The changing German corporate governance system – normative implications and empirical evidence

Carl-Christian Freidank, Patrick Velte and Stefan C. Weber

International Journal of Corporate Governance, 2010, vol. 2, issue 1, 42-57

Abstract: The objective of this article is to examine the extent to which the traditional insider-oriented German corporate government system is approaching the outsider system of the USA. In this context, the economic and legal systems, the capital market, the ownership structure, the board system as well as the executive compensation are considered determinants. Our study results verify on the one hand that the German corporate governance system is taking on Anglo-American features due to the increase in significance of external mechanisms (particularly the market for corporate control). On the other hand, the elements that have been characteristic of the insider system until now (above all strong supervisory board) are being retained. As a result, it must be emphasised that a sustained approach of the German corporate governance system to the Anglo-American outsider system with pronounced internal mechanisms is taking place. This process can be characterised as a partial formal convergence.

Keywords: corporate governance systems; German Corporate Governance Code; GCGC; corporate control; ownership structure; Germany; USA; United States; supervisory boards; economic systems; legal systems; capital markets; board systems; executive compensation. (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijcgov:v:2:y:2010:i:1:p:42-57

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