Greater transparency, higher ethical standards and a focus on sustainability from investors are all key recommendations from the body charged with amending Germany’s Corporate Governance Code (DCGK).
Following a consultation last year, the Regierungskommission Deutscher Corporate Governance Kodex (the Corporate Governance Code Commission) has published its final amendments to DCGK.
The revised preamble explains that good governance, based upon a social market economy, requires more than adherence to the law: it requires ethical behaviour from the “honourable business person”.
The preamble also stresses what is expected from institutional investors: that they should exercise their rights actively and responsibly, respecting the concept of sustainability.
In a bid to increase transparency in the realm of compliance, the commission also introduced a new requirement for boards to introduce a “compliance management system”. Companies will be required to publish the basic features of this system to allow investors—as well as the interested general public—to form their own opinion of a company’s compliance efforts.