Germany's Corporate Governance Reforms: Has the System Become Flexible Enough?

Author/Editor: Odenius, Jürgen
Publication Date: July 01, 2008
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This article reviews Germany's corporate governance system and the effectiveness of recent reforms. Since the early 1990s far-reaching reforms have complemented the traditional stakeholder system with important elements of the shareholder system. Instead of taking a view on the superiority of either system, this article raises the important question whether these reforms created sufficient flexibility for the market to optimize its corporate governance structure within well established social and legal norms. It concludes that there is scope for enhancing flexibility in three core areas, relating to (i) internal control mechanisms, especially the flexibility of board structures; (ii) self-dealing; and (iii) external control, particularly take-over activity.
Series: Working Paper No. 08/179
Subject(s): Germany | Corporate governance | Economic reforms | Securities regulations

Author's Keyword(s): Corporate governance | internal control | self-dealing | external control
Publication Date: July 01, 2008
Format: Paper
Stock No: WPIEA2008179 Pages: 19
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