The Corporate Governance Code as a bulwark against investors who pursue their own interests? A replica of Deutsche-Bank Supervisory Board member Stefan Simon.


The Deutsche-Bank supervisory board Stefan Simon last week took the side of the code critics: the “harsh criticism” of the government commission’s reform proposal is “justified” in many respects, he wrote in a commentary for the Handelsblatt.

At the same time, he warned against efforts “now to bury the Code and the Commission”. This would “throw out the baby with the bath water”, fears Simon, who also sees the Code as a counterweight to voting rights advisors, institutional investors, asset managers and activist shareholders who want to approach companies with “disparate intentions” and give them guidelines on corporate governance.

The German Corporate Governance Code (DCGK) as a bulwark against investors pursuing their own interests? This is undoubtedly an interesting approach, but it already fails because it is significantly influenced by investors: They are strongly represented in the Government Commission DCGK, while important industries are not represented at all.

How investors force rules on decision-makers

What the author also forgets or does not address: The Commission needs a work mandate – but who has the legitimacy to issue it? And how far can it go if we do not want to interfere in the entrepreneurial freedom of companies and their executive bodies?

For Simon’s approach to work, we don’t have to “bury” the Commission, but give it a new mandate – and finally make it a body that represents the interests of the whole economy (not individual stakeholders). Only in this way can the Code become a self-commitment again, as intended.

Decision-makers in companies must finally realise that investors are about to take the helm and impose their “code of conduct” or the rules of the game on our listed companies. What was for a long time a timid undertaking (e.g. in the form of the demand that supervisory boards also talk to investors) is today much more concrete and comprehensive.

Nevertheless, the majority of the supervisory boards and board members seem to surrender to their fate without any resistance (“it’s just the way it is”, “there’s nothing you can do”, “it will take care of itself”, “I have more important things to do”, and so on).

Supervisory boards must finally show solidarity

I think it’s amazing….

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