Reassessing the convergence thesis. An analysis of the 2018/2019 Corporate Governance Codes of the United Kingdom and Germany

Doktorarbeit / Dissertation , 2019 , 56 Seiten , Note: A

Jura - Zivilrecht / Handelsrecht, Gesellschaftsrecht, Kartellrecht, Wirtschaftsrecht

This paper presents a reassessing the convergence thesis. It takes the adoption of the new German Corporate Governance Code 2019 ("GCGC") as an opportunity to verify the thesis whether signs of convergence of contrasting corporate governance systems towards a single model are evident. For this purpose, a comparative analysis of the GCGC and the UK Corporate Governance Code 2018 ("UKCGC") is conducted. The UKCGC and the GCGC originate from competing corporate governance systems – the UK (enlightened) shareholder value model and the German stakeholder model – so the two Codes are ideally suited for a comparative analysis to verify the convergence thesis. It shows that the advancing globalization has generally contributed to a shift towards an Anglo-American corporate governance pattern in European countries.

Convergence is also attributable to the harmonization of national laws through EU legislation. The comparative analysis of the UKCGC and the GCGC reveals broad signs of convergence with a large number of similar corporate governance mechanisms and provisions. Nevertheless, there are still region-specific differences in the Corporate Governance Codes that can be traced to the underlying corporate governance philosophy. However, board practice demonstrates that the structural differences between the two corporate governance systems are blurring. The comparative analysis also illustrates that the Corporate Governance Codes are converging from both sides.

Table of Contents

A. Introduction

B. Definition of Corporate Governance
1. Broad Definitions in the Corporate Governance Codes
2. Narrow Interpretation by Financial Economists

C. Corporate Governance Framework in the United Kingdom and Germany
1. Evolution of the Corporate Governance Codes
a) The First Corporate Governance Code Originated in the United Kingdom
b) Development of a Corporate Governance Code in Germany
2. Classification of the Corporate Governance Systems
a) The Anglo-American Outsider System
b) The European Insider System
3. Factors Leading to a Divergence of Corporate Governance Systems
a) Law
b) Politics
c) Culture

D. Globalisation and Convergence of Corporate Governance
1. Internationalisation and Institutionalisation of Equity Ownership
2. Convergence of Disclosure Standards

E. A Comparative Analysis of the UKCGC and the GCGC
1. The Obvious Differences
a) Company Purpose and Stakeholder Engagement
b) Board Structure
c) Board-Level Employee Representation and Co-Determination
d) Directors’ Terms of Office
e) Age Limits
f) “Overboarding” and Restriction of Board Mandates
2. Similarities and Signs of Convergence
a) Application of the Codes
b) Structure of the Codes
c) Corporate Governance Reporting and the “Comply or Explain” Principle
d) Governance Tasks of the Boards
e) Board Committees
(i) Audit Committee
(ii) Nomination Committee
(iii) Remuneration Committee
f) Appointment, Composition and Diversity on Boards
g) Board Independence
h) Directors’ Remuneration
(i) Executive and Managing Directors’ Remuneration
(ii) Non-Executive and Supervisory Directors’ Remuneration
i) Related-Party Transactions
j) Self-Assessment of Performance
k) Conflicts of Interest
g) Meetings of Non-Executive and Supervisory Directors

F. Lessons Learned
1. GCGC Restructured as Best Practice Approach
2. Areas in Which the GCGC Has Learned From the UKCGC’s Criticisms
a) Terms of Office of Supervisory Board Members
b) Limitation of Supervisory Board Mandates
3. Convergence of the UKCGC towards the GCGC
a) Enlightened Shareholder Value
b) Board Structure vs Board Practice
c) Employee Directors

G. Conclusion

Bibliography

• Hochschule: University of Edinburgh (Edinburgh Law School)
• Veranstaltung: Dissertation in Law
• Note: A
• Autor: Thomas Böhm (Autor:in)
• Erscheinungsjahr: 2019
• Seiten: 56
• Katalognummer: V506705
• ISBN (eBook): 9783346053275
• ISBN (Buch): 9783346053282
• Sprache: Englisch
• Schlagworte: Corporate Governance, German Corporate Governance Code, UK Corporate Governance Code, supervisory board, management board, convergence, enlightened shareholder value model, stakeholder model, globalisation, harmonisation, Shareholder Rights Directive, agency theory, Cadbury, chairman, CEO, non-executive directors, comply or explain, Baums, listed companies, Cromme, Anglo-American Outsider System, institutional investors, European Insider System, concentrated ownership, controlling shareholders, separation of ownership and control, co-determination, divergence, law matters, La Porta, Hansmann, Kraakman, Civil law, common law, path-dependence, unitary board, two-tier board, Board-Level Employee Representation, Overboarding, Board Committees, Independence, Remuneration, Composition, Diversity, Best Practice