Jeroen Drost: ‘An Extensive Legislative does not Automatically Produce Superior Supervisors’

Let us reflect briefly on your career, starting in 2008. You became the CEO of NIBC, a corporate bank in The Hague, at a time when the Netherlands was hit by the financial crisis. How did you experience that period?
‘It was a bit like the early days of the COVID pandemic when, at the time, no one knew what to expect. When the financial crisis hit, trust in the banking sector evaporated. Even the major banks would only lend each other sums of up to twenty million, which was almost nothing. We were constantly under scrutiny. Every morning, you would open the paper to see who next was in trouble and whether we ourselves had any negative exposure. It was a tense time, especially for a smaller bank that was not considered systemically important.
We had no illusions that anyone would step in if we failed. It also was a sobering experience, as we knew we had to solve our own problems. We did this partly by selling off portfolios, because to be honest, the bank had become overinflated. In short, it was a hectic time, but we were proud to have pulled through. When I left in 2014, I initially thought I was done with executive roles, I wanted to focus on independent consulting and supervision. But I soon changed my mind about that. I realized I still wanted to hold the reins myself.’ 

You then became CEO of NPM Capital in 2015, SHV’s investment arm, to become CEO of SHV Holdings a year later. What was it like to be the first complete outsider to lead this family business?
‘I felt at home at NPM from day one, so I knew I would be comfortable at SHV too. That was important because a family business has a strong history, culture, and purpose. Those things do not change easily, so as CEO, you need to see yourself as a steward for a specific period, passing the baton to someone else when your time is up. This sense of stewardship is much stronger in family businesses than elsewhere. Coming completely from outside, whether that suits you is difficult to judge in advance.'

At SHV, you were confronted with a bribery scandal at five subsidiaries, which eventually led to a settlement with the Public Prosecutor's Department. Did a changing societal view of how strictly regulations should be applied play a role in the fact that the prosecution proceeded?
‘I do not see it that way. What happened at SHV should never have occurred. It does not align with the company, which is why we ourselves reported the irregularities in 2016. I fully support the prosecutor’s active involvement in such cases. No one benefits from these kinds of practices.’

You stepped down from SHV in April 2024 after eight years. Why was this the right time?
‘I think it is very difficult to stay on top of your game as a CEO for more than eight years. Whether you like it or not, at some point, the people around you start to know you well, and they think they know what you do or do not want to hear. You also get set in certain habits, such as the way you look at issues and how you prepare. The organization adapts to those habits. Of course, you try to counter that. When I organized discussions with the executive board about everyone’s role and performance, I preferred bringing in an external facilitator. That way, I could discuss my own role as a team member instead of as the CEO. But in the end, those unintended patterns creep in. It is only human. Therefore, I would consider it very healthy to limit the statutory term for directors to two periods of four years. Of course, there are examples of CEOs who have done a fantastic job over a long period and have managed to continually reinvent themselves. I have great respect for that, but eight years is enough for me. I found it incredibly interesting up until the last second and look back on it with great pleasure, but it is good for someone else to bring a fresh perspective to the company now.’

What experience as an executive director do you bring to your supervisory board positions?
‘It is an advantage to know how the game is played from both sides of the table. Supervision can be quite complex and sometimes frustrating because you always have less information than management. To avoid difficult conversations, management must be transparent and ensure that this sense of frustration does not arise. Plus, you have a duty to actively provide the supervisory board with the relevant information. At the same time, I can understand why an executive board might not want to share everything immediately, not as to hide anything, but because of timing. They do not always want to discuss everything with the supervisory board right away, as they often cannot foresee how a situation will play out or what exactly is going to happen.’

At NPM, it was customary for a major shareholder to be represented on the supervisory board of private equity companies. Did that change the role of the supervisory board?
‘Even as shareholder representative, a member of the supervisory board should serve the interests of the company and has an obligation to consider the interests of all stakeholders. At NPM, we therefore separated the supervisory board role from the private equity role. The supervisory board member was never the one handling the financial dialogue with the portfolio company on our behalf. That kept things clean. To me the main advantage of having your 'own' supervisory board member is that it enables you to build a supervisory board that, in terms of expertise, fits the stage the company is in. It does not necessarily have to be someone from within the private equity company's own ranks. If you are in the baking business, for instance, you could bring in someone from the food and production industry who is familiar with and knowledgeable about nutrition and manufacturing. If you are doing business in emerging markets, it is helpful to have someone with that specific expertise, so you can better assess whether a board is making the right decisions. Incidentally, I think every supervisory board should reflect the key knowledge and expertise that the company needs at a given moment. Depending on the composition and expertise of management, this can of course also change.’

