Code reform: The Federal Ministry of Justice keeps its distance and recommends trusting the government commission. Why it’s too much to ask.

Katarina Barley

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Katarina Barley’s head of department replied to our letter to the Federal Ministry of Justice. Just to summarize: Ulrich Seibert writes with very nice words – nothing, at least nothing substantial. The motto seems to be “What do we care about the sensitivities of the German economy when European elections are held”.

A succinct but nevertheless remarkable passage in the answer is: “I would be quite relaxed if the Commission, which consists of high-calibre and very sensible people, would evaluate the opinions in a meaningful way”, writes Seibert – and suggests waiting for the result.

Black Box Government Commission

With all due respect, Professor Seibert, but that is precisely the problem: we should trust that the Government Commission will take the reservations of business into account – but we have no chance of understanding which arguments it is taking up and for what reasons. Because it meets behind closed doors and does not have to answer seriously to anyone.

I am convinced that an institution that makes such far-reaching decisions should not be a black box. That is why, from the point of view of the rule of law, it is not enough for the Commission to consist of “high-calibre and very reasonable people” – I do not want to deny that, despite all the differences in content, on the contrary.

There is a huge lack of diversity

In addition: No matter how reasonable the individual members are – it depends on a healthy mixture, there is nothing else for the government commission than for executive committees and supervisory boards. But there is a huge lack of diversity because investors, shareholder protectors and auditors dominate, while important industries are not represented at all.

In my opinion, this is the main reason why the German Corporate Governance Code has been given a sidebar in recent years – towards bureaucratic one-size-fits-all requirements, away from practical principles. And given the dominance of outsiders, there can be no question of the originally intended self-regulation of the economy.

#CodeWende: We don’t just criticize – we act

It is therefore too much to ask to trust the government commission, as Ulrich Seibert suggests. The danger that after half-hearted changes to the draft code we will be confronted with faits accomplis is simply too great for us – especially since the government commission does not have to put the revised version up for discussion again.

Following the response from the Federal Ministry of Justice, we will therefore now be all the more resolute in pressing ahead with the #KodexWende initiative. Because criticism of the status quo and the lack of legitimacy of the government commission is only a necessary evil for us: Our passion is the design of corporate governance. We want to inspire the new era and develop modern, practical guidelines. The first results will be presented at the German Supervisory Board Conference on 27/28 June, which will be dominated by the #KodexWende.

Any additions, comments, objections? I look forward to your feedback dehnen@vard.de

Editorial by Peter H. Dehnen -> About the Person.

This post is also available in German