The "German Code of Corporate Governance"

Table of Contents

List of Abbreviations List of Tables and Figures

A. Introduction to the Topic
I. Statement of the Problem
II. Objectives and Structure of the Paper

B. Conceptual and Theoretical Bases of the Corporate Governance Debate
I. Definition of the Term Corporate Governance
II. Fundamental Problems and Goals of a Corporate Governance Systems
1. The Agency-Problem in a Corporation
2. Distinction between Shareholder- and Stakeholder Systems

C. Presentation and Comparison of the Corporate Governance Systems in the USA and in Germany under the Criterion of the Internationalisation of the Economy.
I. Introduction
II. Presentation of the Governance Systems in the USA and in Germany
1. The One-Tier-System in the USA
2. The Two-Tier-System in Germany
III. Comparison of the Corporate Governance Systems in the USA and in Germany under the Criterion of the Internationalisation of the Economy

D. The Development of the “German Code of CorporateGovernance”
I. The „OECD-Principles of Corporate Governance” as an
International Standard
II. Changes in the Range of Corporate Governance by the Corporate Sector Supervision and Transparency Act
III. Panels and Commissions involved in the Development of a “German Code of Corporate Governance ”
1. Herzog-Tietmeyer-Commission
2. Commission of Corporate Governance Principles of Frankfurt
3. The Initiative for the “German Code of Corporate Governance” of Berlin
4. The Government Commission for the “German Code of Corporate Governance”

E. The “German Code of Corporate Governance” ...
I. Scope, Structure and Types of Regulations of the Code
II. Commitment and Legal Control of the Code
III. Relevant Specifications of the Code
1. Foreword
2. Shareholders and General Meeting
3. Co-operation between Management Board and Supervisory Board
4. Management Board
5. Supervisory Board
6. Transparency
7. Reporting and Audit of the Annual Financial Statement F. Summary and Conclusions

Appendix

References

Single Editions

Collective Editions

Magazine - and Newspaper-Articles

List of Internet Sources

List of Laws and Other Sources

List of Abbreviations

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List of Tables and Figures

Table 1: On which Factors Institutional Investors Attach Importance

Table 2: The Considerable Growth of the Stock Market in Germany

Table 3: The Ownership Structure of German Corporations 1970-1997 (in percent)

Figure 1: Network Disclosable by the Statement of Independence

A. Introduction to the Topic

I. Statement of the Problem

The management and supervision of corporations, known as corporate governance in English and, frequently, in German-speaking countries as well, has been a topic of discussion since beginning of the 90's in the USA. After arriving in Great Britain the discussion subsequently spread to Continental Europe.^[1] In Germany, the effective supervision of corporations became a central topic of debate after several well-known corporations came under scrutiny for mismanagement.^[2] In such cases the corporations’ supervisory boards were criticised in particular, as their supervision of management was considered insufficient and ineffective.^[3]

The relation between management and owners of a corporation represents the basic problem of the corporate governance discussion. The management of a corporation must take the interests of large-scale investors and, accordingly, the interests of smaller investors into consideration. Against this background, the influence of the stakeholders is repressed. The shareholder value system, thus, becomes increasingly important.^[4]

Globalisation and the resulting integration of capital markets has caused more and more large institutional investors -especially, those from Anglo-Saxon countries- to put their financial assets to the test in order to check the efficiency of management and supervision.

