The German two-tier board and the German corporate governance code

This paper deals with some interesting recent corporate governance developments in Germany. The focus is in particular on the German Corporate Governance Code, its parts, layout and how it deals with the various organs of German public corporations. The German Code is quite unique since it applies a Code of Good Practice to a two-tier board system, thus making it necessary to deal with the role and functions and the relationship between the management and the supervisory board. This paper concludes that several changes to the German law relating to public corporations since the middle of the 1990s and the introduction of the German Code will ensure that the two-tier board system will remain the favoured board structure for public corporations in Germany. It is, however, submitted that employee participation at supervisory board level will provide particular political challenges for Germany in the near future.