Corporate Governance aktuell – “CEO Letter”: How Larry Fink discloses the weaknesses of the German Corporate Governance Code

Larry Fink

BlackRock CEO Larry Fink recently wrote his annual letter to the CEOs, and this week I finally got to read it: Fink calls, among other things, for managers to assume more social responsibility and to focus more on the purpose of the company.

This shows that institutional investors have completely different expectations than a few years ago. And I inevitably asked myself: Does the German Corporate Governance Code (DCGK) actually help German companies to meet these expectations? Since the government commission is persistently focusing on investors, this should actually be the case.

But it’s not. After all, what Fink expects cannot simply be translated into detailed tick-off recommendations. He and more and more other investors are concerned with fundamental questions of corporate and management culture. And for this, entrepreneurs, supervisory boards and board members need attitude, but certainly not long catalogues with patronizing and bureaucratic requirements.

We demand a stop to code reform

A small codex is thus an anachronism from a time when the world appeared more orderly and the digital transformation was still a music of the future. We therefore urgently need to rethink – in the interests of companies and the business location, but also because of completely new investor expectations.

My VARD comrades-in-arms and I have therefore called on the Government Commission in our current statement to stop the reform process and withdraw the draft code. In addition, we will initiate a comprehensive discussion and dialogue process to develop a code worthy of the name. All interested parties are cordially invited – including Larry Fink and his German governor Friederich Merz, of course.

Any additions, comments, objections? I look forward to your feedback: dehnen@vard.de

Editorial by Peter H. Dehnen -> About the Person.