In Germany, in particular, effective regulations on corporate governance have been missing until now. In most of the other countries with a free market economy, a code of conduct with generally accepted principles is already in existence. These principles enable investors to check and to judge systematically a corporation in regard to its corporate governance.^[5]

Corporations with transparent supervisory systems obtain clearly better stock quotations as corporations without those systems. Numerous surveys have found that institutional investors are willing to pay up to a 20 percent premium for shares of corporations with good corporate governance. Such investors maintain that transparency and efficient supervision reduce the risk of mismanagement.^[6]

Due to both the internal pressure of mismanagement and the external change caused by the globalisation of capital markets, the corporate governance discussion in Germany has resulted in much effort to create a system of regulations to make Germany more attractive to international investors. In addition to this, the regulations are intended to stem the criticism of numerous aspects of German corporate governance, such as poor allignment with shareholders’ interests, the lack of transparency within German management and poor co-operation between the management board and the supervisory board.^[7]

II. Objective and Structure of the Paper

The intention of the presented work is to give reasons for the necessity of the “German Code of Corporate Governance” and to show its development.

Chapter B presents the fundamental terms and theories of the corporate governance debate. First, the term corporate governance is defined. Then, fundamental problems and goals of a corporate governance system are described. Here, the problems of manager supervision that result from the seperation of ownership and management are discussed. Subsequently, a distinction between the shareholder- and stakeholder system is made.

In chapter C the corporate governance systems in the USA and in Germany are compared. The countries are first examined separately and then in relation to each other.This occurs for two reasons: On the one hand, it is described that the investor’s supervision problems can be solved in different ways. On the other hand, it is shown that globally active corporations adapt to international management and supervision standards that are mostly Anglo-American in origin.

In chapter D the development of the "German Code of Corporate Governance" is illustrated. It is based on the “OECD-Principles of Corporate Governance” which represent the international standard. Based on this international standard, numerous poltical and business committees and commissions created regulations that contributed to a uniform code.

In chapter E the final version of the "German Code of Corporate Governance" is presented. Here, both the scope and structure of the code as well as different types of regulations are described. The binding nature and legal control of the code are then discussed. Finally, this chapter presents an illustration of the relevant specifications of the code.

Chapter F summarises the main results of the work and draws a conclusion.

B. Conceptual and Theoretical Bases of the Corporate Governance Debate

I. Definition of the Term Corporate Governance

Since corporate governance is an internationally applied term, no standardised definition exists. However, in the internationally accepted understanding of the term it is responsible management and supervision intended to add long-term value.^[8]

The term corporate governance comprises the rights, tasks and responsibilities of the corporations legal bodies -the general meeting, the management board and the supervisory board-the shareholders, the employees and furthermore the stakeholders -that is, those who either profit from the management and the success of a corporation or who lose due to their failures.^[9]

“Good corporate governance stipulates the efficiency and, thus, the value of a corporation. It strengthens the confidence of the shareholders, the investors, employees, business partners and the general public.“^[10]

Corporate governance is coined by both the institutional and legal framework, as well as by the practice of the capital markets and by the economic and entrepreneurial culture of the country concerned. Since these are different in each country, one can speak of no consistent model of corporate governance. Nevertheless, principles for corporate governance, which do not differ regarding their purpose, exist in every country.^[11]

II. Fundamental Problems and Goals of a Corporate Governance System

The definition of the term corporate governance brings no use by itself. It raises, instead, the question of what the aimes of a well-governed corporate governance system should be and with which fundamental problems corporate governance has to argue.^[12]

On the one hand, the corporate governance systems are differentiated according to whom the objective of the corporation is aligned to. On the other hand the problem of a clash of interest between the management and the shareholders exists within a corporation.

1. The Agency-Problem in a Corporation

The agency theory deals with the question how strongly the structure of a corporation should be aligned to the supervision of the management.^[13]

It is typical in a corporations that the management, on the one side, and the contribution of assets, on the other, is conducted by different people. Therefore, the dependency of both parties on each other can arise.

The manager (agent), on the one hand, has the know-how, takes on the management of the corporation and thus makes use of a considerable scope of decisions to realise the multitude of the corporation’s objectives. The shareholders, on the other hand, has capital funds at their disposal and wants to invest it as profitably as possible, i.e. he wants to maximise the shareholder value of a corporation.

