"What KÉSZ Csoport is now doing would be a significant benefit for most large Hungarian private companies"

In a conscious and forward-looking transformation, KÉSZ Csoport can become a large Western-style company.As a first step in its organisational transformation, launched under the name "New Era", the Supervisory Board will be taken over by renowned experts joining from outside, under the founding chairmanship of Mihály Varga. We spoke to András Kozma, Managing Director of Credit Management Group and Dale András Martin, President of the European University Association European Engineering Learning Innovation and Science Alliance (EELISA) and former CEO of Siemens Zrt., about the tasks ahead.

What path led you to the Supervisory Board?

Dale A. Martin: I worked for Siemens for thirty years, during which time I served as CEO of Siemens Zrt. from 2010 to 2021. Mr Mihály Varga, the founder of KÉSZ Csoport, was my first client at that time. He made an appointment with the previous director, but he ended up meeting me - and our good relationship has continued ever since. In an unrelated, other pleasant coincidence, Tamás Vida, CEO of KÉSZ Holding Zrt., and I worked together at Siemens in the 1990s, and here we can work together again.

András Kozma: I spent two decades in the financial sector. I worked in various banks and then I was CEO of Commerzbank for nine years. I met KÉSZ Csoport as a large corporation about 20 years ago. KÉSZ is inescapable just because of its size, so naturally a nexus developed between us even though I didn't have any clients at the time.

What motivated you to take on this task?

András Kozma: KÉSZ Csoport is not just a large construction company, and within that a technology-focused company, as it is present in several countries and operates in many sectors. Due to its size and complexity, the company has reached a maturity at which it is worthwhile to move to a more advanced corporate governance model, following the example of Western European examples. At this scale, it is very useful to have a management body with external members.

External members can bring diversity to the group's operations, as their own professional background and perspective on the company's operations from a different perspective than the insiders can have a positive impact on the whole group.

Dale A. Martin: I emphasize that an external perspective can add considerable value to internal operations. An outside actor who has seen other companies and other sectors and is not involved in operational tasks can see the forest for the trees better. This shift gives the ownership group the opportunity to look at the whole group from a broader perspective.

The new system will have a three-member supervisory board, Mr Mihály Varga is the founder of the group and we will work together.

Andras Kozma: My own motivation is that I see a lot of enterprise systems compared to which the move to KÉSZ Csoport is a big improvement and I am happy to follow it. I also have a personal relationship with Mr. Mihály Varga and I am keen to be part of the work that will make the group even more successful and internationally significant.

Dale A. Martin: I've seen the KÉSZ Csoport from the other side before. We were partners on some of the Siemens projects. It was a challenging collaboration, but a valuable one that established a long-lasting personal relationship and the trust that came from it. So when I was asked, I was happy to take on the task.

We know each other well with András Kozma, we worked together in the German-Hungarian Chamber of Industry. So it is a very positive coincidence that we know each other, because we approached each other independently. When we found out who the other party was, it definitely strengthened our commitment to the task.

András Kozma: Part of the reason for our work in the German Chamber is that we have an insight into the way large international companies operate. We both socialized and studied in large multinational organizations. And we have seen these ways of doing business many times, from many directions and adapted to different countries, from China to Slovakia.

How do you plan to operate the Supervisory Board?

András Kozma: The Supervisory Board will have a fixed working schedule with the aim of structuring and operating the governance of the company. We plan to have one committee meeting every month, with the three committee members present. In the course of our work, we will review the main systems and control points that determine the current operation. These will be the basis for the committee's findings. So our task is to look at the whole of the group's operations and identify where models that have been successful in other companies could be introduced or where other changes need to be made. And of course, if a model is successful in one division, there may be value in replicating it in other parts of the company.

Dale A. Martin: We implemented a new system on May 1. So we have to look at the current situation in the light of the fact that the work is just getting started. Our appointment is just one element of the organizational transformation that is being launched as a "New Era" that will change the way KÉSZ Csoport operates. What is valuable is that this change did not happen overnight, and that the joint reflection on the restructuring of the structure started several years ago.

András Kozma: Important for KÉSZ Csoport, but also true for Hungarian corporate structures in general, is that for historical reasons, corporate evolution started at the same time in almost all companies and the ownership circle that built the company is typically very strong. This indicates both the depth and the unidirectionality of corporate governance experience.

Businesses have grown dynamically, as KÉSZ Csoport has grown enormously, so in many ways they are now adapting ways of working that are now commonplace in the West. KÉSZ Csoport's current move is ahead of Hungarian companies, so the company is innovative in this respect too.

Dale A. Martin: A construction company has grown into a diversified group with significant in-house resources in many sectors. With this transformation, KÉSZ Csoport is in many ways leading an evolutionary journey that could be an example for other Hungarian private companies. Why is it important to involve external members?

András Kozma: An entrepreneur who started in the 1980s and succeeded in his work could grow into a large company. Such companies are typically owned by one owner or one family, where it is natural to carry on the model that has worked for 20 years. However, there is great potential for growth through a structural change.

For most Hungarian companies, there is great potential in developing an entrepreneurial attitude into a corporate one. The difference between an enterprise and a company is in the principles. One can have a successful business, but the real development is if one can build a company out of it, institutionalise it.

Dale A. Martin: This can be particularly important in a generational transition, because a company is much less dependent on a person than a business, so it is a particular virtue that Mihály Varga, as founding owner, made this transition in a conscious, timely and innovative way.

Is there a value that you want to emphasise in your Commission work?

Dale A. Martin: Structuring, which can significantly strengthen the group in the medium term, because a company that started more than forty years ago from a one-man competence can rarely successfully transition to a corporate operation.

András Kozma: I was socialized in international finance, so I feel it's a bit of my responsibility to focus on the financial market and risk management side of our operations. From this point of view, what KÉSZ Csoport is now doing would be a great advantage for most Hungarian companies.