Campus

Code committee implements proposals

The Government Commission on the German Corporate Governance Code on 13 May adopted rules for more transparency in executive compensation largely as provided in the draft. In the comment period, nearly 40 responses had been received, in which agreement in principle had been expressed, said Klaus-Peter Müller. The aim of the Code amendment was to further professionalize and strengthen the Supervisory Board's work, said the Commission's chairman. In the new version, the Supervisory Board is to limit upwards both the compensation of the members as a whole and the variable components. The body is also to consider the relation of compensation to pay of senior management and the workforce as a whole and observe this over time. Regarding pension plans, the Supervisory Board is to determine the respective target pension level for the board and consider the derived annual and long-term expense for the company. In addition, some editorial changes to streamline the Code and improve readability have been made. The revision of the rules on corporate governance will come into force after publication in the Federal Gazette. This step is expected within the next few weeks. Müller attributes little effect to the coalition's plans to cap salaries.

The Federation of German Industry (BDI) has also put the legislature in its place. The repeated interventions in detail issues of corporate governance have weakened the acceptance of the Code in the economy, said Ulrich Grillo. The constant call for statutory regulation ran against the Commission's work. Instead, the German Corporate Governance Code had always established itself in practice. It was a key component of good corporate governance in Germany, the BDI president said on 23 May in Berlin, against the background of the current discussion about the work of the Government Commission on the German Corporate Governance Code. The DAX30 companies followed the Code's recommendations 96 percent.

Consistent: Export orientation stabilizes SMEs in the crisis

Mainly export-oriented larger SMEs and mid-sized niche providers are, according to a study by the Institut für Mittelstandsforschung (Institute for SME Research – IfM), resistant to the crisis compared to large companies. Through their activity on foreign markets they compensate for the fluctuations in domestic demand and remain stable even in times of crisis in employment.

In particular, the export-intensive trade and transport sector has risen in employment by around 18 per cent between 2001 and 2009. Even in the crisis year 2008-9, in trade and transport SMEs employment increased by more than two percent, while large companies suffered a loss of employment of five percent in the same area.