The difficulty now lies in the fact that the management does not inevitable pursue the interests of the capital holders. It is impossible to define completely all relations between owners and managers contractually. In order to solve this conflict, a supervisory board that is clearly seperated from the management in terms of corporate governance is indispensable.^[14]

2. Distinction between Shareholder- and Stakeholder Systems

In the broad sense of the meaning, corporate governance describes the institutional mechanisms with which the management of a corporation is supervised.^[15] Thus, these mechanisms also regulate the relations of the shareholders, managers and stakeholders among themselves.

The following section illustrates both Anglo-Saxon shareholder value system and the Continental-European stakeholder system.^[16]

The shareholder value system evaluates a corporation from the shareholder’s perspective and is characterised by an increase in the assets of shareholders with future dividends and a rise in the stock price. When determing the firms value, one measures the amount of cash flow investors of a corporation can expect in the future. This point of view assumes that the corporation is the private property of the shareholders. Thus, the management only accounts to them and cares for their interests and well-being.^[17]

Whereas the shareholder system prefers to deal with the interests of the shareholders, the stakeholder system bases itself on the requirements of other groups as well, thus, leading to a balance of interests between employees, creditors, customers, suppliers and the exchequer.^[18]

As a result of more severe international competition on the capital market, the pressure on the shareholder value orientation has clearly risen and has, therefore, restricted the scope for the management. The position of the shareholders becomes more and more important and a corporate governance system has to meet their requirements.

The following table shows which factors large-scale investors, or institutional investors, attach importance to when judging corporate governance. Based on information from the table it is notable that the institutional investors rank the shareholder value of a corporation 4th in their criteria of importance.^[19]

Table 1 : Institutional Investor’s Criteria of Importance^[20]

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Source: DWS/Déminor from Manager Magazin 08/2001, p. 85.

C Representation and Comparison of the Corporate Governance Systems in the USA and in Germany under the Criterion of the Internationalisation of the Economy

I. Introduction

The strive for effective and independent corporate governance is a major concern in both America and in Germany. Against the background of the internationalisation of the capital markets and the increasing influence of institutional investors, particularly from the Anglo-American area, the demand for an efficient corporate governance system grows. When looking at both countries, it is noticeable that, with the separation of the supervisory board from the management board, two different possibilities arise.

The single management board system in the USA integrates the supervisory board into the managing board. In this way, members, who do not actually deal with management tasks, are integrated into the executive management. They do, however, fulfill the supervision of the managing board members. For this reason the management responsibilities are divided between inside and outside directors.^[21]

The dual board system in Germany has a legally formulated system of supervision. The supervisory board is installed as an organisational separate supervisory body independent from the management body. Thus, it appears as an independent body that is equal to the other bodies.^[22]

II. Representation of the Corporate Governance Systems in the USA and in Germany

1. The One-Tier System in the USA

American corporate law is characterised by small regulations. There are no globally or federally consistent regulations for public corporations. Definitive for the structure of public corporations in America are the laws of the individual federal states, called corporate statutes.^[23]

Nevertheless, the majority of the federal states orient themselves around a standardised law model created by the American lawyer’s union, or American Bar Association. This model, which has been revised several times since its initiation, comes from the year 1946 and is called the Model Business Corporation Act.^[24]

The American system of corporate administration is a single-tier structure. The administrative body consists of the board of directors. An additional supervisory body is not part of this system, and thus no institutional separation from management and supervision exists. Both functions are carried out by the board of directors, i.e. it monitors itself.^[25]

In practice, however, managing and non-managing^[26] members of the board -the inside and outside directors- are differentiated from each other.^[27] The inside directors work exclusively for the corporation, and they are in charge of the executive management of the corporation. In contrast, the outside directors merely work on the side for the corporation and monitor the executive management.^[28]

The number of board members is usually between 7-13. Here, the outside directors make up, on average, 75 percent.^[29]

The directors elect a chairman from its members, called the chairman of the board. The chairman of the board is, as an outside director, responsible for the supervision of the executive management.^[30]

