Literature Review Women on boards and in TMTS and firm performance94 at that time and the TecDAX formerly also na med the SolarDAX over time however it beco mes apparent that CONERGY s crisis emerged one year before the start of the industry s downturn CONERGY started to stumble at a time when the vast majority of solar companies was at its height I argue that CONERGY s failure is hence not to be causally attributed to the overall negative develop ment in the renewable energy sector but rather to serious failures on the part of the management Managerial over optimism and overconfidence might partly explain the Group s rapid rise as well as its sharp fall Since overconfidence is dynamic it is likely that overconfidence further increased along with the company s success enabled th rough the state funded industry boom Moreover the supervisory board with Dieter Ammer as its Chairman failed in its duty to monitor and control the CEO s actions Ammer was Rueter s uncle and also co founder of Conergy AG It appears that it lacked the necessary distance and that Ammer vi olated his duty of due care and diligence 4 4 Data and methodology The sample of the present case study consists of only one CEO and one company and is thus not representative Methods for measuring overcon fidence designed for large samples are inappro priate in a case study Hence I concentrate on content analyses of a wide range of documents I focus on the investigation period January 1 2002 to December 31 2007 2002 marks the beginning of the impressive rise of CONERGY AG whereas 2006 and 2007 were the years of its steep fall Moreover Rueter resigned from his post as CEO in November 2007 I examine press coverage on CONERGY following Malmendier et al 2007 to evaluate if CEO Rue ter is portrayed as being optimistic and confident an or US producers and thus soon found a strong demand As a consequence PV system prices fell quickly and steeply given unchanged feed in ta riffs investors internal rates of return IRR in creased inversely proportional To counteract this development the German government decided to lower the feed in tariffs drastically within a very short time in order to adjust for the deterioration in prices Moreover the upcoming coalition bet ween the parties CDU CSU and FDP promoted the idea of extending the life of German nuclear po wer plants The new amendment of the Renewa ble Energies Act passed in 2011 and effective in 2012 was clearly to the detriment of German pro ducers as it increased price pressure still further Moreover Germany had been the largest PV mar ket worldwide up to that time Thus most of the German established players amongst them for mer top stocks such as Q Cells or Centrotherm were displaced from the market and eventually experienced insolvency14 The German photovol taics industry collapsed during 2012 with only very few players remaining amongst them SMA Solar Technology or Solarworld Similarly CONERGY had once profited considerably from the boom in the photovoltaics sector Its share price had risen up to EUR 173 41 with a target price of EUR 250 on May 15 2006 being a top pick albeit label led high risk Citigroup Equity Research 2006 May 15 After a 1 3 stock split in June 2006 the stock price stood at EUR 45 70 at the end of 2006 Dec 15 However the share price plummeted more than 80 percent within 18 months as a result of the company s crisis It did not move out of the penny stock range for several years until it filed for insolvency in July 2013 Comparing CONERGY s share price with the benchmark indices DAX subsector Renewable Energy consisting of numerous solar companies 14 Insolvencies of German solar technology companies 12 2011 Solon Solar Millennium 02 2012 Ralos Sun Concept 03 2012 Odersun Solar Hybrid Scheuten Solar Ger man subsidiaries 04 2012 Q Cells 05 2012 Sovello Inventux scn energy Pairan 06 2012 Solarwatt 07 2012 Centrotherm Global Solar Energy Deutschland CEO optimism and overconfidence

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 94
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