DOI: 10.21637/GT.2015.4.04.

Acceptance of Corporate Governance in Germany and Austria

WAGNER, Johannes Martin

Corporate governance principles comprise significant laws imposed by legislature as well as nationally and internationally recognized regulations set out by companies’ owners. They aim at providing a solid and lawful basis for directing and controlling corporate affairs. More than ten years ago, these principles were specified in form of national corporate governance codes in many European countries and have been constantly redefined since then. This paper features an analysis of the current acceptance of corporate governance codes among the largest German and Austrian stock-listed companies. The analysis is based on data provided by the companies in their corporate governance reports of fiscal year 2014. I find that the Austrian code acceptance rate of 98.3% surpasses the rate of 97.2% in Germany. Simultaneously, the average amount of code deviations per company in Austria (1.5) is considerably lower than the German figure (1.8). In Germany, the most quoted deviation applies to the severance pay cap for management. Deviations quoted the most in Austria refer to the setup of management board’s compensation, the existence of a nomination committee, supervisory board’s prohibition to assume functions on competitors' boards, as well as audit assessments of the effectiveness of the company’s risk management.

KEYWORDS: corporate governance, management, supervisory board, code of corporate governance, Austria, Germany, GRC
JEL Codes: M12, M14, M16

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