Does it create a contentious discussion at the supervisory board level?
Publicly traded companies in Germany are required by law to operate under a dual board system. Shareholders elect a supervisory board, which in turn appoints a management board consisting of corporate officers. Governance is the supervisory board’s job; the management board makes business decisions—but always under the other board’s watchful eye. The two work closely together. The supervisory board is not necessarily “independent” by Anglo-American standards. Its chairman is frequently the company’s former CEO, and its members may include bankers, lawyers and other professionals who do business with the company. However, for businesses with more than 500 employees, a third of the supervisory board’s members must be labor representatives; for businesses with 2,000 or more workers, half the board must represent employees. Debate rages in some circles over which structure produces better governance, but no one has a definitive answer. Laws and regulations vary greatly from country to coun
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