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Shareholder wealth vs. stakeholder interests? Evidence from code compliance under the German corporate governance code

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  • Haar, Brigitte

Abstract

In order to better differentiate the drivers of corporations' actions, in particular shareholder wealth and stakeholder interests, the paper explores the significance of the comply or explain-principle and its underlying enforcement mechanisms more generally. Against this background, compliance rates with specific provisions may shed a light on companies' reasons for following the code. An analysis of these rates at the example of distinct provisions of the German Corporate Governance Code is therefore entered into. In light of the current corporate governance debate and the legitimacy problems that are raised, among the code provisions that exemplify these questions very well are those regulating incentive pay, severance pay caps, and age limits for supervisory board members. Their analysis will lay a basis for an answer to the question about what motivates companies to comply with the code. The motivation then paves the way to arrive at a further specification of the determinants of the regulatory evolution of the Code and the range of stakeholders and their concerns that enter into it.

Suggested Citation

  • Haar, Brigitte, 2016. "Shareholder wealth vs. stakeholder interests? Evidence from code compliance under the German corporate governance code," SAFE Working Paper Series 154, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:154
    DOI: 10.2139/ssrn.2875275
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    Cited by:

    1. Sergey Sinelnikov-Murylev & Alexandr Radygin (ed.), 2018. "Russian Economy in 2017. Trends and Outlooks. In Russian," Books, Gaidar Institute for Economic Policy, edition 1, volume 39, number re39-2017-ru, November.
    2. Sergey Sinelnikov-Murylev & Alexandr Radygin (ed.), 2018. "Russian Economy in 2017. Trends and Outlooks. (Issue 39) In English," Books, Gaidar Institute for Economic Policy, edition 1, volume 39, number re39-2017-en, November.

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    More about this item

    Keywords

    corporate governance codes; soft law; stakeholder; shareholder wealth; market enforcement; German corporate governance; supervisory board; incentive pay; severance pay caps; age limits;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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