Corporate Governance In Germany Research Articles

Environmental and Social Concerns of Stakeholders and Corporate Governance in Germany

This study explores the overall effects of corporate governance practices and features of board effectiveness on the environmental and social (ES) concerns of stakeholders in Germany. The research presents ES concerns through ES indices. The study uses the data of listed firms in Germany for the period 2004-2017. The study finds that overall measurement of corporate governance in firms in Germany decreases the ES concerns of stakeholders. However, when various features of corporate boards are used as measures of corporate governance, it finds that if the chairman is an ex-CEO, there are significantly higher ES concerns for stakeholders in Germany.

Evolution of German corporate governance (1995-2014): an empirical analysis

PurposeThis paper aims to address the evolution of corporate governance in Germany with a particular regard to whether there can be observed a gradual convergence to a shareholder primacy corporate governance system.Design/methodology/approachTo investigate a potential shift of the German corporate governance system to an Anglo-American tiled corporate governance system, the authors have empirically assessed on a polynomial base 52 separate company and corporate governance variables for 20 years (1995-2014).FindingsThis research suggests that a gradual convergence has taken place prior to the global financial crisis. However, the results suggest that the convergence process experienced a slowdown in the aftermath of the global financial crisis, which may be linked to the stability of the German corporate governance system during the global financial crisis and the political environment during this time.Originality/valueThis paper contributes to the research by not only analysing the development of the German corporate governance system but also identifying new reasons for this development and explaining why a new convergence process may be observed in the future again.

Corporate Governance in Germany: Recent Developments and Challenges

The traditional German corporate governance system has developed against the background of a pay-as-you-go pension system and the consensus-oriented German culture. The system that emerged was characterized by influential banks and bank loans being the main source of outside financing for the corporate sector. However, as the economic and regulatory environment changed over the last 25 years, the corporate sector shifted towards more equity financing, and more generally towards more market-oriented sources of finance. Simultaneously, the banking sector saw major transformations and Germany enacted a series of regulatory initiatives to modernize its corporate governance. As a result, the German corporate governance system developed notably with international and minority shareholder gaining influence at the expense of banks and other insiders. While this development – which is strongly influenced by the Anglo-American governance ideal, but does not simply adopt a market-oriented blueprint – is still ongoing, several open issues with room for improvement remain.

Acceptance of Corporate Governance in Germany and Austria

Acceptance of Corporate Governance in Germany and Austria

Persistence in Corporate Networks

We examine the bipartite graphs of German corporate boards in 1993, 1999 and 2005, and identify cores of directors who are highly central in the entire network while being densely connected among themselves. The novel feature of this paper is the focus on the dynamics of these networks. Germany's corporate governance has experienced significant changes during this time, and there is substantial turnover in the identity of core members, yet we observe the persistent presence of a network core, which is even robust to changes in the tail distribution of multiple board memberships. Anecdotal evidence suggests that core persistence originates from the board appointment decisions of largely capitalized corporations.

Revisiting the prescription of corporate governance standards: a panacea for big players and SMEs in the German financial industry alike?

Bad corporate governance has been criticised as one reason for the failure of financial companies in the current crisis. Nevertheless, this discussion almost exclusively referred to big players so far. Our paper investigates and compares both, big players as well as SMEs in the German financial sector. We find remarkable differences between the two sub-samples concerning compliance with German corporate governance standards. Furthermore, considering the impact of compliance with German corporate governance standards on performance, we surprisingly do not find differences between both groups with respect to total shareholder return, but big companies with high compliance rates demonstrating a significantly impact on return on equity which we cannot find for SMEs. This opens a discussion whether the existing standards of ‘good’ corporate governance in Germany are even able to help SMEs to lower their agency costs.

Normierungseffekte der Co-Regulierung von Standards guter Corporate Governance / Normative effects of co-regulatory regimes of corporate governance

