Corporate governance

from Wikipedia, the free encyclopedia

Corporate governance (German: principles of corporate management) is the legal and factual framework for the management and supervision of companies for the goodwill of all relevant stakeholders . As a stakeholder approach (all stakeholder groups) it goes beyond the narrower shareholder approach (stakeholder group shareholders), but includes it.

The regulatory framework is largely determined by the legislator and owner. The specific design is the responsibility of the supervisory or administrative board and company management .

The company-specific corporate governance system consists of the entirety of relevant laws, guidelines, codes, letters of intent, corporate mission statement, and the habits of corporate management and supervision.


So far, there is no uniform understanding or definition of what corporate governance exactly means or includes worldwide. In general, corporate governance can be understood as the totality of all international and national rules, regulations, values ​​and principles that apply to companies and determine how they are managed and monitored. In the literature there is regular discussion (even if this is seldom explicitly stated) about good corporate governance or the improvement of existing corporate governance.

Characteristics of good corporate governance:

  • dealing with risks appropriately
  • formal, transparent process for proposing and electing board members (e.g. involving a wide range of people)
  • functional management
  • no cross-involvement between the remuneration committees of different companies
  • Management decisions are geared towards long-term value creation
  • Transparency in corporate communication
  • Protecting the interests of different groups (e.g. stakeholders)
  • Targeted cooperation between company management and supervision

Corporate governance is very complex and includes mandatory and optional measures: observing laws and regulations ( compliance ), following recognized standards and recommendations as well as developing and following your own company guidelines . Another aspect of corporate governance is the design and implementation of management and control structures.

Good corporate governance ensures responsible, qualified, transparent management geared towards long-term success and should serve the organization itself, its owners, but also external interest groups (donors, sales and procurement markets, society, the citizens).

In addition, there have been efforts for some time to make the idea of ​​corporate governance usable for other organizations in the public and semi-private sector, e.g. B. for cooperatives ( cooperative governance ), foundations , associations ( non-profit governance ) or public companies and institutions ( public corporate governance ). With regard to sustainability , the term governance is increasingly being used for resource use and infrastructure in network industries ( water governance , infrastructure governance ).

Corporate governance is not an internationally standardized set of rules, but apart from a few internationally recognized, common principles, a country-specific understanding of responsible corporate management. In addition to country-specific corporate governance provisions, there are also cross-border, industry-specific regulations.

Differentiation from the term management

Corporate governance and management are often translated using the same term “corporate governance”. This translation does not apply to corporate governance. Management is corporate management, which is also possible without taking corporate governance rules into account. Corporate governance, on the other hand, is “responsible corporate management and control”.


The starting point for the declaration and introduction of corporate governance lies in the 1930s, when the divergence between shareholder interests and corporate management was first recognized. An important book on this was published in 1932 under the title The Modern Corporation and Private Property by Adolf Augustus Berle and Gardiner C. Means .

The term first appeared under this title in 1976, but only became known through the Cadbury Report (1992), the Greenbury Report (1995) and the Hampel Report (1998), which reported on practical experiences with it.

These reports promoted efforts by companies around the world to put their principles of good corporate governance (see also: Good Governance ) on paper. These principles spell out a the main legal rules on corporate governance and monitoring and the other mere recommendations such as the accounting and audit or the work of the executive board and the supervisory boards (z. B. Supervisory Board ) of the company.

Theoretical foundations: The principal-agent theory in corporate management

The principal-agent theory can be used as an economic model of the new institutional economics to identify and solve problems of delegation, information and incentives in the area of ​​corporate governance. The aim is to improve the overall economic benefit of all those involved and to explain the actions of people in a hierarchy in a sustainable manner.

In this model, the client appears as a so-called principal and the agent as a so-called agent. The principal-agent relationship in which the agent acts on behalf of the principal results from the fact that ownership on the principal's side and the agent's authority to act are separate from one another. A so-called agency conflict arises because the agent naturally pursues the maximization of his own benefit after assuming Homo oeconomicus and thus creates a conflict of interests between principal and agent.

Another basis is an asymmetrical distribution of information between the market players. The contrast to the symmetrical distribution of information is represented by the principles of neoclassics . The principle of asymmetrical information distribution can inevitably lead to various delegation and coordination problems.

The principle of Homo oeconomicus , i.e. behavior that maximizes utility, is also the basis of the principle-agent theory model . The alternative course of action with the greatest net advantage is always chosen, with simultaneous opportunistic action and limited individual rationality . Striving to maximize utility inevitably leads to conflicting interests between principal and agent. Therefore, the verifiability of the contractual elements in the principal-agent relationship is very important in terms of conflicts of interest.

