The Limitations of the Management Board's Directive Powers in German Stock Corporations

2010 ◽  
Vol 11 (5) ◽  
pp. 493-512 ◽  
Author(s):  
Lars Böttcher ◽  
Sebastian Blasche
Keyword(s):  
Supervisory Board ◽  
Organizational Form ◽  
Corporate Law ◽  
Board Structure ◽  
Management Board ◽  
German Stock ◽  
Stock Corporation ◽  
The U.S

The limitations of the management board's directive powers in German Stock Corporations are an important issue in German Corporate law. The German Stock Corporation or Aktiengesellschaft (“AG”) is the corporate organizational form most directly comparable to the publicly held corporation in the U.S. It is regulated by the German Stock Corporation Act (AktG). The defining feature of the AG is a two-tier board structure containing both a management board (Vorstand), which is in charge of managing the corporation, and a supervisory board (Aufsichtsrat), which is elected by the shareholders' meeting (Hauptversammlung) and which appoints and supervises the management board. The two boards are completely separate from each other, no overlap in membership is permitted.

No Stock Options for Supervisory Board Members of a German Stock Corporation: A Comment on In re Mobilcom AG, BGH II ZR 316/02 of 16 February 2004

2004 ◽  
Vol 5 (4) ◽  
pp. 347-354 ◽  
Author(s):  
Dirk Reidenbach
Keyword(s):  
Stock Options ◽  
Supervisory Board ◽  
Federal Court ◽  
Board Members ◽  
Management Board ◽  
Federal Court Of Justice ◽  
German Stock ◽  
The Law ◽  
Near Future ◽  
Stock Corporation

On February 16th, 2004 the German Federal Court of Justice (Bundesgerichtshof, BGH) delivered a judgment concerning stock options for members of the supervisory board of Mobilcom AG, a major German telecommunications company organized as a stock corporation. As is well known, German stock corporations have a two-tier board, consisting of the management board and the supervisory board. This decision by the BGH sheds again a new light on the much discussed and much disputed management structure of German stock corporations. After this decision, there are now only limited ways in which members of the supervisory board may be compensated with stock options, if at all. In the near future, even these possibilities might be foreclosed by new regulation. The following comment will give a brief overview of the case, the reasoning of the Court, the law as it stands, and finally the law as it might become.

scholarly journals Corporate Governance in Ukrainian Firms: Multiple Model Selections, Their Current Functioning, and Potential Future Problems

2017 ◽  
Vol 42 (4) ◽  
pp. 364-408
Author(s):  
Roman Syvyy
Keyword(s):  
Corporate Governance ◽  
Supervisory Board ◽  
Corporate Law ◽  
Modern World ◽  
Board Structure ◽  
Multiple Model ◽  
Management Board ◽  
Tier System ◽  
Governance Practices ◽  
The Impact

This article explores corporate governance in Ukrainian firms in order to show the parallel application of multiple models of corporate governance within the same business and cultural framework. Ukrainian corporate law is based on a two-tier system, according to which joint-stock companies are governed by two boards: a management board and a supervisory board. Nevertheless, those Ukrainian firms that aim to raise capital on international stock markets and are ready to go public tend to use the uk principles-based model. Since a unitary board structure in public companies is not recognized by Ukrainian law, these firms have to migrate from Ukraine, setting up their centers of corporate governance in foreign jurisdictions. At the same time, recent amendments to the Law on Joint-Stock Companies aimed at enhancing the protection of investors’ rights in Ukraine significantly expanded the legal requirements for corporate governance in public joint-stock companies. The introduction of special statutory obligations along with significantly toughened listing requirements for corporate governance in public joint-stock companies demonstrates the impact of the us rules-based model on Ukrainian corporate governance regulations. Therefore, the governance practices of Ukrainian firms and recent changes in Ukrainian corporate law are evidence of the convergence of corporate governance models in the modern world.

scholarly journals The two-tier board system and underpricing of initial public offerings: Evidence from Austria

2014 ◽  
Vol 12 (1) ◽  
pp. 352-362
Author(s):  
Lalith P. Samarakoon ◽  
Palani-Rajan Kadapakkam
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Supervisory Board ◽  
Board Structure ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Management Board ◽  
Board System

We study the relation between initial IPO underpricing and two-tier board structure in the Vienna Stock Exchange of Austria, where a two-tier board is mandatory for listed companies. The board ratio, defined as the size of the supervisory board to the management board, is used to capture the effect of two-tiered board on underpricing. The results show that the board ratio is negatively related with underpricing, consistent with the agency theory which predicts that more effective monitoring implied in a relatively larger supervisory board will lead to lower agency costs, and thus lower underpricing. The results are robust to the inclusion of control variables and suggest that firms seeking to raise external capital will be helped by adopting strong corporate governance standards.

Konsultative Hauptversammlungsbeschlüsse im Aktienrecht aus rechtsvergleichender Sicht

2021 ◽  
Author(s):  
Mehmet Sadik Çapa
Keyword(s):  
Subject Matter ◽  
General Meeting ◽  
General Context ◽  
European Law ◽  
Legal Basis ◽  
Management Board ◽  
Corporation Law ◽  
Legal Nature ◽  
German Stock ◽  
Stock Corporation

In German stock corporation law, non-binding resolutions of the general meeting as one of the participation instruments for shareholders have so far mainly been summarized or analyzed under the heading of management board remuneration. The purpose of this thesis is, however, to analyze these resolutions not only in this context, but in a more independent and general context. The thesis examines the admissibility and legal basis, legal nature, subject matter, adoption, as well as the consequences of non-binding shareholders resolutions. Thereby, various topics are compared with U.S., Swiss, and Turkish law. In addition, European law is also addressed in various aspects.

