Corporate Governance: Legal Aspects

Oliver Rieckers and Gerald Spindler

in The German Financial System

Published in print March 2004 | ISBN: 9780199253166
Published online January 2005 | e-ISBN: 9780191601651 | DOI:
 Corporate Governance: Legal Aspects

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Although there are plenty of signs that the German model of corporate governance is indeed forced into a transition to a more capital market-oriented one, the remnants of the old modus operandi persist. In portraying the traditional legal foundations of German corporate governance, the present chapter first explores how such archetypal internal structures as the dual board system, mandatory labour codetermination and the specific legal regime for groups of companies are embedded in the fundamental structure of German corporate law.

It then outlines some of the issues that define the ongoing transition process. The basic general thrust of this part is that the traditional corporate governance system, which has long been dominated by a focus on the legal rules determining the inner structures of the corporation, is more and more integrating new elements of an emerging body of capital market laws leaving German stock corporations under the governance of a non-uniform set of rules. Recent developments such as the German takeover law and the German Corporate Governance Code will further strengthen capital market orientation, but the final outcome of this process of modernisation cannot be assessed clearly yet.

Keywords: corporate governance code; creditor protection; depositary voting rights; dual board system and codetermination; management and supervisory board; minority protection; proxy voting; securities acquisition and takeover act; shareholder rights

Chapter.  17262 words. 

Subjects: Financial Markets

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