A plenary meeting of the Government Commission was convened on November 7, 2002 to review the German Corporate Governance Code against the background of national, European and international developments and taking into consideration the status of the public discussion. The Government Commission came to the conclusion that questions of good corporate governance have gained further importance in Germany and abroad. In this connection it was agreed that the German Corporate Governance Code has met with a high level of acceptance and German companies are currently working intensively on the preparation of their first declaration of conformity with the Code.
In the plenary meeting on November 7, 2002 topics discussed included principles for appropriate and transparent executive board compensation (including stock options), the appropriate level of the deductible for D & O-insurance, appropriate supervisory board compensation, and questions relating to committee work. In its next meeting, the Government Commission will continue to focus especially on these issues.
Following the introduction of the German Corporate Governance Code, legislation on the disclosure of the sale and acquisition of company shares by executive board and supervisory board members (directors’ dealings) was introduced in Art. 15 a of the Securities Trading Law (WpHG). As a result, the Code’s recommendation on this (section 6.6 par. 1) became dispensable. It is to be replaced in the Code by a description of the new Art. 15 a WpHG. The new wording of section 6.6 par. 1 of the Code is now:
- “The purchase or sale of shares in the company or of related purchase or sale rights (e.g. options) and of rights directly dependent on the stock market price of the company by members of the management board and supervisory board of the company or its parent company and by related parties shall be reported without delay to the company. Purchases based on employment contracts, as a compensation component as well as immaterial purchase and sale transactions (EURO25,000 in 30 days) are excepted from the reporting requirement. The company shall publish the disclosure without delay.”
The declaration requirement under Art. 161 of the Stock Corporation Act (AktG) on the previous Code recommendation thus expires as soon as the Code amendment has been published in the electronic Federal Gazette by the Federal Justice Ministry. Publication is expected to be effected before the end of November 2002.
Dr. Jürgen Claassen
Corporate Communications and Central Bureau
Phone: +49 (2 11) 8 24-36 00 1
Fax: +49 (2 11) 8 24-36 00 5