Board of Directors, Entrepreneurs and Business Mediation. Does that fit?

Interviews by Dr. Frauke Biester-Junker and Christoph Kaul with Thomas Borghardt (Board of Directors of the Hamburg Family Office Bank Marcard, Stein und Co) and Frank Dehnke (Chairman of the Board of Directors of Sparkasse Oberhessen)

Part 1 - "Board of directors, entrepreneurs and business mediation. Does it fit?"

Business mediation: Why are more and more entrepreneurs, board members, managing directors, executives and last but not least lawyers and consultants getting engaged with it? What is so convincing about the supposedly "esoteric discussion circle"?  Today - in the first part of this series - we talk about this together with two guests who know. We invite you to read along and feel free to send your comments and questions directly to the address below. 

Frauke Biester: "We would like to introduce to you: Mr. Thomas Borghardt, CEO of the Hamburg-based family office bank Marcard, Stein und Co, and Mr. Frank Dehnke, CEO of Sparkasse Oberhessen. 

Dear Thomas, dear Frank, we are very pleased to have the opportunity to talk to you about business mediation. As entrepreneurs and board members, how do you get into it in the first place?" 

Thomas Borghardt: "Very succinctly speaking: at first glance, my activity is about money, not only, but also. I see business mediation techniques as a core competence of a family office bank. We bear a special responsibility in advising and managing complex family assets across generations. In the process, different interests of the parties involved naturally arise again and again with regard to individual investments, but also up to family conflicts, which can ultimately also have an impact on the family assets. I want to and have to react appropriately to these situations and show our clients professional solutions."

Christoph Kaul: "That's an interesting point. What tools do you use to develop such solutions?"

Thomas Borghardt: "Well, first of all, our clients are mostly families and thus personally closely connected. At the same time, the economic, tax and legal contexts are demanding. This sometimes leads to challenging negotiation situations. My experience is that our clients shy away from a dispute in court. This is not only because of the costs involved, but above all because of the duration and the publicity and the resulting lack of confidentiality. As a result, court proceedings are regularly ruled out as an instrument for resolving conflicts. To find another, more suitable way of conflict avoidance or resolution in the interest of my clients is therefore my main motivation. Business mediation offers all of that."

Christoph Kaul: "Frank, how was it with you, how did you come to business mediation?"

Frank Dehnke: "In my case, there were very specific occasions in my previous professional environment as CEO of another savings bank. There we had considerable insurmountable differences and difficulties with three employees. I wanted to resolve these situations. Protracted court proceedings were not the right way to go, not only in terms of costs, but above all because of the prospects in terms of labor law. Vangard advised and accompanied us in these cases in terms of labor law. Frauke, you then showed me the possibilities of mediation. We then actually carried out three mediation processes and had a - I think you can say that exactly - very great success in all three cases."

Frauke Biester: "I agree with you, Frank. What exactly convinced you at the time to carry out the mediation procedures?"

Frank Dehnke: "In fact, up to that point, I had had no contact whatsoever with the subject of mediation. Your advice convinced me. You made it clear to me that a legal dispute in court would not be successful for our company. I was also preoccupied by the idea that a legal dispute would not solve the core problem, at least not completely. Of course, (long) court proceedings are financially lucrative for lawyers. Nevertheless, when you recommended that I do mediation, I was impressed. Then I said, that's what we're doing now."

Frauke Biester: "No question, sometimes labor court proceedings are really unavoidable. We lawyers pursue the best interests of our clients - and there are different ways to do this. One of them is business mediation. I have recommended this to you out of deep conviction. Not only because the cases were in fact legally unwinnable. But especially because we wanted to solve the specific problems sustainably and comprehensively through the mediation process - and were able to do so."

Christoph Kaul: "Court decisions often result in an "all-or-nothing" decision, one party wins, the other party loses. In a large number of cases, however, the client's basic problem is not solved, not even by success in court. Mediation has the great advantage over court decisions of offering tailored solutions, and ones that the parties work out themselves and thus have in their own hands."

Thomas Borghardt: "From my experience I can only confirm your findings. Our clients are always connected for life. In the case of disputes within a family, legal proceedings probably usually cause more new conflicts than they supposedly solve. The possible loss of face within the family is of great importance. In addition, there is the threat of economic collateral damage for all parties involved. To put it in a nutshell: Anyone who argues as a family in court for an entire year will certainly not be happy celebrating Christmas together at the end of the year. In this respect, it is essential for our customers that there are alternative conflict options to court proceedings."

Frank Dehnke: "I would like to take up this point, Thomas. As a savings bank, we don't want to go to court either, especially not with our employees. We would like to solve any problems as quickly, efficiently and openly as possible. In a mediation process, agreements are reached whose content has been developed by the parties themselves and not by an outside third party. It is not the judge who decides, but the conflict parties themselves. In my view, this is a particular strength of mediation. Simply conducting a mediation process also sends a clear signal to our workforce that they want to resolve conflicts together." 

Christoph Kaul: "Indeed, many court proceedings send a signal to the company and the workforce. In this respect, it is not "only" the specific parties who are affected by a legal dispute, but there are numerous interest groups who also observe these proceedings closely and draw conclusions from them - some of them negative - for future cooperation or their own conduct. Mediation also starts here. It is confidential."

Frauke Biester: "Practice shows it again and again: there is a whole suitcase full of instruments for managing companies and employees. The same applies to the consulting services of lawyers. The instrument should fit - and there is so much more than the contentious dispute. 

Dear Frank, dear Thomas, thank you very much for the first part of our exchange."

Part 2 of our interview will appear here shortly. In it, we will talk about the specifics and techniques of mediation and our experiences in practice. Already, we welcome feedback, questions and suggestions.

Please use the address wirtschaftsmediation@vangard.de to do so.