Sabine Walter in conversation with ...

Ewald Stephan, Board of Directors of the Verka VK Kirchliche Vorsorge VVaG

Mr Stephan, what do you love about your job?

What I love about my job is that every day brings something new. I took my exams 43 years ago and have experienced almost no routine since then. Routine doesn't have to be bad, but it's not for me. I am a curious person and constantly looking for new impulses and fields of learning. This inner driver fits well with my task as a board member. After all, it's all about setting impulses, initiating something new, setting new directions, developing new ideas and business approaches. And as a member of the Verka Board, I also have the freedom to do this.

Another aspect I am passionate about is sustainability. When I joined Verka as a board member in 2009, I was finally able to shape sustainable entrepreneurial action. As a pioneer in the industry, we have successively implemented sustainability in investment and beyond. Today, 11 years later, we are considered a pioneer and, together with Allianz SE, can call ourselves ESG Leaders (ESG: Environment, Social, Governance) in Germany.

S.W.: What do you understand by sustainability?

There is no single definition of sustainability. Our understanding of which is based on the definition of the Brundtland Commission from 1987. It states: "Lasting (sustainable) development is development that meets the needs of the present without risking that future generations will not be able to meet their needs." This definition also coincides with the Kantian principle of responsibility. This means, that my actions today must not restrict future generations in their ability to develop. The issues we consider in this context range from the preservation of creation, i.e. the preservation of humanity, biodiversity and nature, to many social issues such as equality, fair wages, just working conditions, the fight against poverty, to intergenerational justice, i.e. also the level of our national debt - a topical issue in this Corona crisis.

SW: What does this definition of sustainability mean for Verka's business model?

As a church investor, we are committed to Christian ethical values. And we are also true to these values in our investments. This means that we align our investments with aspects such as social compatibility, ecology and intergenerational justice. 

In other words, we do not invest in companies that do not comply with these values and aspects because, for example, they violate human rights, pollute the environment, produce armaments or use animal testing for cosmetic purposes. Similarly, we do not invest in countries that, for example, disregard applicable climate protection standards, where corruption is rampant, human rights are trampled underfoot or the death penalty is practised. The general principle is that we do not want to participate in profits whose foundations are ethically and morally unacceptable. Rather, we want to be invested where ESG criteria are held to a particularly high standard or accompany companies that are making recognisable and demonstrable efforts to develop towards this as part of a transition.  

SW: When did sustainability become your hobbyhorse?

I am often asked this question. I grew up in a Christian home and developed an awareness early on that many actors in our society are not aware of their responsibility or do not live up to it, and in some cases do not want to.

Actors who, in my view, not only have the responsibility but also the power to help shape our society and develop it in a positive sense are investors. Investors, and that includes Verka, can decide who they give money to, what they give money to, and what is done with that money. However, the scope of responsibility is often thought of too narrowly, especially among investors. They often only feel obliged to generate the highest possible return. But the return is only one aspect of corporate responsibility. For us as a society, the much more important question in the long run is: "With what do we make money? And not, how do we make as much money as possible?" We investors have a very great influence on the boards of listed companies. And we are called upon to exercise this influence for the benefit of a sustainable society.

SW: What is the biggest challenge here?

Not to let up, to always stay on the ball. You don't act sustainably at the push of a button. It is a process, a self-image that has to develop. Although sustainability aspects are playing an increasingly important role in the regulation of banks and insurance companies, many companies do not push the issue out of inner conviction. Changing this inner conviction will also be the subject of my future work. Due to my age, I will leave Verka in the spring, but I don't feel mature enough for retirement yet.

SW: From your point of view, what are the biggest levers to change this inner conviction?

Values. Many companies are not aware of their values or have not operationalised their values. Let's assume that a company has defined the value "trust" for itself. Then it is not enough to write it down. No, it is a matter of aligning corporate action with it: "What does the value of trust mean for us as a company?" "What does it mean for our leadership or for the way we develop employees?" "What does this value mean for the way we deal with customers and business partners?" "What does it mean for our products, services or business models?"

My future goal is, on the one hand, to create a value consciousness in the companies I want to advise and to transfer this consciousness into business activities. On the other hand, I want to dispel the misconception that sustainability costs returns. That is not the case. We as Verka have proven that.

SW: When was the desire born to pursue this career path and possibly also to take on responsibility for a company as a board member?

I studied business administration and after graduating I started working for Colonia Versicherung in Cologne. When I had to deal with board members in my job at that time, I had the thought: "Oh, you could do that too! This thought lasted until a department head once told me: "You don't have the calibre to be a board member. If you want to be a board member, you have to behave like one." Somehow I seem to have managed that (laughs).

