"It is positive to see that companies are taking the initiative. They are setting a best-practice standard for good corporate governance and are thus strengthening investor confidence", said Christian Strenger, member of the Supervisory Board of DWS Investment GmbH and member of the German government's Panel on Corporate Governance. A major German shareholder association, the Deutsche Schutzvereinigung für den Wertpapierbesitz (DSW), also welcomed the initiative. "The companies who sign the Declaration on Corporate Governance are making investors the focus of their attention and enhancing the appeal of their equites," said Marc Tüngler of DSW.
The German Corporate Governance Code differentiates between recommendations and suggestions; deviations from the recommendations have to be stated as such by the companies (comply-or-explain principle). The Declaration on Corporate Governance goes beyond the German Corporate Governance Code: It contains all recommendations as well as most of the suggestions and makes these mandatory.
Under the Declaration on Corporate Governance, the companies undertake to reduce the deadlines for the reporting obligation to 45 days for quarterly reports. They facilitate the exercise of voting rights by shareholders in the annual general meeting by providing for an independent representative, transmit parts of the AGM on the Internet and convene an extraordinary general meeting in the event of a takeover offer in indicated cases. In addition, these companies declare their willingness to disclose compensation and remunerations of members of the management and supervisory board individually according to fixed and variable components, to disclose and explain advisory and/or agency services rendered by supervisory board members and, in companies where the supervisory board has more than three members, to establish an Audit Committee, whose chairman must not concurrently be chairman of the supervisory board nor a former member of the management board. This is intended to enhance the competence and effectiveness of the control function in the supervisory board.
Moreover, the companies prepare insider rules/guidelines, including provisions regarding trading windows. These guidelines can also be downloaded from the companies' Web site on the Internet.
The Declaration on Corporate Governance and statements by the signatory companies can be downloaded from the Press Service.
