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With this, Germany's first governance code ever, the government was hoping to boost foreign investment.But the majority of the Cromme recommendations are voluntary, though firms that do not comply have to explain to shareholders why.
The governance code is framed as an invitation to comply or explain.
The clawback mechanism will be inserted into the corporate governance code.
The same happened when the Tokyo stock exchange tried to design a governance code.
The UK corporate governance code recommends that all listed companies have such an external valuation every three years.
The corporate governance code says the board is "collectively responsible for the long-term success of the company".
Similar(18)
That is a cardinal error according to Germany's corporate-governance code, which was drawn up by a government committee chaired by, ahem, Mr Cromme.
The Germans have produced a legally binding corporate-governance code, to be reviewed once a year.
A voluntary corporate-governance code, published in 2003, has remained just that—voluntary.
Companies will not have to comply with the corporate-governance code, but merely to explain when they do not.
Mr Cromme's departure is all the more disquieting because he oversaw the drafting in 2002 of Germany's corporate-governance code.
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