In accordance with "§ 161 executive committee and supervisory board of a quoted society an explanation must deliver law on limited companies (AktG), to what extent they obey the German Corporate Governance Kodex (DCGK). This explanation is called corresponding explanation.

Developing history

Again this standard was inserted by transparency and publicity law (TransPuG) into the AktG, which discharged on 21 June 2002 of the Upper House of Parliament became and on 26 July 2002 into force stepped.

The enterprises concerned had to deliver their first corresponding explanation up to the year end 2002.

Regulation content

"§ 161 AktG forces societies to the delivery of a corresponding explanation. This explanation must be given durably accessible then to the shareholders and all other interested ones. This is usually done via publication on the homepage.

"§ 161 AktG release it the enterprises, whether they follow the regulations of the DCGK, or not. One differentiates between three kinds of the corresponding explanation:

• it is explained that the Kodex is as a whole accepted (so-called declaration of consent or assumption model)
• it is explained that the Kodex is as a whole rejected (so-called formal rejection or refusal model)
• it is explained that only parts of the Kodex are obeyed (so-called qualified discrepancy explanation or selection solution)

Contentwise the explanation must refer however only to the recommendations of the DCGK, not however to the suggestions.

The enterprises do not have to justify, why them the recommendations not to follow. Such a reason obligation was demanded first by the tree commission, was however not included then finally not into the final version "§ 161 AktG.

Background

With this standard the legislator on new ground went: There is no legal obligation to adhere to the DCGK. It must take place only an argument with its regulations. Such a kind of the regulation was taken over by the anglo American right area and is generally called softly Law.

To adhere not forced the enterprises legislative to the Kodex, on the contrary capital market the adherence to the Kodex is to be supervised and sanctioned if necessary with the pressure.

Unfortunately there are almost no legal sanctions of an incorrect or untrue corresponding explanation after at present valid right. Therefore often "§ 161 AktG as ineffective one regards.

Literature

Radke, Christoph: The corresponding explanation to the German Corporate Governance Kodex after "§ 161 AktG. Frankfurt A.M. 2004, ISBN 3631525567

Related links

• List of corresponding explanations of the enterprises listed in the DAX 30/MDAX
• Government commission3 of German Corporate Governance Kodex

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