Zusammenfassung Der Deutsche Corporate Governance Kodex stellt eine Form der Co-Regulierung von Standards guter Unternehmensführung dar. Bisherige Studien haben gezeigt, dass der Kodex insgesamt eine sehr positive Resonanz erfährt. Allerdings enthält er auch einige Bestimmungen, die nicht von der überwiegenden Mehrheit der Unternehmen angewendet und daher als neuralgisch bezeichnet werden. In Längsschnittbetrachtungen lässt sich ermitteln, dass die Akzeptanz der Kodexstandards drei unterschiedlichen Verlaufsmustern folgt, da sie entweder von Beginn an große Zustimmung erhalten, im Zeitablauf ansteigende Akzeptanz erlangen oder vergleichsweise konstant eher nur geringe Akzeptanzwerte erreichen. In dem vorliegenden Beitrag werden die Verlaufsformen genauer erläutert und vor diesem Hintergrund die Normierungseffekte des Kodex eingehender diskutiert. Die Analyse ergibt, dass die Kodexstandards unterschiedlichen Normierungsansätzen entsprechen und der Erfolg der Kodexeinführung generell letztlich davon abhängt, dass die vom Kodex notwendigerweise belassenen Ermessensspielräume in der Unternehmenspraxis verantwortungsvoll ausgefüllt werden.

Does the well governed firm perform better? Regulatory implications for SMEs in the financial sector

Although bad corporate governance has been identified as one reason for the failure of financial companies in the current financial crisis, the discussion almost exclusively refers to big players so far. This paper therefore investigates SMEs in the financial sector. Against theoretical assumptions and previous findings for big companies, in regressions for 21 SMEs in the German financial sector we find compliance with the German Corporate Governance Code (as a proxy for “good” corporate governance) not to affect performance significantly positively. This opens the discussion whether the existing rules of “good” corporate governance in Germany do also fit to SMEs and which actions have to be taken into consideration by politics, financial authorities and regulators to solve the situation.

Heroes, villains and ‘honourable merchants’: narrative change in the German media discourse on corporate governance

Drawing on data from recent media discourse about corporate governance in Germany, this article primarily seeks to explore the changing nature of narratives in the mass media about both organizations and their managers. Based on Greimas’ narrative approach and his adaptation of Propp’s morphology of the folktale, the article reconstructs two different narratives of corporate governance and the transformation process between them. To improve our understanding of narrative change, we extend the Greimasian approach in two respects. First, we highlight the two-way relationship between narrative change and the wider economic context. Second, we point to structural conditions of the narrative(s) in relation to narrative change and identify typical semantic figures as indicators of change.

Corporate Governance and Current Regulation in the German Banking Sector: An Overview and Assessment

This paper gives an overview over corporate governance and banking regulation in Germany. Particular attention is put on legal and regulatory changes that were made in response to the financial market crisis. The paper shows that the changes mainly focus on the remuneration of managers and on further professionalizing the supervisory board. Problematic is that several laws that were enacted in the past years to improve corporate governance focus on listed firms. Furthermore, some of the recommendations and suggestions made to improve corporate governance in Germany are not legally binding even for stock corporations. Recent empirical evidence, moreover, suggests that bank shareholders pushed for greater risk-taking and not managers. This contrast with public view that the bank managers are pushed by aggressive remunerations schemes to increase risk-taking and indicates that the recent legal and regulatory changes fail to remove all weaknesses of the German corporate governance system.

Corporate Governance in Germany – The Big Leap

Corporate Governance in Germany – The Big Leap

Germany's Corporate Governance Reforms: Has the System Become Flexible Enough?

This article reviews Germany's corporate governance system and the effectiveness of recent reforms. Since the early 1990s far-reaching reforms have complemented the traditional stakeholder system with important elements of the shareholder system. Instead of taking a view on the superiority of either system, this article raises the important question whether these reforms created sufficient flexibility for the market to optimize its corporate governance structure within well established social and legal norms. It concludes that there is scope for enhancing flexibility in three core areas, relating to (i) internal control mechanisms, especially the flexibility of board structures; (ii) self-dealing; and (iii) external control, particularly take-over activity.

Measuring corporate governance in Germany: An integrated framework on compliance and transparency & disclosure

Compliance as well as transparency and voluntary corporate disclosure are essential within the concept of ´good` corporate governance. Consequently, there is an increasing demand for methods enabling investors to compare companies by means of country-specific criteria. However, measures in Germany do not provide a broad spectrum of criteria for evaluating corporate compliance and governance transparency & disclosure. Our framework covers all rules of the German Corporate Governance Code as well as additional criteria, enabling investors to analyse how companies are managed. Furthermore, we raise quality criteria of social sciences to confirm our findings.

Germany's Corporate Governance Reforms: Has the System Become Flexible Enough?

Germany's Corporate Governance Reforms: Has the System Become Flexible Enough?