The officers are differentiated from the directors. They take leading functions in the corporation and are directly appointed by the board of directors. In larger corporations the officers form an executive committee, which are responsible for important decisions between the board sessions.^[31]

Furthermore, the board elects a chief executive officer (ceo) who is generally entrusted with management functions.^[32] He has the sole authority to conduct business transactions and the power of representation for the entire daily business activities and therefore acts on behalf of the board of directors.^[33]

The board makes important decisions concerning the business policy such as the addition or termination of a line of business. It authorises borrowings and real estate deals. Beside selecting the executive officers it also appoints other members of the executive staff and fixes their salaries.^[34]

Moreover, the issue of new shares as well as the fixing of values is also their responsibility. It values assets in regard to an increase in capital, and decides on the repurchase of shares and on the distribution of dividends.^[35]

In order to support the work of the board, board committees are formed. Among these the audit committee is the most important. It exists in 95 percent of the public corporations in America. Furthermore, the setup of an audit committee is the prerequisite for the listing at the New York Stock Exchange (NYSE).^[36]

The primary function of this committee is the supervision and examination of the management. It supervises the finance and accounting, and the supervision system within the corporation in different ways and independently from the management. Besides the already mentioned audit committee, nominating and compensation committees exist as well. There are also finance committees and investment policy committees in some corporations.^[37]

American shareholders can assert their rights with the help of the shareholders meeting. Thus, it constitutes the supervisory body of the shareholders.^[38] The legal regulation for the shareholders meeting is found in the corporate statues which stipulate an annual meeting. At this meeting the shareholders can, among other things, recall the board of directors and elect a new board.^[39]

Since the members of the board and, thus, also the management board are exclusively appointed at the shareholders meeting, it can be derived that these people traditionally feel bound only to the interests of the shareholders. Their primary goal therefore is to increase the capital of the shareholders (shareholder value system).^[40]

2. The Two-Tier-System in Germany

Since German adjudication results from the standards set by the federal government, German law comprises many regulations. The German Aktiengesetz/AktG (stock corporation act) and the German Mitbestimmungsgesetze/MitbestG^[41] (worker participation act) are decisive for the corporate constitutions of German public corporations. These laws define all necessary bodies, regulate their composition, functions and responsibilities.^[42]

The German corporate governance system is based on the idea of separation of management and supervision of a corporation. These are assigned to two different bodies, the management board and the supervisory board of a public corporation (dualistic). The third body required by the German Aktiengesetz is the general meeting, in which the shareholders exercise their rights. The three bodies are not assigned to each other hierarchically but they exist parallel to each other.^[43]

The management board manages the corporation independently (§ 76 para. 1 AktG). It represents the corporation in and out of court (§ 78 para. 1 AktG). The supervisory board appoints the management board for a maximum period of five years (§ 84 para. 1 AktG). The appointment can only be withdrawn upon due cause shown (§ 84 para. 3 rec. 1 AktG).^[44]

For this reason the management board enjoys a secure position and can lead the business to a large extent undisturbed. However, the board must conduct its work carefully and accept the responsibility of a respectable businessperson. It is also equally liable for the negligence of all its members (.§ 93 para. 1 and 2 AktG).

Furthermore, the management board has the duty to report anything the supervisory board requires. These reports contain primarily the corporate policy, basic questions of the business planning, information about the economic position and about the future development of the corporation (§ 90 para. 1 AktG).

