Welcome to the Centre for Corporate Governance
Corporate Governance in Germany is characterized by a number of unique features, chief among them being the requirement under the German Stock Corporation Law (AktG) that boards of directors are divided into two tiers: a management board (called the Vorstand) which is solely responsible for the management of the company, and a supervisory board (called the Aufsichtsrat), which is charged with overseeing the activity of the management board. German boards of directors are also unique in that, under the German 'Co-determination Law', supervisory board members of large companies (> 500 employees) are elected both by shareholders and by company employees: the employees elect one third or half of the board (depending on the size of the company). Neither shareholders nor employees elect members to the management board; instead, these members are appointed by the supervisory board. The German Corporate Governance Code (Codex) works on a 'comply or explain'-basis and aims at making the German Corporate Governance system more transparent and understandable.
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Corporate Governance Forum
Corporate governance newsletters
The 01/2012 issue of Deloitte’s Corporate Governance Forum is dedicated to the 2011/2012 balance sheet season. It also covers the key questions that Supervisory Boards may wish to ask as part of their audit activities, and offers practical hints for the analysis of the company’s economic situation. The results of the Deloitte survey “Tax audit - the menace of more tax” and their implications for the work of the Supervisory Board are also presented in this issue.
Marc Tüngler, Managing Director of Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (DSW), gives a preview of the possible main issues of the Annual General Meeting season. Other contributions discuss expected regulatory amendments regarding Corporate Governance, both at the European level and with respect to the German Corporate Governance Code, and point to possible topics on the Supervisory Board’s agenda for 2012.
The legally-inclined contributions discuss the possible liability risks of cash pooling in the de facto Group and the Supervisory Board’s monitoring obligations in the Group. In this issue, the look at the IFRSs falls on the possible accounting consequences of restructuring measures.
Corporate Governance Forum - Special Issue
On 30 November 2011, the EU Commission published legislative proposals for the regulation of the audit of annual accounts.
The draft severely restricts the decisionmaking powers of supervisory boards and shareholders regarding the appointment of auditors and would, in our view, have far-reaching consequences not only for the auditors, but also for the companies to be audited, and for the German economy as a whole.
This special issue of Corporate Governance Forum explains the proposals for the new regulation and their implications.
Director’s Alert: 12 Issues for 2012
When Uncertainty Reigns.
Governance specialists from Deloitte member firms around the globe (Asia, Middle East, Europe, and the Americas) provide insight into 12 boardroom priorities for 2012. Each article contribution includes questions that directors may ask to further explore the issues with their own boards, as well as related resources for each topic.
Impact of Corporate Governance on Share Prices
Deloitte together with the university of Duisburg-Essen carried out a survey on the impact of corporate governance on listed companies' share prices. The survey is based on data provided by 87 listed companies and 59 financial analysts. The study reveals a number of interesting results: For example, company representatives assume that they can appraise the effects of providing transparent information to financial analysts very well. However, financial analysts tend to estimate the effects of confidence-building measures to be more important than do company representatives.
> Download PDF (German only)
Hot Topics
Corporate Governance Code: Proposed changes in 2012
At its meeting held in Frankfurt on 17 January 2012 the Government Commission for the German Corporate Governance Code announced a proposal to confirm the Code recommendation in respect of the independence of supervisory board members.
Besides this amendment the Government Commission for the German Corporate Governance Code is planning among other things to redesignate as a recommendation the existing proposal that the chairman of the supervisory board should not also be chairman of the audit committee.
Furthermore, the Government Commission intends to change the recommendation for the remuneration structure of the supervisory board members. Thus where performance-based remuneration is also awarded in addition to a basic salary, the former will primarily be related to longterm company performance.
> View PDF (press release)
Qualification of Supervisory Boards
The Government Commission on the German Corporate Governance Code has again emphasised improving the professionalism of supervisory boards of listed companies as one of the main issues on its agenda in 2010. In their press release dated February 10, 2010, the Commission explains the importance and potential subjects of training for board members.
> View PDF
New rules regarding the appropriateness of Management Board Remuneration
The Act regarding the Appropriateness of Management Board Remuneration (VorstAG) came into force on August 5, 2009. It aims to address shortcomings regarding management board remuneration, which has been seen as one cause of the current financial and economic crisis. The following publication from the law firm Mayer Brown provides details on the new regulations.
Board Composition: Turning a Complex Issue into a Strategic Asset
In this briefing, Russell Reynolds Associates’ European CEO/Board Services team reviews the numerous factors affecting the composition of European supervisory boards and offers a model of director attributes to guide boards in refining their composition strategy.
Risk Intelligent Governance
A Practical Guide for Boards
This publication advises boards on their risk oversight responsibilities by providing six areas of focus and action-oriented steps, questions for management, and tools that may help the board implement improvements in each area.
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Director 360° Study
Changing roles, new challenges
This publication from the Deloitte Global Center for Corporate Governance offers a wide perspective on the views and concerns of boards around the world. Based on in-depth interviews with 215 directors at listed and private companies across 12 countries, this survey explores topical issues regarding board effectiveness, how boards are functioning, and the changing roles of directors.
Increasing Gender Diversity on Boards
Current Index of Formal Approaches
Globally, governments and businesses are discussing gender diversity on boards. This tool describes the different approaches countries have taken to increase women’s representation in the boardroom and summarizes the same key aspects of each approach, including:
• Legislation
• Regulation
• Voluntary Efforts
While the advantages and disadvantages of each method are open to debate, the general consensus is that gender diversity on boards is good for business. This tool gives readers, including board directors, corporate leaders, and policy makers, a straightforward way to make comparisons.
Women in the boardroom: a global perspective
The topic of boardroom diversity is long-standing. This second edition report from the Deloitte Global Center for Corporate Governance examines legislative efforts being pursued across 17 countries in order to encourage more women to serve on listed company boards.
European board diversity analysis 2010: Is it getting easier to find women on European boards?
This study issued by Egon Zehender International provides results from a survey of 340 of the largest companies across 17 European countries to see how many women are engaged in board work in Europe, what is the nature of their engagement – executive roles vs. non-executive roles, leadership roles on the board or within committees – and whether female participation on boards has increased or decreased over time. The research also looked at the backgrounds of directors in terms of international vs. local profiles. Data on 4,875 board positions and 5,052 committee positions was included in this research.
(Posted with permission from Egon Zehnder International, copyright 2010)
Board leadership: A global perspective
The research, covering Canada, Germany, France, the United Kingdom, and the United States, reveals small declines in split CEO/chairman roles in three of the five markets analyzed and a strong increase in independent chairs in the United States.
Stephen Davis, Executive Director at Yale University School of Management’s Millstein Center for Corporate Governance and Performance, and a regular contributor to corporate governance discussions throughout the world, provided views on the topic.
Dusseldorf Governance Forum
Deloitte together with the Millstein Center for Corporate Governance of the Yale School of Management held a conference in Düsseldorf, Germany, on May 18, 2009 entitled “Corporate Governance in Challenging Times: Past – Present – Future”. You can find the English language documentation of this event here.
Axia Award brochure
Survey results on corporate governance practices of mid-market family-owned companies in Germany.
> Download PDF (German only)
FEE Discussion Paper on Auditor’s role in Providing Assurance for Corporate Governance Statements
This discussion paper issued by The Federation of European Accountants (FEE) shows that despite a range of legal systems, institutional frameworks and traditions, there is considerable convergence across Europe in the issues addressed in national corporate governance codes. The paper considers the potential involvement of an independent auditor to increase the degree of confidence in corporate governance disclosure.
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