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Europe's largest airline in the last 24 hours has gone through a series of self-inflicted turbulences that raise doubts about the quality of its governance. On Monday morning, the nominated new chairman of Lufthansa, a former chief executive officer of the company, unexpectedly announced that he would not be available for the task. One day ahead of the annual shareholder meeting, Wolfgang Mayrhuber, 66, seemed to cave in to pressure from international investors unhappy with his candidacy. Then, a few hours later, he changed his mind once again, and decided to run after all.
In the short term, his retreat from the retreat saves Lufthansa from a public embarrassment. The handover from departing chairman Jurgen Weber, 71, to Mr. Mayrhuber has been planned for more than a year. It would have been all but impossible to present another qualified candidate within a day.
From a broader perspective, however, the farce marks another governance low point in Germany. Right from the beginning, a number of strong arguments spoke against the appointment of Mr. Mayrhuber as Lufthansa's next chairman. As the company's chief executive from 2003 to 2010, he was responsible for many strategic decisions that still hobble the airline. He led Lufthansa in unfortunate acquisitions of ailing peers, failed to sort out the company's loss-making short-haul business, and neglected the modernization of its fleets.
Despite a cooling-off period of two years – in line with the German corporate governance codex – Mr. Mayrhuber is still deeply entrenched with a company he joined in 1970. He also has many other commitments. Among other duties, he is chairman of Infineon, a chip maker, and a member or the supervisory boards of car maker BMW and reinsurer Munich Re .
Those points were raised by institutional shareholders months ago. For too long, however, both Lufthansa and Mr. Mayrhuber refused to take them seriously. A recommendation of influential shareholders advisory body Institutional Shareholder Services not to vote for Mr. Mayrhuber seems to have taken the company and the candidate by surprise.
Such capacity for misjudgment is unsettling. Europe's largest airline is in the middle of a painful and controversial strategic turnaround. It needs strong, credible and decisive supervisors. Mr. Mayrhuber's bizarre flip-flopping, and eleventh-hour brinkmanship, confirm all the doubts that he would be right man for the job.