http://www.faz.com/IN/INtemplates/eFAZ/default.asp
Decent conduct
By Anke Bryson
Those who thought the Anglo-American model of corporate governance was superior to the German model thought again when Enron blew up. Now, after more than a year of soul-searching, a U.S. commission is proposing a change that would give U.S. corporate governance a distinctly German element: the separation of chairman and CEO. Not that long ago, many believed a combination of both roles in one person to be superior because it made for more effective leadership. Now they fear that it may leave too much scope for mismanagement.
The move comes at a time when German companies are busy embracing international corporate governance standards. For the first time in 2002, German listed companies had to state whether they adhere to a code of good conduct that includes some distinctly Anglo-American elements summed up under the concept of "transparency."
It was a formality for Germany's big international players which have long improved their corporate transparency and aligned their reporting practices with international standards. Few Dax-30 companies thus reported deviations from the code's core recommendations. Daimler Chrysler, SAP and Siemens shunned a personal liability element in their directors & officers insurance policies. SAP and Adidas rejected the recommended upper age limit for board members. Allianz, with its large industrial portfolio, will continue to allow its board members to hold more than five external supervisory board positions.
And most German companies remain reluctant to publish the salaries of individual board members. Although included in the code, companies can shun this recommendation without having to explain their motivations. Meanwhile, smaller listed companies are taking longer to adapt their structures. In particular, many are still ill-prepared for the switch to International Accounting Standards, which will be mandatory in the EU from 2005.
The corporate governance code is supposed to work through market pressure. That, however, requires that market participants check out companies' adherence to the code's and subsequently punish underperformers with share price discounts and reward the star pupils with premiums. For the moment, there is little sign of such pressure. The code's complicated distinction between "shall," "should" and "may" recommendations makes it tricky for investors to arrive at a clear verdict - except perhaps the general one that the Germans have fared quite well with the separation of management and its supervisors.
Jan. 17