The supervisory board as a permanent supervisory body has to monitor the executive committee’s management board (§ 111 para. 1 AktG). It consists of at least 3 and a maximum of 21 members (§ 95 AktG). The supervisory board represents the interests of the shareholders and of the employees. The representatives of the shareholders are elected by the shareholders’ meeting for a period of four years (§ 102 para. 1 AktG). The representatives of the employees are elected in accordance with the German Mitbestimmungsgesetz. The composition depends on the type and size of the corporation and the Mitbestimmungsgesetz (§ 96 AktG). Corporations with less than 500 employees are exempt from participation. In public corporations with more than 500, but less than 2000 employees the shareholders fill two thirds of the seats on the supervisory board and the employess fill the remaining third (§ 76 para. 1 BetrVG). In corporations with 2000 or more employees (§ 7 MitbestG) the supervisory board is to be filled in equal numbers.

In order to guarantee a clear separation between management and the independent control body, members of the supervisory board should not belong to the executive committee at the same time (§ 105 AktG).

The supervisory board is allowed to make use of the following possibilities in order to fulfill his task of supervising the executive committee:

It can issue an agenda for the management board, if this is regulated by the statute (§ 77 para. 2 rec. 1 AktG). Furthermore, it determines the executive committee’s salaries (§ 87 para. 1 rec. 1 AktG).

As already mentioned, the supervisory board has the right to receive annual reports of the future corporation policy and quarterly information about current business. It also has the right to receive information concerning the state of the corporation and about all unusual transactions (§ 90 para. 1 and 2 AktG).

At any time it has the right to catch up information about the current situation of the corporation (§90 para. 3 AktG).

The supervisory board has certain rights to examine the books and assets of the corporation (§ 111 para. 2 AktG).

Arrangements by the management cannot be transferred (§ 111 para. 4 rec. 1 AktG), however the statute or the supervisory board itselfs can determine that certain types of business can only be conducted upon its agreement (§ 111 para. 4 rec. 2 AktG).

The supervisory board verifies the year-end closing for its correctness and has the possibility of discussing open questions on the submitted reports with the accountant (§ 171 para. 1 AktG).

The shareholders’ meeting represents the forum of the shareholders. In this way the shareholders are able to express their rights (§ 118 para. 1 AktG). Each shareholder possesses the right to receive information (§ 131 para. 1 AktG). At year-end closing, the executive committee provides the report of the situation and the report by the supervisory board are provided on the shareholders’ meeting by (§ 120 para. 3 rec. 2 AktG). Thus, the shareholders’ meeting additionally serves as an inspectation of the managers.

The most important decisions assigned to the meeting are regulated by the German Aktiengesetz (§ 119 para. 1 AktG):

The substantial ones are the selection of the supervisory board members from the shareholders, the selection of the accountants, and, furthermore, the removal of management and supervisory board members. Decisions over the use of the balance profit, modifications to the statutes when capital is concerned, and lastly structural changes such as the fusion or termination of a corporation contract and the liquidation of the corporation, are regulated by the Aktiengesetz.

III. Comparison of the Corporate Governance Systems in the USA and in Germany under the Criterion of the Internationalisation of the Economy

When describing and examining the respective systems, the following question arises: which system is the best? Considering the fact that both systems have already existed next to each other for quite some time, neither of them can be called superior. In the following section some comparative considerations will be made. These will not only refer to the structure of the management but also point out the conditions in the capital markets and the other surrounding fields.^[46]

In particular, the comparison will represent how the different systems solve the investors’ problems of supervision and how globally active corporations feel impelled to adapt to the new market conditions caused by the internationalisation.

Due to the two-tier system, the constitution of the German corporation is able to separate the function of supervision clearly from the management.

This separation is advantageous because it allows the supervisory board to be legally self-sufficient and act as an independent body, supervising the managenment board. A substantial weakness of the two-tier model exists however in the supervisory board’s distance from the decision-making process. In order to efficiently carry out its monitoring responsibilities, the supervisory board has to be informed of the management board’s projects and decisions. Without permanent information the supervisory board stays deaf and blind.^[47]

In contrast to the German two-tier model, the supervising authority is well integrated into the management committee of the one-tier model. There is the risk that members of the board -outside directors-, who actually have the function of supervision, assist in making decisions that are reserved for the management -inside directors-. Due to this integration of the independent supervisory body, a wrong “we-feeling” can arise, creating a sense of solidarity among the board members and leading to a disregard of the supervisory function.^[48]

