The German Corporate Governance Code: Experience From the Years 2002-2009
HHL Research Paper Series in Corporate Governance No. 1
Zeitschrift für Corporate Governance, 20011 (different title)
11 Pages Posted: 13 Dec 2010 Last revised: 17 Jul 2011
Date Written: August 6, 2010
Due to the numerous corporate scandals during the late 90s, in September 2001 the German Ministry of Justice appointed the "Government Commission German Corporate Governance Code" to develop a code of best practice. The first version of the German Corporate Governance Code was passed at February 26, 2002. Since then the code adopts a comply-or-explain principle. In a broad study we evaluate which companies comply with the German Corporate Governance Code and whether high levels of compliance are rewarded by the capital market. In the empirical analysis, we find that that (i) firms with high level of free float conform the most to the code and (ii) that the capital market rewards only these firms, i.e. firms with high levels of free float, for high levels of compliance.
Note: Downloadable document is in German.
Keywords: corporate governance, soft regulation, Germany, German corporate governance code
JEL Classification: G34, G30, G38
Suggested Citation: Suggested Citation