Horizon Board: A New Body in the Stock Corporation?

published on 17 March 2025 | reading time approx. 3 minutes

Lately, there has been an increase in media articles covering a new (trend) body in stock corporations, the so-called Horizon Board. Abroad, Horizon Boards are already widespread, for example in the UK, Finland and India and have been successfully installed in companies in a wide range of industries. In Germany, on the other hand, the term is not necessarily well known.

One of the few German companies that has embraced the trend from abroad and implemented it is not a stock corporation, but a limited liability company, the UFA GmbH.

The implementation of a Horizon Board can be an interesting step for stock corporations in particular, also with regard to the opportunities that arise for institutional investors.

This article is intended to provide a first overview of the concept of Horizon Boards in stock corporations, explain the terminology and show motivations for its implementation (part 1), as well as the advantages of establishing them and the risks involved in setting them up (part 2).

Terminology: Horizon Board

A Horizon Board is an additional, voluntary body in companies that aims to capture the spirit and values of the younger generation and to give this generation the possibility to be heard on topics that are decided by the management, without the members of the Horizon Board being granted actual decision-making authority in the process.

As the term “horizon” indicates, companies hope that this additional body will broaden the existing horizon of the management and give more weight to topics that concern younger generations, such as the Millennials and GenZ. The desire to use these insights profitably for the company will always be associated with this. In addition to the term Horizon Board, the term Shadow Board is also sometimes used.

Typically, the agenda of Horizon Boards includes topics that are of great importance to younger generations, such as innovations in social media, modern working conditions, diversity, ESG or even digitalization. The greatest potential can thus be expected by companies in industries in which the advancement of the above-mentioned areas can directly lead to an increase in sales, but the company has so far invested little in these areas.

Examples

For example, a Horizon Board – in addition to the one mentioned at the beginning, which was installed at UFA GmbH, an RTL Group company – has been successfully implemented in the following companies:

Accor Group: the French hotel chain developed the new Jo & Joe brand, a mixture of hostel and hotel targeting young travelers.
Stora Enso: a Finnish paper and packaging company, used its Horizon Board to revise the allocation of work in the management.
GroupM India: the Indian company used its Horizon Board to implement a three-year digital and cultural transformation.
Shakespear Martineau: the British law firm established the Horizon Board to support future strategy planning.

Motivation

Establishing such a body is associated with a number of advantages.

The reasons for implementing a Horizon Board include the following aspects:

Increasing sales by identifying trends early: the Horizon Board can act as a kind of “think tank” in which trends are identified early and new ideas are developed;
Advancing innovation: by focusing on future trends and technologies, Horizon Boards can help develop and implement innovative ideas;
Employee retention: involving committed and creative employees in the decision-making process helps to retain them;
Improved image and competitive advantage in recruiting: companies become more attractive to younger employees, who are offered the opportunity to get involved right at the start of their careers, gain visibility at management level and be heard on the issues that matter to them;
Improved communication: regular exchanges between management and younger employees lead to increased trust and a more open communication;
Alternative to the works council: at a time when the number of works councils is declining and traditional co-determination may be less attractive for younger employees, a Horizons Board can become an alternative to the works council;
Early problem detection: involving a member of the management in the meetings of a Horizons Board helps to ensure that action can be taken quickly and remedies found when problems arise;
Increased attractiveness for institutional investors: since members of a Horizon Board have a role similar to that of observers and advisors and may be provided with information to which they would otherwise have no access, it may be particularly interesting for institutional investors to have a representative on the Horizon Board.

In addition to the opportunities for corporate innovation that arise from the motivation described above, stock corporations must observe the – quite rigid – legal framework of supervisory law when introducing and setting up Horizon Boards.

The possibilities for implementing a Horizon Board in stock corporations, in particular for institutional investors, but also the limitations and risks associated with implementation, are the subject of the second part of this article.