Gesellschaftsrechtliche Maßgaben für eine Gruppenbesteuerung ohne Gewinnabführungsvertrag

2019 ◽  
Author(s):  
Jacob Hörnle
Keyword(s):  
Limited Liability ◽  
Corporate Law ◽  
Corporate Tax ◽  
Group Company ◽  
Different Types ◽  
Group Members ◽  
German Stock ◽  
Group Taxation ◽  
Taxation System ◽  
Stock Corporation

In order to establish a fiscal unity for corporate tax (Organschaft) in Germany, group members must be party to a so-called profit transfer agreement according to the German Stock Corporation Act (AktG). This agreement leads to interdependences between tax and corporate law, which are not only often criticized but have even caused efforts to replace the Organschaft by a modern group taxation system not requiring a profit transfer agreement. The present work analyses which questions and conflicts would arise under German corporate law, should a group taxation system which functions without profit transfer agreements be implemented. The analysis considers different types of group taxation systems: one which attributes the tax income of group members to the parent group company, and a group contribution system. The emerging questions and conflicts under corporate law are systematically examined for limited liability companies (GmbH) and stock corporations (AG).

Corporate Governance der börsennotierten KGaA

2019 ◽  
Author(s):  
Malte Vollertsen
Keyword(s):  
Corporate Governance ◽  
Corporate Law ◽  
Reform Proposal ◽  
Corporate Governance Code ◽  
Legal Structure ◽  
German Stock ◽  
Stock Corporation

There is a major debate on the reform of Germany’s corporate governance code. However, it fails to address how a KGaA, a partnership limited by shares, should declare that it adheres to the code, which is solely designed for an AG (a stock corporation). The author addresses this issue and provides guidance for a KGaA’s management on how to declare its conduct in accordance with the code. To start with, he proves that a KGaA’s declaration under section 161 of the German Stock Corporation Act only has to refer to those recommendations of the code which are applicable to a KGaA. Subsequently, the author examines each of the code’s recommendations with regard to their suitability for a KGaA’s different legal structure, focusing on what a KGaA has in common with a corporation. His analysis is complemented with an investigation of KGaAs’ practice so far in this respect and a reform proposal. The author advises companies and their management bodies on all aspects of M & A, corporate governance and general corporate law.

Kapitalmarktkommunikation durch den Aufsichtsrat einer Aktiengesellschaft

2021 ◽  
Author(s):  
Elisa Sophia Knorr
Keyword(s):  
Capital Market ◽  
Supervisory Board ◽  
Legal Framework ◽  
Market Communication ◽  
Competence Structure ◽  
German Stock ◽  
Stock Corporation

Contrary to what the inclusion of a suggestion in the “DCGK” regarding investor dialogue by the chairman of the supervisory board and its widespread use in practice would suggest, the legal framework for capital market communication by the supervisory board has not yet been clarified. The author therefore examines the admissibility and limits of capital market communication by the supervisory board by analysing German stock corporation and capital market law. In particular, it is shown that topic-specific communication competences result from the dualistic competence structure as annex competences and that narrowing the communication responsibilities to the chairman contradicts the nature of the supervisory board as a collegial body.

Germany Inc. Eroding? - Board Structure, CEO and Rhenish Capitalism

2002 ◽  
Vol 3 (6) ◽  
Author(s):  
Peer Zumbansen
Keyword(s):  
Cultural Revolution ◽  
Supervisory Board ◽  
Press Coverage ◽  
Board Structure ◽  
Fundamental Change ◽  
Small Circle ◽  
Financial Pressure ◽  
German Company ◽  
German Stock ◽  
Banking Institution

On May 22, Mr Rolf-Ernst Breuer, until then speaker of the managing board of Deutsche Bank AG (“Bank”), stepped aside to let Mr Josef Ackermann take his place in the small circle of leading managers of Europe's biggest banking institution. Mr Breuer takes the chair of the Bank's supervisory board, as is often practice for the departing Speaker in German stock corporations. This would – in and by itself – be less noteworthy were it not marking, at the same time, possibly a fundamental change in German company structure. The French newspaper, Le Monde, asked already ahead of time whether the event ought to be seen as a cultural revolution and other commentators are readily applying likewise vocabulary. Mr Ackermann has, for some time now and under immense press coverage, been ventilating his strong desires to change the inner workings and structure of the Bank's managing board and it is all but easy to decipher whether or not he ultimately will succeed in doing so and which other changes his initiatives eventually will bring about. The structural overhaul inside the Bank certainly takes place at a time where the Bank is facing financial pressure.

Kapitalmarktkommunikation des Aufsichtsrats

2020 ◽  
Author(s):  
Laura Greimel
Keyword(s):  
Supervisory Board ◽  
Corporation Law ◽  
Management Responsibility ◽  
German Stock ◽  
Stock Corporation

The author analyzes the dialogue between supervisory board and stock holders against the background of the board's and the supervisory board's level of competences as set forth in German stock corporation law. Part one outlines "if" the supervisory board is authorized to communicate with stock holders and interprets applicable competences under German stock corporation law to be extended by communication annexes. Part two sets out contents and limits to such communication competences based on (i) the board's overall management responsibility as well as (ii) the rules of equality and confidentiality.

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