The opportunistic behavior to the detriment of the principal is based on the agent's room for maneuver. The imperfect level of knowledge essentially results from the fact that an actor can acquire knowledge, but does not always have all the relevant information available or can process it promptly. The opportunistic behavior can go beyond the pure maximization of benefits and, if necessary, also include fraudulent behavior, deception and stealing.

The relationship between the principal and the agent can come about, for example, through a contract . Under certain circumstances, however, influencing one person by others is sufficient without a specific mandate (e.g. behavior of one person that disturbs the other). What is crucial is the exertion of external effects on another person. However, the contractually fixed principal-agent relationship is the typical model of economic activity.

Problems from the agency relationship result from the four information asymmetries properties ( hidden characteristics ), intentions ( hidden intentions ), information ( hidden information ) and the actions ( hidden actions ) of the agent at the expense of the principal.

The term moral hazard comes from the insurance industry and describes the risk that a policyholder will behave less prudently after signing a contract. With regard to the above-mentioned information asymmetries between agent and principal, this term can be regarded as a consequence for the information asymmetries. The agent's moral attitude towards his counterpart plays the decisive role in the principal-agent theory. The risk of deliberately brought about disadvantage of a contractual partner is always given due to the model assumptions of Homo Economicus and opportunistic behavior. This is exacerbated by the fact that the principal cannot follow the action commissioned by the agent and the agent's level of self-performance when processing tasks is also influenced by external things. Linking the end result with the agent's performance is therefore only feasible to a limited extent.

Approaches to solving information asymmetries consist of so-called signaling, screening or the use of specific incentives and controls (self selection, reputation, etc.).

Furthermore, so-called agency costs arise . These consist of steering and control costs, which try to represent the efforts of the principal to reduce his own information disadvantage. These can be broken down into costs of contract conclusion and monitoring as well as welfare losses resulting from the agency conflict. The level of agency costs depends on the size of the agent's options for action, which grow with the increasing information asymmetries and powers of the agent. The intensity of the general conflicts of interest in the principal-agent relationship also plays a role in the amount of agency costs.

Residual costs arise from the elimination of deviations from the ideal situation between the first-best solution and the second-best solution. The deviation from the ideal situation arises from existing information symmetries.

Signaling costs represent the effort made by the agent himself to reduce information asymmetries.

It can be summarized that through appropriate and goal-oriented corporate governance, a reduction in agency costs can be aimed for by reducing conflicts of interest and information asymmetries. The incentive systems described above can also be used to reduce conflicts of interest and to minimize the agent's information advantage through the solution approaches for eliminating the information asymmetries. In this way, for example, the interests of the investors can be aligned with those of management.

One criticism of the principal-agent theory is that only the behavior of the agent can be opportunistic. Thus, the model is only viewed from the principal's point of view.

National regulations


In Germany , the corporate governance principles have been set out in the German Corporate Governance Code . A government commission set up by the Federal Ministry of Justice in September 2001 passed this code on February 26, 2002. In addition to the presentation of essential legal regulations on corporate governance and publicity, the code contains numerous recommendations and suggestions for the management and supervision of listed companies .

The legal basis of corporate governance is the Stock Corporation Act (AktG). Significant legal initiatives related to corporate governance are, for example, the law on control and transparency in the corporate sector (KonTraG, 1998), the law on further reform of stock corporation and accounting law, transparency and publicity (TransPuG, 2002), the accounting law reform law (BilReG , 2004) and the Management Board Compensation Disclosure Act (VorstOG, 2005).

The question of the content of the action and management maxims is to be answered in particular according to the case law of the Federal Court of Justice in the Mannesmann trial with reference to the company's interests. The interests of the shareholders and employees constitute the minimum interests that are to be used to define the company's interests. According to the current supreme court case law, the company's interests limit the exercise of discretion by the management board in accordance with Section 76 (1) AktG.

The Federal Ministry of Finance has endeavored since 2007 to explicitly expand the scope of action to include public-sector companies and companies with public participation by publishing a Public Corporate Governance Code .


Among other things, there is the Loi de Sécurité Financière from 2003. Two corporate governance codes are of particular relevance. The Afep-Medef Codex is used by large publicly traded companies, while the MiddleNext Codex is designed for smaller publicly traded companies. Both are based on the comply or explain principle : users may disregard individual recommendations as long as they give sufficient reasons for this decision.

Great Britain

The Cadbury Report (1992), the Greenbury Report (1995) and the Hampel Report (1998) form the basis for corporate governance in Great Britain.

The Turnbull Report, which is authoritative for listed companies today, will be revised in 2005 by the Flint Commission.

