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 latest edition of German Board Newsletter 'Corporate-Governance-Forum: Information for Supervisory Board and Audit Committee members focuses on the topic “Accounting in times of financial crisis” and the resulting “Key questions for Supervisory Boards in the 2009/2010 financial reporting season”. Another closely related article is devoted to a current ruling by the Higher Regional Court of Frankfurt, which clearly demonstrates the relevance of forecasts in times of crisis.
The second area on which we are concentrating in this issue are two significant new requirements to be included in the management report through the German Modernization of Accounting Act: The description of the internal control and risk management systems and the corporate governance statement. A detailed article is devoted to each of these reporting requirements.
This issue also contains a practical guide to reading audit reports and a report on the result of an interesting study on the work of audit committees.
Global Corporate Governance Briefing
Deloitte's Global Corporate Governance Briefing is your quarterly review of the latest developments in corporate governance and boardrooms from around the world. This quarter we present updates from the United Kingdom, Germany, Australia, Canada and the U.S.
Survival or success ?
Directors' Alert: 10 issues for 2010
After more than a year of weak global economic performance and difficult business conditions, organizations around the world are looking optimistically to the future. This second annual edition of the Global Center’s Directors’ Alert describes 10 key issues for boardrooms to consider in the New Year.
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.
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Hot Topics
Government Commission on the German Corporate Governance Code Sets Agenda for 2010
According to its press release from February 11, 2010, the Government Commission plans to review the previous diversity recommendations for German supervisory boards in order to develop sustainable measures for increasing the proportion of women and international representatives on German supervisory boards. This initiative follows a development that has already taken place in other European countries; e.g. Norway and Spain have introduced minimum proportions for women on boards and France is currently discussing legislation to require 50% of all boards be composed of women. Other agenda items relate to preventing conflicts of interest on supervisory boards, improving the professionalism of supervisory boards through continuing education and the first report the Commission will submit to the Federal Government in autumn 2010.
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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.
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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.
German Corporate Governance Code has been amended
The German Corporate Governance Commission has amended its Code per June 18, 2009. In particular, the Commission has considered guidance with respect to compensation arrangements at listed companies as well as the issue of board of director diversity.
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.
Governance Podcast: Corporate Governance in Turbulent Times - A Global Perspective
Regulators and investors are paying closer attention to corporate governance in light of the economic downturn. In this new Deloitte Global Insights podcast, partners from the UK and the German firms look at some of the key issues facing boards and how they're responding in these uncertain times.
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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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.
Report on Code Compliance 2009
The Berlin Center of Corporate Governance has published its seventh study on the compliance of Germany's listed companies with the recommendations of the German Corporate Governance Code. The study shows compliance for each major German index and for each recommendation and suggestion of the Code.
> View Report (German only)
Heidrick & Struggles Corporate Governance Report 2009
This report provides an overview of how boards of directors across Germany and 12 other European countries are responding to the credit crisis. In particular, the report highlights the decreasing number of independent directors among German boards, to a level that is among the lowest in Western Europe.
Axia Award brochure
Survey results on corporate governance practices of mid-market family-owned companies in Germany.
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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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