If it was a debate, this week provided arguments both for and against the resolution that: “Germany’s corporate governance is improving”. For the proposition, Heinrich von Pierer’s resignation as supervisory board chairman of Siemens is evidence of a heightened sense of responsibility – in the past, some executives have tended to ride out scandals. The opposing team would argue that the re-election of Ferdinand Piëch, Volkswagen chairman, and his expanding power, show that governance remains flawed.
Who is right depends on the audience. For shareholders who believe that transparency and accountability increase returns, some German companies still lag their international peers. For example, it was only when Siemens had to file in the stricter US market that the extent of its troubles was revealed. But for employees and politicians who desire work place harmony and social cohesion, structures such as two-tier boards provide some comfort that all stakeholder views are represented.
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