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The German Corporate Governance Kodex (DCGK) is a set of rules, which contains above all behavior recommendations, which a good Corporate Governance, thus good management and - monitoring, constitutes.

Developing history

Corporate Governance is a topic in the last years ever the more at meaning won. Also the Federal Government was therefore concerned with this topic and in May 2000 a government commission3 "“Corporate Governance - management - enterprise control - modernization of the law governing share transactions"” under the presidency of the lawyer Professor Dr. Dr. h.c. Theodor of tree assigned. Among other things this commission has to develop recommended a "“code OF Best Practice"” for German enterprises. <p>

For this by the Federal Ministry of the law in September 2001 the "“government commission3 of German Corporate Governance Kodex"” was formed. This commission has on 26 February 2002 of the Federal Government from it compiled "“German Corporate Governance Kodex"” presented. The official of the Kodex in the electronic federal legal gazette took place on 30 August 2002. <p>

The Kodex is examined since then by the "“government commission3 of German Corporate Governance Kodex"” and is adapted last annually on 2 June 2005.

Objectives

The German Corporate Governance Kodex is to contribute to it, the rules for management, valid in Germany, and - monitoring both for national and for international investors transparency to make. With it in the long run the confidence is to be strengthened into the management of German societies and with it indirectly into the German capital market. The Kodex considers all in the past - particularly by international investors - expressed points of criticism at the German enterprise condition, for example unsatisfactory adjustment on interests of shareholder (see also shareholder VALUE), transparency lacking of German management or independence lacking of German supervisory boards. German Corporationen endeavors einhaltliche measures, which serve for the fulfilment of the DCGK.

Rank in the standard hierarchy

In shape of the rules of the Corporate Governance Kodex the German right got a new kind of standards, which is sometimes called softly Law. The Kodex does not have a law rank. It contains predominantly recommendations, whose obeying takes place voluntarily. <p>Allerdings the legislator lent beyond a pure signal effect reproduction to the principles laid down in the Kodex: in accordance with "§ 161 AktG executive committee and supervisory board of each quoted society must make a declaration annually, to what extent they used the recommendations of the Kodex (so-called corresponding explanation). <p>Somit obeying the principles affects the external representation of an enterprise and its relationship to the shareholders directly.

Government commission3 of German Corporate Governance Kodex

Belong to the government commission3 of German Corporate Governance Kodex:

  • Dr. Gerhard Cromme (chairman)
  • Dr. Paul Achleitner
  • Dr. Rolf E. Breuer
  • Dr. Hans Friedrich Gehlhausen
  • Ulrich stool
  • Max Dietrich Kley
  • Professor em. Dr. Dr. h.c. Marcus Lutter
  • Volker Potthoff
  • Heinz finery hammer
  • Christian strict
  • Peer M. Schatz
  • Dr. Wendelin Wiedeking
  • Professor Dr. Axel von Werder

<p>Die government commission3 remained existing also after the publication of the Kodex. It is to accompany and at least once in the year examine the development of Corporate Governance in the legislation and practice in Germany, to what extent the Kodex is to be adapted.

The Kodex

The German Corporate Governance Kodex is divided into seven parts:

  1. Preamble
  2. Shareholders and general meeting
  3. Cooperate from executive committee and supervisory board
  4. Executive committee
  5. Supervisory board
  6. Transparency
  7. Accounting and final examination

Contentwise the Kodex contains three kinds of regulations, which differ by the degree of their commitment from each other:

  • Rendition of the legal regulations of the AktG
  • Recommendations ("“target"” - regulations)
  • Suggestions ("“knows"” - regulations)

Criticism at the DCGK

On the yearly press conference of the protective association of the capital investors (SdK) on 3 August 2004 much criticism at the DCGK and/or at its without consequences disregard became loud by a large part of the corporations.

Still two thirds of the prominent corporations in Germany refused putting the purchases of their members of the board respectablly openly. That is a striking offence against the transparency requirement of the DCGK. The Federal Secretary of Justice was requested to compile immediately an appropriate novella in which executive committee and supervisory board members are obligated to make their entire purchases individually public.

Likewise the SdK "“in the meantime the everywhere usual automatism"” criticized with the change of chairmen of the board into the supervisory boards of corporations. With 16 of 30 enterprises DAX 30 are the supervisory board chairmen former executive committee speakers. That equals a "“actual self appointment of supervisory board chairmen"” and is a "“deprivation of power of the capitals owner"”.

Literature

  • Tree, Theodor (Hrsg.): Report of the government commission3 Corporate Governance - management - enterprise control - modernization of the law governing share transactions, Cologne 2001
  • Cromme, Gerhard (Hrsg.): Corporate Governance report 2002, Stuttgard 2002
  • Cromme, Gerhard:
"“The meaning of the German Corporate Governance Kodex for practice"”, in: Credit system 2002, page 502

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