Corporate governance in Germany

PurposeThe purpose of this paper is to provide an outline of German corporate governance.Design/methodology/approachThe history of the German Corporate Governance Code is highlighted. Then a short overview of the acceptance of the code by companies in practice is given which is based on an empirical survey. This is followed by the most recent changes as well as an overview of the developments of corporate governance in Europe. Finally, a summary of the current discussion of codetermination in terms of company management in Germany is provided.FindingsThis appraisal, accompanied by a high degree of approval of the code, shows that, on the one hand, its stipulations partly break with tradition and, on the other hand, have undergone frequent changes: in a period of four years, already four amendments have been made.Originality/valueThe paper offers insight into issues of corporate governance in Germany.

German corporate governance in transition: Implications of bank exit from monitoring and control

Close links between banks and large companies have been seen as a key component of Germany's corporate governance system. The recent sale of large shareholdings by banks raises the question of to what extent this system will converge to the US model of dispersed ownership. This paper argues that concentrated ownership will remain a key feature of this system. In addition, board-level representation of employees and the lack of a culture of independent directors are further factors supporting incremental change in Germany's corporate governance system rather than wholesale convergance to the US model.

Corporate governance and labour management: an international comparison

Preface 1. Corporate Governance and Labour Management: An International Comparison 2. Corporate Governance and Employees in the United States 3. Markets and Relationships: Finance, Governance, and Labour in the United Kingdom 4. Corporate Governance and Employees in Germany: Changing Linkages, Complementarities, and Tensions 5. Corporate Governance in Germany: Ownership, Codetermination, and Firm Performance in a Stakeholder Economy 6. Corporate Governance and Labour Management in the Netherlands: Getting the Best of Both Worlds? 7. Labour in French Corporate Governance: The Missing Link 8. Corporate Governance and Employment Relations: Spain in the Context of Western Europe 9. Corporate Governance and Industrial Relations in Italy 10. Corporate Governance, Labour, and Employment Relations in Japan: The Future of the Stakeholder Model? 11. Towards a Comparative Perspective on Corporate Governance and Labour Management: Enterprise Coalitions and National Trajectories

Corporate Governance in Germany and the German Corporate Governance Code

The term governance, and all that it implies, is now in everyday use in Germany. This is due to the enormous changes Germany has experienced in recent years, in international business, international finance and in German industrial structures. This contribution deals with recent changes in the German system of corporate governance. After a short historical review, the major elements of the international context that form the background for changes in Germany are discussed. This is followed by an explanation of the German Corporate Governance Code and its role, concluding with a prospectus for further possible developments and a summary of key points.

Corporate Governance and Company Law Reform: a German perspective

Corporate crises and international trends in corporate governance have revealed the need for reform, and resulted in a great number of changes in corporate law. In spite of this, the existing legal framework for corporate governance in Germany presents itself reluctant to major changes. The German approach to reform has focused on the improvement of corporate monitoring by the supervisory board. It neither questions the two-tier structure, nor does it reconsider the existing representation of shareholders or other stakeholders under the current form of co-determination. The German Corporate Governance Code represents a new instrument of soft law and its recommendations are likely argued to improve the work of the supervisory board by providing detailed guidelines for corporate decision-making that express a generally accepted standard of best practice.

Change of Governance in Historic Perspective: The German Experience

The shift from the liberal, laissez-faire attitude to the welfare state at the end of the 19th century was accompanied in Germany with an idealized notion of the state that has created a lasting and unfortunate legacy: the persistent and deeply ingrained present-day German belief in a perceived unlimited competence of the state, and a deeply ingrained skepticism against the market mechanism by the general public that has turned out to be the greatest single obstacle obstructing urgent reforms in 21st century Germany. Nevertheless, the financial overburdening of the modern welfare state has become increasingly visible, and it is confronted with the problem of a growing discrepancy between public expectations and its ability to act. Indicators of change are a large-scale privatization of public utilities and the beginning of a privatization of welfare arrangements. The political economy and corporate governance in Germany are characterized by a corporatist approach. This regime is generally classified as the standard example of an insider-controlled and stakeholder-oriented governance system as opposed to a modern capital-marked-based and outsider-controlled system. Various threads of this insider system have started to unravel, and certain elements typically associated with outsider systems seem to be increasing. The structural changes are accompanied by regulatory reforms that are inspired by a regulatory approach typical for a marketoriented governance model. The emphasis has been on the regulation of information: enhanced disclosure duties, stricter liability for insufficient or misleading information, and more efficient means of private enforcement of mandatory disclosure rules by damages suits.