The role of large companies in society is increasingly under scrutiny. The FNV (Federation of Dutch Trade Unions), which recently withdrew from the Corporate Governance Code Monitoring Committee, advocates that executive directors should be held personally liable if they fail to meet stricter CSR rules. In your view, how should the concept of corporate social responsibility take shape?
‘The consideration of legislation that is now in progress suggests that executive directors and supervisory board members do not act with the intention of society’s best interest. But that is not true, and it cannot be, because without it, you do not have a sustainable business model. I do not need a code or legislation to know that a company should play a certain role in society. I see that as a given and I am convinced that almost all executive directors and supervisory board members have the right intentions. Of course, mistakes will be made, but holding well-intentioned people personally accountable does not help. It would mean there is no relationship. I do not become a better person because there is a potential enormous penalty hanging over my head if, say, cybersecurity is not perfect. I might even become overly cautious and protective, just to avoid the risk of a huge personal liability associated with my career. I am not saying that no one would want to be a supervisory board member if things developed this far, but it certainly does not create superior supervisors.
Moreover, there is another dimension to the discussion on corporate social responsibility namely the international playing field. Most companies where I serve as supervisor operate globally. If 80 percent of the business is not in the Netherlands but, for example, in the U.S. or China, we need to be able to compete there. Of course, we must do this within the norms and values we hold here, but that is why we should not over-regulate. In the U.S., salaries are simply higher than here. If we want to hire someone there, we cannot be restricted by the Dutch rules on renumeration. We need to accept that it simply does not work that way. In short, there is a tension between having a sustainable business model, the increasing legal framework and an international playing field in which companies compete. That makes it challenging, but it is part of the game.’

The perception of what is considered socially responsible seems subjective. We view ethical business practices very differently now than we did before the financial crisis. The framework for these standards is well embedded in regulations which have influenced corporate thinking.
‘It is very easy to look back fifteen years and hold today's yardstick against it. Since then, there has certainly been a development in norms and values. People are chosen for a management position today partly because they meet what we now consider socially responsible standards. From then on, this is monitored by the supervisory board and by the legal framework. That is, in fact, quite well organized, but in practice, there is tremendous focus on the small minority who act for personal gain alone. I am not convinced that more regulations, rules, and obligations will effectively address those excesses. It mainly provides a false sense of security. It is more a matter of enforcement.  If companies and executive directors cross the lines, there are laws and they can be prosecuted.’

As a CEO, you have experienced several crises. Among other things, you are now supervisor at Ebusco, the manufacturer of electric city and regional buses, which is in crisis because, among other things, transport company Qbuzz could, following a court ruling, cancel an order for 45 electric buses. Did you see this coming? And how does such a crisis affect a supervisory Board?
‘I cannot and will not say too much about it, but no, we did not see it coming. That has everything to do with the fact that Ebusco is a very young company, without the established structures and experience of established companies. Moreover, the company has grown rapidly in a new market. When something grows quickly, problems can also surface quickly, with an immense impact on the short-term. More generally, a crisis is not fun, but if there is good teamwork between management and the supervisory board, and you maintain good personal relationships despite heated and sometimes blunt discussions, you can get through it. In that sense, it is an extreme test.
In my roughly 40-year career, this is my tenth crisis. Some crises are more persistent and linger longer, but they all pass, and new ones will inevitably come. All you can do is prepare as well as possible for potential scenarios. Funnily enough, that is often hardest to do when things are going well. After all, it is a bit like having to think about a bad weather program on a bright summer day at the beach, and yet that is exactly when you need to do it.'

It has been six months since you left as CEO. Is there a common thread in how you build your current and future portfolio?
‘For me, my priority is that it should be challenging. That means I want to have an affinity with the market in which a company operates. I also look for variety between sectors and types of companies. With all the regulations, the annual cycles of large listed corporations have become quite similar. So, variety is refreshing. That is why I am a supervisor at a startup such as Ebusco, alongside my membership of supervisory boards at established companies such as Randstad and Signify. I recently also joined the advisory council of consulting firm Metyis, which has a completely different dynamic and experience due to its partnership structure. I enjoy that. It should not all be basically similar.’

This interview was published in Management Scope 01 2025.