The link between supervisory board reporting and firm performance in Germany and Austria

Abstract

The present study examines the supervisory board reporting of listed corporations in the German and Austrian Prime Standard, especially with regard to the “assisting” role of the external auditor. The aim of this paper is to compare the similar two-tier systems in both European countries regarding their stock corporate law and their corporate governance codes. First, the descriptive analysis reveals specific reporting gaps in Germany and Austria. Thus, suggesting that the current German and Austrian accounting law reforms are crucial in order to increase the reporting quality in the future. The analysis of correlation in particular shows statistically significant positive correlations between the reporting on the independence of the supervisory board and the firm performance index (Price-Earnings-Ratio, Tobin’s Q) in both countries. Taken together, the determined correlations of all variables in question are to be classified as rather insignificant and their effects are quite inhomogeneous. Although several similarities can be found in the corporate governance systems of Germany and Austria, deviations exist with regard to the significance of the corporate governance reporting and firm performance.