The Stewardship Code was also published in July 2010.


In addition to the CoCo control model (1995), there are other specific guidelines and instruments that are being developed by the CICA's Risk Management and Governance Board.


In 2003 the Tobacco Leaf Code was published in the Netherlands . The code contains over 100 measures for the management and supervision of listed companies.


The situation in Austria is similar to that in Switzerland. The Austrian “Working Group for Corporate Governance” has drawn up the Austrian Corporate Governance Code. If a company wants to be listed on the Vienna Stock Exchange, it must agree to comply with this code. The code includes:

  • L-rules: are copied from various laws, therefore binding anyway ( Law ),
  • C-rules: if a company deviates, it must justify it ( comply or explain ), the "maximum penalty" is that the company loses its listing on the stock exchange, and
  • R rules: Recommendations with no particular impact for a company that does not comply with the rule ( recommend ).


The conditions for admission to trading on the SIX define a number of minimum corporate governance requirements for companies. In 2003, the University of Zurich conducted a study on behalf of SIX to check compliance with SIX's corporate governance guidelines. At that time, 85% of the guidelines had been implemented. If information is not disclosed, this must be justified individually and substantively.

The Swiss Code of Best Practice (or “Swiss Code” ) from the umbrella organization of the Swiss economy ( economiesuisse ) has also existed since July 1, 2002 . This lists the rules of conduct that are necessary for exemplary corporate governance. The application of the code is voluntary. This Swiss Code of Best Practice was expanded in 2007 to include ten recommendations on the remuneration of board members and top management.

At the federal level, the Federal Council adopted the corporate governance report on September 13, 2006. The report answers the following questions in detail:

  • Which tasks of the central federal administration are suitable for outsourcing? (→ task typology);
  • How are the companies entrusted with the fulfillment of these tasks to be legally designed and managed? (→ 28 guiding principles);
  • How should the federal government organize itself internally when it comes to safeguarding its owner's interests? (→ Principles for the allocation of roles).

By linking the typology of tasks and guiding principles, the corporate governance report creates a model that guarantees the fulfillment of federal tasks in the public interest even after they have been outsourced and ensures the coherent management of federal companies. More detailed explanations of the 28 principles can be found in an explanatory report by the Federal Finance Administration.

In 2007, Articles 663b bis and 663c were introduced in the Swiss Code of Obligations (OR) . These require companies to be transparent about the remuneration of members of the board of directors and management. As a result of this regulation, the remuneration of the management bodies has to be shown in the annual report since 2007.

Further legal bases relating to corporate governance are being promoted within the framework of the reform of company law. At the end of 2005, the Federal Council opened the consultation process for the revision of company law and accounting law. In 2007, he had a message drawn up from the consultation results, which was adopted at the end of 2007. The primary aim of the reform of stock corporation law was to strengthen shareholders' rights.

In February 2008, Thomas Minder submitted the federal popular initiative “against rip-off”. In particular, the initiative contains provisions on the compensation of management members, which should apply to Swiss public limited companies listed in Switzerland and abroad. At the end of 2008, the Federal Council decided to transform the current reform of company law into a counter-proposal to the Minder Initiative . This is despite the fact that the stock corporation law reform was not primarily about compensation. The Federal Council's message was adapted and given an additional message. Following the acceptance of the Minder initiative by the Swiss voters in March 2013, the transitional regulation of the Ordinance against Excessive Compensation in Listed Stock Companies (abbreviated VegüV) will apply until the parliamentary debate leads to a more comprehensive revision of company law.

United States

Form the basis u. a. the based on the work of the Treadway Commission COSO - control model COSO ICF (1992), updated as COSO ICIF (Internal Control - Integrated Framework) in 2013 and the complementary risk management framework model COSO ERM (2004). These models are also internationally recognized; they are the basis of the nationally implemented International Standards on Auditing (ISA) of the International Federation of Accountants (IFAC). The Sarbanes-Oxley Act (SOX) has been binding for all companies that are listed on one of the US stock exchanges since 2002 . The US Public Company Accounting Oversight Board (PCAOB) has published further rules that are used by listed companies in the implementation and review of corporate governance resp. organizational instruments (ICS, ERM) must be taken into account.

International regulations


The G20 / OECD principles of corporate governance were first published in 1999 and updated in 2004 and 2015.

Financial service providers

At the end of 1974 the central banks of the G10 countries founded the “ Basel Committee on Banking Supervision” in the Bank for International Settlements .

The " Core Principles of Effective Banking Supervision", revised by BIS in 2006, and the associated Core Principles Methodology outline the requirements that banking supervision must place on the management of a financial service provider.