The fact that in 80 percent of the cases, the chairman serves as the chief executive officer (ceo) as well, leads to a further mixture of the supervision and management functions.^[49]

Particularly in Anglo-Saxon board-systems where management and supervisory board are acting in the same committee the chairman of the management board is even the supreme supervisor at the same time. But this exists also in other international acting corporations, e.g. at Nokia where Jorma Ollila is ceo und chairman in one person. (Hetzer/Papandick from Manager Magazin 08/2001, p.96).

In regard to the different supervising systems of both countries, it is easy to realise that the internal supervision of management in America carries relatively less weight than in Germany. Participants in the capital market, such as institutional investors, who carry out the important supervisory functions, replace the internal check.^[50]

The share-ownership ratio of American corporations shows that their shares remain, to a large extent in private ownership and in the hands of institutional investors.

The stock market in the USA has a very great importance and is consequently defined as “market-based”.^[51]

The external check by the capital market or by institutional investors has played a comparatively small part in Germany thus far. The following table does, however, reveal the considerable growth of the stock market in Germany.^[52] In particular, the market capitalization and the stock issues increased. In addition to that, the number of national listed corporations increased significantly.

Table 2 : Growth of the Stock Market in Germany

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* The end of year status

** Since 1994 the entire Federal Republic of Germany, before West-Germany

Source: according to Matthes, J. (2000): Das deutsche Corporate Governance-System: Wandel von der Stakeholder-Orientierung zum Shareholder-Value-Denken, Cologne; p. 33.

A similar impression is made in regard to the financial assets of institutional investors in Germany. The study "Financial Assets of Institutional Investors 1992-2000 " by the OECD shows the increase from 665.2 billion dollar in the year 1992 to 1507.1 billion dollar in the year 2000.^[53] The annual growth rate of the financial assets of institutional investors in the OECD area averaged 11 percent from 1991 to 1999.^[54]

In the future, the causes of change to the German corporate supervisory system will hardly lose its momentum. First of all, institutional investors will gain further influence. The following table shows the ownership structure of German corporations from 1970 to 1997 and makes clear that both investment trust, and equity participation from abroad rose strongly in this period.

Table 3 : The Ownership Structure of German Corporations 1970-1997 (in percent)

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Source: according to Nassauer, F. (2000): Corporate Governance und die Internationalisierung von Unternehmungen, Frankfurt/Main; p. 84.

In particular, these large investors critise the large corporations according to the quality of their corporate governance^[55] Globally oriented corporations have to meet their demands and be sufficient for international standards, in order to stay in business in the international capital market for the long-term.

The investment corporation DWS made a survey, in which large investors evaluated the corporate governance system of the 50 Euro-Stoxx corporations. They did this in order to visualise the constitution of European corporations in that subject. The evaluation criteria used, were the shareholder rights, the quality of the supervisory board, transfer barriers, transparency and the commitment to the shareholder value. The study pointed out that the German corporations examined lie in the lower centre zone. French and Spanish corporations dominate the top-ten area.^[56]

This situation has caused many to call for change in Germany and to create a system of corporate governance as it already exists in some other European countries. This would meet the international requirements and help stem criticism of German corporate governance.

[...]

^[1] See Rosen (2001), http://www.dai.de/internet/dai/dai-2-0.nsf/dai_publikationen.htm (Stand 08.08.2002).

^[2] See Nassauer (2002), p.1; Recently, problems of German stock enterprises like Metallgesellschaft, Balsam/Procedo, Berliner Bankgesellschaft, Holzmann and Kirch have attracted attention.

^[3] See Goergen (2002), p.66.

^[4] See Matthes (2000), p.53; See also this thesis chapter B.II.2.

