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Governance, Risk, and Compliance Handbook: Technology, Finance, Environmental, and International Guidance and Best Practices by Anthony Tarantino

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CHAPTER 55

GLOBAL COMPLIANCE: GERMANY

Georg Stadtmann

Markus F. Wissmann

55.1 REGULATORY COMPLIANCE OVERVIEW

(a) Political and Cultural Environment

(b) Legal Environment

(i) Law for Joint Stock Companies

(ii) Securities Laws

(c) Accounting and Finance Environment

(d) Auditing Environment

(e) People and Process

55.2 CASE STUDY: TRANSPARENCY OF EXECUTIVE COMPENSATION IN GERMANY

(a) Introduction and Theoretical Background

(b) Descriptive Statistics

55.3 CONCLUSION

NOTES

REFERENCES

In this article we summarize the most recent developments in compliance in Germany. We show that Germany has developed over time from a stakeholder-oriented corporate governance system toward a shareholder-oriented system. Most recent developments in accounting and auditing are driven by European directives and regulations.

In the case study part we show that compliance/noncompliance with the German Code of Corporate Governance with regard to the disclosure of executive compensation led to the inception of a law enforcing disclosure. In an empirical analysis we show that the compensation between members of the management board and others differs greatly among companies.

55.1 REGULATORY COMPLIANCE OVERVIEW

(a) POLITICAL AND CULTURAL ENVIRONMENT

Corporate governance systems may be differentiated between shareholder- and stakeholder-oriented systems. Shareholder-oriented systems such as the U.S. system focus on modeling the principal-agent relationship of shareholders and top management.1 Stakeholder-oriented ...

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