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Corporate Control in Germany

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Author Info
Schneider-Lenne, Ellen R
Abstract

The article presents the German system of corporate control. Compared with the UK, the number of listed joint-stock companies in Germany is relatively low. The most important shareholders are companies, whereas institutional investors play a minor role. An essential feature of German corporate culture is the concept of the interest of the company as a whole and the long-term approach in pursuing company goals. Joint-stock companies operate under a two-tier structure with a managing board controlled by the supervisory board, the body which plays the central role in corporate governance in Germany. In contrast to what is widely believed, German banks do not dominate companies even though they exert considerable influence through industrial holdings, supervisory board mandates and proxy voting rights in addition to their regular banking business. Control via the market is less pronounced here than in the UK but is growing in importance. Copyright 1992 by Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 8 (1992)
Issue (Month): 3 (Autumn)
Pages: 11-23
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Handle: RePEc:oup:oxford:v:8:y:1992:i:3:p:11-23

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  1. Aleksandra Jovanovic, 2001. "Legal rules, governance structures and financial systems," ICER Working Papers 19-2001, ICER - International Centre for Economic Research. [Downloadable!]
  2. Michael Koetter & Thorsten Nestmann & Stéphanie Stolz & Michael Wedow, 2004. "Structures and Trends in German Banking," Kiel Working Papers 1225, Kiel Institute for the World Economy. [Downloadable!]
  3. Branston, J. Robert & Cowling, Keith & Sugden, Roger, 2002. "Corporate Governance And The Public Interest," The Warwick Economics Research Paper Series (TWERPS) 626, University of Warwick, Department of Economics. [Downloadable!]
  4. William R. Emmons & Frank A. Schmid, 1998. "Universal banking, allocation of control rights, and corporate finance in Germany," Working Papers 1998-001, Federal Reserve Bank of St. Louis. [Downloadable!]
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