German Corporate Governance Code

The Government Commission* appointed by Justice Minister September 2001 adopted the German Corporate Governance Code on February 26, 2002.

Through the declaration of conformity pursuant to Article 161 of the Stock Corporation Act (AktG) as amended by the Transparency and Disclosure Law, entered into force on July 26, 2002, the Code has a legal basis. The Code is published in its latest version in the official section of the electronic Federal Gazette at www.ebundesanzeiger.de. For 2002 the transitional provision under Article 15 of the introductory act to the Stock Corporation Act (EGAktG) also has to be observed.

The latest version of the Code is published on this internet page. This version includes the amendments resolved at the plenary meeting on May 26, 2010, since the amended version has been also published in the electronic Federal Gazette.

The aim of the German Corporate Governance Code is to make Germany’s corporate governance rules transparent for both national and international investors, thus strengthening confidence in the management of German corporations. The Code addresses all major criticisms – especially from the international community – leveled against German corporate governance, namely

• inadequate focus on shareholder interests;
  
• the two-tier system of executive board and supervisory board;
  
• inadequate transparency of German corporate governance;
  
• inadequate independence of German supervisory boards;
  
• limited independence of financial statement auditors.

Each of these five points is addressed in the provisions and stipulations of the Code, also taking into consideration the legal framework. Of course the Code cannot cover every detail of every single issue, instead it provides a framework which the individual companies will have to fill in.

The Government Commission on the German Corporate Governance Code will remain in existence after the Code has been handed over. It will observe the development of corporate governance in legislation and practice and will review the Code at least once a year for possible adaptation. Please send your comments and proposals to the office of the Government Commission on the German Corporate Governance Code at the following address

* Members:
Klaus-Peter Müller (Chairman), Prof. Dr. Dr. Ann-Kristin Achleitner, Prof. Dr. Theodor Baums,
Dr. Hans-Friedrich Gelhausen, Dr. Dr. h.c. Manfred Gentz, Dietmar Hexel, Ulrich Hocker,
Prof. Dr. Henning Kagermann, Max Dietrich Kley, Dr. Stefan Schulte, Christian Strenger,
Prof. Dr. Axel v. Werder, Daniela Weber-Rey, Prof. Dr. Beatrice Weder di Mauro