Public institutions

In addition to the existing corporate governance guidelines intended for the private sector , the OECD adopted a guideline for public institutions in May 2005; these proposals were prepared with representatives from INTOSAI and EUROSAI .

European Union

At the European level, the EU Commission set up a “European Corporate Governance Forum” in October 2004 to examine the best practices in the member states. This forum is intended to promote the convergence of national corporate governance codes and advise the Commission. Fifteen experts with different professional backgrounds belong to the forum. The members of the forum are appointed for 3 years.

In April 2011 the Commission presented the Green Paper on the European Corporate Governance Framework , proposing various innovations, in particular in the area of ​​shareholder participation and the appointment of board members. The aim is to change the short-term thinking of the shareholders on the one hand and the structure of the board of directors, in particular with regard to the introduction of a quota for women and a greater variety in selection, on the other.

The Commission's proposals are the subject of controversial discussion among experts. In the opinion of many experts, the inclusion of a diversity clause in the code in particular constitutes a violation of the subsidiarity principle of the European Union, because it allows the Commission to penetrate deeply into member state structures, for which there is no basis for authorization . In addition, the need for a Europe-wide corporate governance framework is being called into question.

Overall, however, the Commission and the expert groups agree that there is a need for action in some areas of corporate governance. Accordingly, legal changes are to be expected in this area in the future.

Social area

The subject of corporate governance, as well as good and transparent corporate management, is also becoming more and more important in the social economy and thus in institutions and bodies in the social sector. The Diakonisches Werk has issued the Diaconal Corporate Governance Code. The Caritas institutions are recommended to use the working aid of the German Bishops' Conference for Catholic social institutions and economic supervision as a guide. However, it is not only the large sponsors who develop such codes, but also smaller ones, such as Lebenshilfe, for example, place the subject more in the spotlight.

Recently, there have also been calls from politicians calling for a general code for the social economy. This is primarily intended to create more transparency in the use of funds and donations, but also to regulate how supervisory bodies are to be filled.

History of language and concepts

In English, governance is an old term used in general political language for describing, assessing and comparing the manner in which the state acts in government (see John Fortescue, The Governance of England , London 1470). It was linguistically in competition with government , which can mean "to govern" (in the sense of a substantiated verb, also: the governing ) and "the government" (in the sense of an institution). Governance seems to have become increasingly less used and viewed as out of date in the 20th century.

From 1976, governance in the US business language has been revived in the compound term corporate governance with the new meaning of responsible corporate management. It was received and distributed not only in English, but worldwide, also in German business terminology. A decade later, the World Bank , headquartered in the USA, introduced governance in the new composition of "good governance" with the meaning of good governance in the technical language of international development policy and aid, thus coining a widespread term in today's world language. It is not only chronologically that the conclusion that “good governance” has grown out of the success of “corporate governance” emerges.

Governance has now broken away from these parallel, technical and normative terms and has returned to the general language of historians and political science as an independent descriptive term. “Corporate governance” and “good governance” are today to be classified as foreign words in the German language due to their widespread use.

See also


  • A. Arlt, C. Bervoets, K. Grechenig, S. Kalss: The European corporate governance movement. GesRZ special issue 2002, pp. 64–80.
  • Gerhard Schewe: corporate constitution. Corporate governance in the area of ​​tension between management, control and representation of interests. Springer, Berlin 2005, ISBN 3-540-24517-0 . (Springer textbook).
  • Klaus J. Hopt, Gunther Teubner (Ed.): Corporate Governance and Director's Liabilities. Legal, Economic and Sociological Analyzes on Corporate Social Responsibility. De Gruyter, Berlin 1985, ISBN 3-11-010027-4 .
  • Klaus Hopt, Axel von Werder: Corporate Governance Manual - Management and Monitoring of Listed Companies in Legal and Economic Practice. Schäffer-Poeschel Verlag, 2016, ISBN 978-3-7910-2596-4 .
  • Frank Keuper, Fritz Neumann (Ed.): Corporate Governance, Risk Management and Compliance. Gabler, Wiesbaden 2010, ISBN 978-3-8349-1558-0 .
  • Willi Schoppen (Ed.): Corporate Governance. History - Best Practice - Challenges. Campus Verlag, Frankfurt am Main / New York 2015, ISBN 978-3-593-50513-8 .
  • Martin K. Welge, Marc Eulerich: Corporate Governance Management. Gabler, Wiesbaden 2012, ISBN 978-3-8349-3003-3 .
  • Lutter, Marcus / Bayer, Walter / Schmidt, Jessica: European corporate and capital market law. Basics, status and development along with texts and materials. § 13 Corporate Governance in the EU, De Gruyter, Berlin 2017, ISBN 978-3-11-045625-7 .
  • Jung, Stefanie / Krebs, Peter / Stiegler, Sascha: Company law in Europe. Manual. Section 33 European Corporate Governance, Nomos, Baden-Baden 2019, ISBN 978-3-8329-7539-5 .

