30 Questions
What was the purpose of establishing the German Corporate Governance Code in 2002?
To summarize and increase transparency of existing laws and regulations for national and international investors
What is a key characteristic of the German Corporate Governance Code?
It repeats existing laws and regulations
What is recommended for the selection and qualification of board members by the German Corporate Governance Code?
No specific provision
What is the recommendation for the meeting frequency of the Aufsichtrat according to the German Corporate Governance Code?
More frequent meetings, including meetings of independent members only
What is the purpose of including independent members in the Aufsichtrat?
To provide efficient control
What is the purpose of the possibility to introduce performance-oriented payment elements for Aufsichtrat-members?
To establish a more performance-based remuneration system
Why do banks ask for directors to be personally liable in start-ups?
To reduce the risk of default for the bank
What is the primary reason for adding non-executive directors to a company's board?
To bring in external expertise and attract investors
Which type of board is typically found in non-profit organizations?
All non-executive director board
What is a characteristic of a unitary board?
Existence of a single board comprising executive and non-executive directors
In a dual board system, what is the role of the non-executive directors?
To supervise and monitor the executive directors
Which type of board is dominant in the UK and US?
Unitary board
What is one of the consequences of low share prices for a company?
It increases the risk of a hostile takeover
What is the purpose of target share repurchases in defense strategies?
To prevent a hostile takeover by buying shares from potential investors
According to the market for corporate control, what is the role of the stock market in relation to management performance?
It provides a means of control for management performance
What is the purpose of anti-takeover amendments in defense strategies?
To prevent a hostile takeover by requiring a supermajority
What is one of the reasons that may lead to a hostile takeover?
Poor management performance
What is the effect of the threat of a takeover on management performance?
It leads to better management performance
What is the primary objective of corporate governance?
To protect the interests of shareholders and other stakeholders
What are the external dimensions of corporate governance?
Laws and regulations, values and norms
What is the role of internal actors in corporate governance?
To direct and control the corporation
What is one of the important reasons why we need corporate governance?
To ensure that an appropriate system of control works within a company
What is the relationship between corporate governance and the objectives of a company?
Corporate governance provides the structure through which the objectives of a company are set and monitored
What is the primary concern of corporate governance with regards to stakeholders?
Concerned with the relationship between the board of directors, the management, the shareholders and other stakeholders
What proportion of independent directors should comprise the audit committee?
Two-thirds
Who should not be members of the audit committee?
Corporate officers
What is a requirement for the nominating committee?
To set up a formal, permanent procedure on how to select directors
What is a mandatory requirement in the annual report?
Disclosure of social and environmental impact
What is a characteristic of businesses in Italy?
The largest stake in all companies is held by holdings
What is driving convergence in company law and securities regulations?
Globalization of investor markets
Learn about the basics of corporate governance, its importance, and its internal and external dimensions. Explore the laws, policies, and processes that shape corporate direction and control.
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