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Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

VIPsight is a dynamic photo archive, sorted by nations and dates, by and for those interested in CG from all over the world.

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transparent and independent current information / comments / facts and figures on corporate governance locally and internationally,

  • written by local CG experts,
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VIPsight International

Article Index



Forecasts important again

Which figures are analysts specially looking at? How should indicators be selected and how communicated? How are too-pessimistic forecasts to be included? These are questions that consulting firm cometis asked in December in a poll of sell- and buy-side analysts. It became clear that a forecast should, ideally, include sales, EBIT and EBITDA. However, management should explain why a particular measure is used and others not. With exact data, analysts want a range instead of a precise or even a minimum value. These margins may fluctuate by up to 20 percent. If too-pessimistic forecasts are given, a company is setting its credibility at stake, say the analysts. Accordingly, the goals should be realistic and ambitious and reflect market value as well as the company’s potential. Participants in the study said the lowest transparency was in the guidance sector in banks, property companies and financial services in general.


Good atmosphere on the exchange

Each quarter, the consulting firm cometis interviews leaders from the issuing sector of renowned German and foreign banks about their current views of the capital market in Germany. In the latest survey, the 24 experts surveyed indicated on the record that like overall economic development, the mood was better again. While the German stock market particularly inspired the imagination of participants and 68 percent advise the purchase of German shares, they also expect some positive momentum from the stock exchanges in Europe, Japan and the U.S. In highest favour the technology sector stands undisputed, followed by industry, commerce and chemicals. Companies from the financial sector, i.e. banking and insurance, benefited little from the positive mood and ended up relegated to last place. The DAX, the most important indicator of developments on the German capital market, is expected by the bankers surveyed to be at 7415 points on average at the year’s end. While half of the experts expect five to ten IPOs in 2011, the remaining 50 per cent regard ten to 25 as possible. The experts see the biggest danger for the German stock market as the euro crisis or the indebtedness of the PIIGS States.

Low female ratio

The FidAR (Women onto Supervisory Boards) campaign has published its first Women on Board Index (WoB). In the course of a survey of the 160 companies in the DAX, MDAX, TecDAX and SDAX, FidAR found a women's quota on the boards of 6.5 percent. At almost 17.7 percent, the female ratio on the employee side was comparatively high, but stockholders sent only three percent of women onto the bodies. "A male share of 93.5 percent on management and supervisory boards is no longer acceptable," said FidAR President Monika Schulz-Strelow. CG-Commission member Manfred Gentz, however, warned against political initiatives. Since supervisory boards are usually appointed for five years and 2011 was not a target date for board elections, changes would take time, he argued. Realistically, they are likely only after one to two terms, in 2016 or 2017, according to Gentz. Among the pioneers in the women's quota, in addition to Deutsche Telekom which will have women occupying some 30 percent of the upper and middle management positions by late 2015, is now also Merck. The Darmstadt-based company plans to increase the proportion of women in management positions by 2016 to 25 to 30 percent. Currently Douglas, Deutz and GfK shine as role models. There, the proportion of women in senior positions is between 30 and 40 percent. FidAR will now present the WoB index regularly.

High proportion of funds

In 2010 the Association of German Banks (BdB) counted 27 million private investment accounts. This means one in three Germans has such an account. The value of the securities in them added up to 783 billion euros. €387 billion, or about half that amount, was in investment funds. Some €224 billion are held in the form of bonds and a further €172 billion in shares. Stocks thus form only one fifth of the total investment amount. Adding insurers, businesses and the State, the banking industry takes care of securities worth two trillion euros for domestic customers.