Corporate Governance: Expectations - pitfalls - best practices

Tobias Atzler, Siemens AG
Ingo Speich, Union Investment
Prof. Dr. Christoph H. Seibt, Freshfields

Corporate governance is one of the most discussed management topics - also in research. Demanding governance structures should provide a suitable framework for "all-round quality" in corporate governance. Closely related to this is the long-term, sustainable corporate success. But what expectations do investors have of corporate governance? And how can companies improve their related communication?

Tobias Atzler (Siemens) and Ingo Speich (Union Investment) talked in detail about the relevance and expectations of corporate governance issues in the dialogue between companies and investors. Prof. Dr. Christoph (Freshfields) also gave an insight into the legal requirements and current developments in the field.

One of the key issues was the company's communication requirements on governance issues. Both, remuneration issues and the composition of the Management Board and Supervisory Board would require transparent, consistent and often actively pursued communication by companies. In practice, instruments such as governance roadshows are established for this purpose.

The discussion also focused on differences in governance systems in international comparison. In this context, it was discussed that pressure arises from activist investors who would focus on specific European or German weaknesses in corporate governance. The focus is on "cooling off" perios, diversity, and the age of supervisory board members. The decrease in the average stay of German managers at the top of the company was certainly also a topic of discussion.

Finally, the panelists provided a glimpse into the future. In particular, the changing ownership structures were discussed: the relevance of passive funds, family offices from home markets and abroad and activist investors will continue to increase and have an impact on communication with regards to corporate governance. On the one hand, the pressure on the dualistic German governance system remains high. Here a further Americanization can be expected. On the other hand, we also see that the involvement of stakeholders in governance structures is being considered intensively in the Anglo-Saxon area. Here, Germany can be considered as more progressive.