Corporate Governance and Reputation
Corporate Governance and Reputation
Germany’s stock corporation law (Aktiengesetz) prescribes a two-tier Board system with the strict separation of duties and responsibilities between the Management Board and the Supervisory Board. In practice, however, German corporate governance is becoming increasingly aligned with the single-tier Board system that is common in English-speaking countries and in Switzerland, whereby executive and non-executive members belong to only one governing body. As a result, German Supervisory Boards are increasingly confronted with questions around legal liability and inevitably also with communication and reputation issues. This makes it all the more important for German Supervisory Boards to not only address legal but also communication risks that could impact their reputation and to seek professional advice in this field.