Der Deutsche Corporate Governance Kodex 2020

The Government Commission “German Corporate Governance Code” has adopted a completely revised version of the German Corporate Governance Code which will come into force in 2020. In line with international standards, the revised Code recommends that the majority of the shareholder representatives on the supervisory board should be independent of the management board and the corporation. Yet only two of them shall be independent of controlling shareholders. Regarding the remuneration of members of the management board, which was the second major reform theme, the revised Code foresees a remuneration model with far-reaching terms on substance and procedure. It is an improvement that the earlier recommendation for an additional corporate governance report has been deleted. Instead, the revised Code strengthens the statutory corporate governance statement, which will henceforth become the new central reporting instrument. While details are open to criticism, the revised Code lives up to internationally agreed standards. Moreover, the code has considerably benefited from the transparency of the consultation process which preceded the revision.