What parallels are there to what we do, personality and organisational development?

Actually, we both do the same thing. You support people and help organisations to develop. And we board members do that in our company, Verka. Let me give you an example: The managers you have met with us, Ms Walter, are different from those who were there in 2009 when I joined the company as a board member. In part, they are indeed different people. But in many cases, the people from back then have developed significantly. For my colleague on the Executive Board, Mr Remmert, and for me, it was very clear at that time that we needed personalities with different skills and qualifications at our first management level than those we found at that time. So we put our trust in the managers, specifically promoted and developed them - and thus the organisation. And that is exactly what you, dear Ms Walter, are doing. That is why we complement each other so well.

S.W.: How has the understanding of "leadership" changed in the course of your professional career?

In the past, it was more about methods and tools. Today, it is much more about the attitude with which one leads, about the values that shape leadership behaviour. It is about trust, it is about purpose. Why do we do what we do? What do we stand for? How do we want to deal with each other?

I would say we care much more about cultural issues in leadership today than we did in the past: "What does our culture of trust look like? What characterises our culture of dispute? What kind of decision-making culture do we want to live in the company?" These and other questions have gained presence in organisations.

Another aspect that has changed over the years from my point of view is the integration of entrepreneurship into companies. Away from being a puppet to actively shaping things and the responsibility that goes with it. Being an entrepreneur in the company as a manager has only come about in the last 10-15 years. And in order to be able to live out this entrepreneurial responsibility, trust is needed, it requires decision-making competence and, above all, backing.

I can still remember my very first boss very well. He always had my back, even when things weren't going well. That shaped me and my later leadership behaviour.

When do you get the best ideas?

Not at work. More like sport, exercise in the fresh air. I put it down to the fact that the brain is better supplied with blood during physical activity. Even things that I have forgotten come back to me during exercise. 

Otherwise when I'm brushing my teeth, shaving or talking to my wife. Only at night, I have no ideas, I sleep soundly.

What will your profession look like in 2050?

A major challenge that our industry is already facing and will certainly have to continue to face is the low interest rates. We have to earn guaranteed interest. With the low interest rate policy, this is increasingly becoming a business risk, as the liquidation of the first pension funds shows. If this policy continues for another 5-10 years, even more pension funds will be liquidated. 

In addition, company pension schemes are unfortunately also becoming less important. Many companies no longer offer occupational pension schemes to their employees. So we are not only struggling with low interest rates, but also with a collapsing demand. This shows that our industry urgently needs new ideas to survive.    

S.W.: What will drive you personally in the coming years?

Furthermore, sustainability - it is essential for the survival of humanity. I am convinced that there are many opportunities in sustainability. I described that earlier. And I would like to contribute to these opportunities being seen and used.

Sustainable action has the potential to become a competitive advantage for companies. I want to help more and more managers realise this. Such a development could also be supported by incorporating sustainability aspects into the remuneration regulations of executive boards, supervisory boards and managers, so that sustainable entrepreneurial action also has a personal incentive for those who significantly shape the direction of a company.

S.W.: When you look back on your professional life, what would you do again in exactly the same way? What would you change?

Maybe I would start my professional career differently. At the time, I had the opportunity to go to New York and Singapore as a trainee after graduation. Unfortunately, I didn't take that chance. I would do that differently today. But that is a small aspect.

When I look at my professional life as a whole, I am very satisfied and would not change anything. And that, although I originally wanted to study medicine. But I had just missed the NC at the time and didn't want to somehow bridge the 5-6 year waiting period, so I I studied business administration and also trained as an emergency medical technician and paramedic. I drove ambulances and emergency ambulances in Cologne on a voluntary basis for 25 years. and was thus also able to live out my passion for medicine.

In addition, volunteering has helped me to keep my feet on the ground and know where I come from throughout all my years in management. And it taught me something else: Gratitude. Gratitude for how well I and my family are doing. At the same time, it has also made me humbled and sharpened my awareness of the responsibility I bear as a company boss, as an investor and as a human being in this society.

Ewald Stephan studied business administration and has been a member of the Board of Directors since 2009. Verka VK Kirchliche Versorgung VVaG in Berlin. The company was founded in 1924 as a special insurer for church and diaconal employees. With solutions and products for occupational pension provision and capital investment, Verka manages around 2 billion euros. The company belongs to the Entrepreneurs For Future initiative and consistently aligns its entrepreneurial actions with Christian ethical values