Germanyâ€™s Corporate Governance Reforms: Has the System Become Flexible Enough?
This article reviews Germany's corporate governance system and the effectiveness of recent reforms. Since the early 1990s far-reaching reforms have complemented the traditional stakeholder system with important elements of the shareholder system. Instead of taking a view on the superiority of either system, this article raises the important question whether these reforms created sufficient flexibility for the market to optimize its corporate governance structure within well established social and legal norms. It concludes that there is scope for enhancing flexibility in three core areas, relating to (i) internal control mechanisms, especially the flexibility of board structures; (ii) self-dealing; and (iii) external control, particularly take-over activity.
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- Conac Pierre-Henri & Enriques Luca & Gelter Martin, 2007. "Constraining Dominant Shareholders' Self-Dealing: The Legal Framework in France, Germany, and Italy," European Company and Financial Law Review, De Gruyter, vol. 4(4), pages 491-528, December.
- Denis, Diane K. & McConnell, John J., 2003. "International Corporate Governance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 1-36, March.
- Lopez-de-Silanes, Florencio & Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei, 2008.
"The Law and Economics of Self-dealing,"
2907526, Harvard University Department of Economics.
- Tirole, Jean, 2001.
Econometric Society, vol. 69(1), pages 1-35, January.
- Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
- Allen, Franklin & Carletti, Elena & Marquez, Robert, 2007.
"Stakeholder capitalism, corporate governance and firm value,"
CFS Working Paper Series
2007/26, Center for Financial Studies (CFS).
- Franklin Allen & Elena Carletti & Robert Marquez, 2009. "Stakeholder Capitalism, Corporate Governance and Firm Value," Economics Working Papers ECO2009/10, European University Institute.
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