Web links

Individual evidence

  1. Corporate governance - definition in the Gabler business dictionary
  2. Jamal Ibrahim Haidar: Investor protections and economic growth . In: Economics Letters. Volume 103, No. 1, Elsevier, April 2009, pp. 1-4.
  3. ^ Digitized online at .
  4. a b Yuldon gyana Tshang: Corporate Governance in organizational complexity. An empirical study of moderating effects in German stock corporations . Ed .: Hagen Lindstädt. tape 29 . Rainer Hampe Verlag, Munich 2011, ISBN 978-3-86618-717-7 , pp. 13 .
  5. Peter-Jürgen Jost (Ed.): The principal-agent theory in business administration . Schäffer-Poeschel, Stuttgart 2001, ISBN 978-3-7910-1777-8 , pp. 15 .
  6. Reinhard Heyd, Michael Beyer (ed.): The principal-agent theory in finance: analyzes and possible applications in practice . Erich Schmidt Verlag GmbH & Co KG, Berlin 2011, ISBN 978-3-503-12991-1 , p. 20 .
  7. R. Heyd, M. Beyer (ed.): The principal-agent theory in finance: analyzes and possible applications in practice. Erich Schmidt Verlag GmbH & Co KG, Berlin 2011, ISBN 978-3-503-12991-1 , p. 32 .
  8. ^ S. Bress: Corporate Governance in Germany: the influence of the German Corporate Governance Code on the financial company performance . tape 54 . Josef Eul Verlag GmbH, 2008, ISBN 978-3-89936-643-3 , p. 16 ff .
  9. ^ YG Tshang: Corporate Governance in Organizational Complexity: an empirical study of moderating effects in German stock corporations. Ed .: Hagen Lindstädt. tape 29 . Rainer Hampp Verlag, Munich 2011, ISBN 978-3-86618-617-0 , pp. 14 .
  10. Principles of good corporate and investment management in the federal area ( Memento of February 21, 2014 in the Internet Archive ),
  11. LOI n ° 2003-706 du 1er août 2003 de sécurité financière, LSF
  12. Code de gouvernement d'entreprise des sociétés cotées. (No longer available online.) In: Archived from the original on July 29, 2016 ; Retrieved July 29, 2016 .
  13. MiddleNext: Code MiddleNext de gouvernement d'entreprise pour les valeurs moyennes et petites. (PDF) 2009, archived from the original on March 31, 2016 ; Retrieved on July 29, 2016 (français).
  14. Christine A. Mallin: Handbook on International Corporate Governance: Country Analyzes. 2011, Edward Elgar Publishing, ISBN 978-1-84980-123-2 , pp. 105 ff.
  15. Austrian Working Group for Corporate Governance ( Memento from January 14, 2006 in the Internet Archive )
  16. Corporate Governance Guidelines (DCG) of SIX ( Memento of 7 July 2012 in the Internet Archive )
  17. Conrad Meyer: Study on the Practical Implementation of Corporate Governance ( Memento from July 28, 2014 in the Internet Archive ) (PDF; 768 kB). SIX Swiss Exchange, Zurich 2003.
  18. Swiss Code of Best Practice ( Memento of November 4, 2009 in the Internet Archive )
  19. CG report of the Federal Council of September 13, 2006
  20. ^ Federal Office of Justice: Message on the amendment of the Code of Obligations. Federal Justice and Police Department, Bern 2007.
  21. ^ Federal popular initiative «Against rip-offs»: Initiative text ( Memento of February 14, 2010 in the Internet Archive ) (PDF).
  22. G20 / OECD Principles of Corporate Governance. New version 2015 (PDF; 802 kB).
  23. European Commission: Green Paper: European Corporate Governance Framework (PDF; 131 kB) , 28 pages.
  24. Joachim Jahn: Brussels is tackling corporate governance. In: The corporation. No. 12, 2011. Verlag Dr. Otto Schmidt, ISSN  0002-3752 , pp. 454-459.
  25. Diaconal Corporate Governance Code (PDF; 56 kB).
  26. Corporate Governance - Transparent work on ( Memento from January 22, 2010 in the Internet Archive )
  27. Corporate Governance Code of Lebenshilfe ( Memento from July 6, 2009 in the Internet Archive )
  28. Code for the Social Economy | consilia :: blog ( Memento from October 20, 2012 in the Internet Archive )