abroad and international diversity among their top managers barely exists.

(1) Historei Bariz / Dan-Zhen Zhou / Dirk Schiereck: Internationale Diversität im Topmanagement deutscher Mittelständler — Aktuelle empirische Evidenz für Unternehmen des MDAX. Working Paper, TU Darmstadt.

* The writer is a professor of Corporate Finance at the Technische Universität Darmstadt.

Editor’s note: This is a guest post.