Corporate Governance in Germany: Converging Towards Shareholder Value-Orientation or Not So Much?

Anja Tuschke and Marius Luber

Chapter 4 in The Convergence of Corporate Governance, 2012, pp 75-92 from Palgrave Macmillan

Abstract: Abstract The German governance system is often cited for its stakeholder orientation. Whereas the Anglo-American governance system focuses primarily on the interest of shareholders, in Germany, the corporate fate depends on the support of relevant stakeholder groups. Therefore, German firms tend to maintain close relations with banks and face a stronger voice of employees than in shareholder-oriented governance systems. Additionally, ownership concentration is significantly higher, family-owned firms are more prominent, and the capital market is less developed than in the Anglo-American contexts. Despite these fundamental differences, elements of the Anglo-American shareholder-oriented governance system have been adopted in Germany during the 1990s. Examples are stock-based compensation, transparent accounting standards, and market-based internal control systems (Fiss and Zajac, 2004; Tuschke and Sanders, 2003). Additionally, the German Corporate Governance Codex was introduced in 2002. The Codex was inspired by the Sarbanes-Oxley Act and aims at increasing the trust of investors by improving the transparency of German governance rules and practices.

Keywords: Corporate Governance; Family Firm; Institutional Investor; Governance System; Supervisory Board (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-02956-0_4

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DOI: 10.1057/9781137029560_4

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