German Corporate Governance
Last November saw the German Corporate Governance Code Commission publish a revised code for consultation (found here). While the revised code was due to be released around the 10 June 2019, it is now likely that there will be a delay in the introduction of the new code based on a recent speech by the Commission's chairman (German version found here).
This delay is, in part, due to the requirement for the German government to also implement the requirements of the revised Shareholder Rights Directive (SRD). The Commission has stated that, depending on the speed of progress in implementing the requirements of the revised SRD, a draft of the new code is being considered for publication in May 2019, which will take into account the consultation responses and leave the door open for the Commission to accept further feedback thereafter.
A survey produced by FTI Consulting which is entitled 'Injection of ESG Builds Corporate Value' (found here) which obtained responses from 130 global institutional investors who represent over $8.4 trillion in assets under management, has identified some key trends:
- 87% of respondents found that high ESG ratings add value to a company, with extremely positive ratings equating to an extra 22% in corporate value
- 54% of respondents also stated that they didn't know how the most well-known rating services compile their ESG ratings
- 23% of respondents rated corporate governance as the most important ESG aspect to consider when making investment decisions, closely followed by business operations at 22%
- The five most important corporate governance aspects were: Ethics & Integrity (76%), Anti-Corruption (69%), Board Leadership (65%), Operational Transparency (64%), and Risk Management (61%).
The report makes clear that in order for an organisation to improve their ratings, they need a sound communications strategy and goes on to suggest practices what may facilitate better ratings.