^[5] See Rosen (2000), http://www.dai.de/internet/dai/dai-2-0.nsf/dai_publikationen.htm (Status 08/08/2002).

^[6] See Hetzer/Papendick (2001), p.93.

^[7] See Berrar (2001), p.52; See http://www.corporate-governance-code.de (Status 08/08/2002).

^[8] See Rosen (2001), http://www.dai.de/internet/dai/dai-2-0.nsf/dai_publikationen.htm (Status 08/08/2002).

^[9] See Berrar (2001), p.25.

^[10] See Nölting (2000), p.139.

^[11] See Schneider/Strenger (2000), p.106foll.

^[12] See Berrar (2001), p.26foll.

^[13] See Berrar (2001), p.28.

^[14] See Nassauer (2000), p.10foll.

^[15] See this thesis chapter B.I.

^[16] See Matthes (2000), p.4.

^[17] See Berrar (2001), p.27.

^[18] See Matthes (2000), p.7.

^[19] See Hetzer/Papendick (2001), p.96.

^[20] Weighting of the top-ten criteria at the judgement of Corporate Governance (in percent).

^[21] See Lutter (1995), p.16.

^[22] See Lutter (1995), p.16; See Schneider-Lenné (1995), p.44.

^[23] See Merkt (1991), p.135.

^[24] See Nassauer (2000), p.137.

^[25] See Rosen (2001), http://www.dai.de/internet/dai/dai-2-0.nsf/dai_publikationen.htm (Status 08/08/2002).

^[26] The non-managing members of the board of directors show parallels to the supervisory board contemplated in the German law.

^[27] See Schneider-Lenné (1995), p.28.

^[28] See Nassauer (2000), p.139.

^[29] See Schneider-Lenné (1995), p.36.

^[30] See Rosen (2000), p.12; This function is comparable to the German chairman of the supervisory board (Aufsichtsratsvorsitzender).

^[31] See Schneider-Lenné (1995), p.35.

^[32] The position of the chief executive officer is comparable to the German chairman of the management board (Vorstandsvorsitzender).

^[33] See Steindl (1999), p.75.

^[34] See Schneider-Lenné (1995), p.37.

^[35] See Schneider-Lenné (1995), p.37; These cognisances are reserved totally or partly for the general meeting in a German public corporation.

^[36] See Schneider-Lenné (1995), p.36.

^[37] See Nassauer (2000), p.139foll.; Numerous other committees can be formed which cannot be discussed into details in this work.

^[38] The Shareholders’ Meeting is comparable to the general meeting in German public corporations.

^[39] See Merkt (1991), p.327.

^[40] See Nassauer (2000), p.142; See this thesis chapter B.II.2.

^[41] The act on the worker’s participation of 1976, the act on the worker’s participation in the supervisory boards and management board of the mining corporations and of iron and steel producing industry (Montan-MitbestG) of 1951 as well as the Betriebsverfassungsgesetz (BetrVG) of 1952/1972.

^[42] See Nassauer (2000), p.87.

^[43] See Lutter (1995), p.14.

^[44] See the German Aktiengesetz; Important reasons are gross neglect of duty, inability to manage duly or the revocation of confidence by the Hauptversammlung (§ 84 para. 3 rec. 2 AktG).

^[45] See Nassauer (2000), p.88.

^[46] See Berrar (2001), p.49foll.

^[47] See Lutter (1995), p.16foll.

^[48] See Lutter (1995), p.17.

^[49] See Schneider-Lenné (1995), p.43;

^[50] See Matthes (2000), p.21.

^[51] See Schneider-Lenné (1995), p.41.

^[52] See Matthes (2000), p.32.

^[53] See OECD (2002), p.20.

^[54] See OECD (2002), p.15.

^[55] See this thesis table 1, p.9.

^[56] See Hetzer/Papendick (2001), p.94foll.; See this thesis appendix 1, p. 69foll.