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  • 1.

    Primary sources of law, regulation and practice
    What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?

  • 2.

    Responsible entities
    What are the primary government agencies or other entities responsible for making such rules and enforcing them? Are there any well-known shareholder groups or proxy advisory firms whose views are often considered?

  • 3.

    Shareholder powers
    What powers do shareholders have to appoint or remove directors or require the board to pursue a particular course of action? What shareholder vote is required to elect or remove directors?

  • 4.

    Shareholder decisions
    What decisions must be reserved to the shareholders? What matters are required to be subject to a non-binding shareholder vote?

  • 5.

    Disproportionate voting rights
    To what extent are disproportionate voting rights or limits on the exercise of voting rights allowed?

  • 6.

    Shareholders’ meetings and voting
    Are there any special requirements for shareholders to participate in general meetings of shareholders or to vote? Can shareholders act by written consent without a meeting? Are virtual meetings of shareholders permitted?

  • 7.

    Shareholders and the board
    Are shareholders able to require meetings of shareholders to be convened, resolutions and director nominations to be put to a shareholder vote against the wishes of the board, or the board to circulate statements by dissident shareholders?

  • 8.

    Controlling shareholders’ duties
    Do controlling shareholders owe duties to the company or to non-controlling shareholders? If so, can an enforcement action be brought against controlling shareholders for breach of these duties?

  • 9.

    Shareholder responsibility
    Can shareholders ever be held responsible for the acts or omissions of the company?

  • 10.

    Anti-takeover devices
    Are anti-takeover devices permitted?

  • 11.

    Issuance of new shares
    May the board be permitted to issue new shares without shareholder approval? Do shareholders have pre-emptive rights to acquire newly issued shares?

  • 12.

    Restrictions on the transfer of fully paid shares
    Are restrictions on the transfer of fully paid shares permitted and, if so, what restrictions are commonly adopted?

  • 13.

    Compulsory repurchase rules
    Are compulsory share repurchases allowed? Can they be made mandatory in certain circumstances?

  • 14.

    Dissenters’ rights
    Do shareholders have appraisal rights?

  • 15.

    Board structure
    Is the predominant board structure for listed companies best categorised as one-tier or two-tier?

  • 16.

    Board’s legal responsibilities
    What are the board’s primary legal responsibilities?

  • 17.

    Board obligees
    Whom does the board represent and to whom does it owe legal duties?

  • 18.

    Enforcement action against directors
    Can an enforcement action against directors be brought by, or on behalf of, those to whom duties are owed?

  • 19.

    Care and prudence
    Do the board’s duties include a care or prudence element?

  • 20.

    Board member duties
    To what extent do the duties of individual members of the board differ?

  • 21.

    Delegation of board responsibilities
    To what extent can the board delegate responsibilities to management, a board committee or board members, or other persons?

  • 22.

    Non-executive and independent directors
    Is there a minimum number of ‘non-executive’ or ‘independent’ directors required by law, regulation or listing requirement? If so, what is the definition of ‘non-executive’ and ‘independent’ directors and how do their responsibilities differ from executive directors?

  • 23.

    Board size and composition
    How is the size of the board determined? Are there minimum and maximum numbers of seats on the board? Who is authorised to make appointments to fill vacancies on the board or newly created directorships? Are there criteria that individual directors or the board as a whole must fulfil? Are there any disclosure requirements relating to board composition?

  • 24.

    Board leadership
    Is there any law, regulation, listing requirement or practice that requires the separation of the functions of board chair and CEO? If flexibility on board leadership is allowed, what is generally recognised as best practice and what is the common practice?

  • 25.

    Board committees
    What board committees are mandatory? What board committees are allowed? Are there mandatory requirements for committee composition?

  • 26.

    Board meetings
    Is a minimum or set number of board meetings per year required by law, regulation or listing requirement?

  • 27.

    Board practices
    Is disclosure of board practices required by law, regulation or listing requirement?

  • 28.

    Remuneration of directors
    How is remuneration of directors determined? Is there any law, regulation, listing requirement or practice that affects the remuneration of directors, the length of directors’ service contracts, loans to directors or other transactions or compensatory arrangements between the company and any director?

  • 29.

    Remuneration of senior management
    How is the remuneration of the most senior management determined? Is there any law, regulation, listing requirement or practice that affects the remuneration of senior managers, loans to senior managers or other transactions or compensatory arrangements between the company and senior managers?

  • 30.

    D&O liability insurance
    Is directors’ and officers’ liability insurance permitted or common practice? Can the company pay the premiums?

  • 31.

    Indemnification of directors and officers
    Are there any constraints on the company indemnifying directors and officers in respect of liabilities incurred in their professional capacity? If not, are such indemnities common?

  • 32.

    Exculpation of directors and officers
    To what extent may companies or shareholders preclude or limit the liability of directors and officers?

  • 33.

    Employees
    What role do employees have in corporate governance?

  • 34.

    Board and director evaluations
    Is there any law, regulation, listing requirement or practice that requires evaluation of the board, its committees or individual directors? How regularly are such evaluations conducted and by whom? What do companies disclose in relation to such evaluations?

  • 35.

    Corporate charter and by-laws
    Are the corporate charter and by-laws of companies publicly available? If so, where?

  • 36.

    Company information
    What information must companies publicly disclose? How often must disclosure be made?

  • 37.

    Say-on-pay
    Do shareholders have an advisory or other vote regarding remuneration of directors and senior management? How frequently may they vote?

  • 38.

    Shareholder-nominated directors
    Do shareholders have the ability to nominate directors and have them included in shareholder meeting materials that are prepared and distributed at the company’s expense?

  • 39.

    Shareholder engagement
    Do companies engage with shareholders? If so, who typically participates in the company’s engagement efforts and when does engagement typically occur?

  • 40.

    Sustainability disclosure
    Are companies required to provide disclosure with respect to corporate social responsibility matters?

  • 41.

    CEO pay ratio disclosure
    Are companies required to disclose the ‘pay ratio’ between the CEO’s annual total compensation and the annual total compensation of other workers?

  • 42.

    Gender pay gap disclosure
    Are companies required to disclose ‘gender pay gap’ information? If so, how is the gender pay gap measured?

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P+P Pöllath + Partners is an internationally operating German law firm, whose more than 140 lawyers and tax advisors in Berlin, Frankfurt and Munich provide high-end legal and tax advice.

View more information about P+P Pöllath + Partners


Munich
Hofstatt 1
Entrance Färbergraben 16
80331
Munich
Germany
T: +49 89 24 24 00
F: +49 89 24 24 0999
Frankfurt
An der Welle 3
60322
Frankfurt
Germany
T: +49 69 247047 83/22
F: +49 69 247047 35/30


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