Board Members and Corporate Governance
Corporate Governance covers the responsible management and control of enterprises.
Compliance means the fidelity to the rules of the game in the form of guidelines and non-binding codes.
Today the year 1932 counts as the origin of the declaration and introduction of Corporate Governance, as for the first time, a gap between the interests of shareholders and corporate management gained attention (The Modern Corporation and Private Propriety by Adolf Augustus Berle and Gardiner C. Means). Other milestones are:
Cadbury Report (1992), Greenbury Report (1995), Hampel Report (1998)
Sarbanes Oxley Act / SOX 2002 (the follow-up to the spectacular US accounting scandals Enron, Worldcom, etc.)
German Corporate Governance Code (2002)
The German Corporate Governance Code contains internationally and nationally approved standards of good and responsible business management. The aim is to make the German Corporate Governance transparent and comprehensible. It intends to inspire the trust of international and national investors, customers, employees, and the general public in the management of quoted enterprises.
The code emphasises the obligation of the board of directors and chairman, to ensure the existence and sustainable added value of the company in accordance with the principles of the social markets.
Austrian Corporate Governance Code (2002)
It sets the bench mark for good entrepreneurial management and control on the Austrian capital market and the 2008 changes in entrepreneurial law boosted its relevance.
The Austrian study group for Corporate Governance elaborated the Austrian Corporate Governance Code. The Code designated three kinds of rules: L (legal requirements), C (comply or explain), R (recommendation)
L-Rules: Rules based on mandatory laws
C-Rules: Enterprises making an aberration must justify this
R-Rules: Rules based on voluntary recommendations, the non-compliance doesn't have to be justified nor published.
Public Corporate Governance Code
The Austrian federal government has passed on October, 30 th 2012 the federal law on public corporate governance (B-PCGK). Enterprises in partial or full indirect or direct ownership of the Federation /State are now required to apply these rules and are obligated to edit an annual report on this matter.
The aim of the Code is the enhancement of transparency, control and comprehensibility of corporate management and to point out the role and function of the federal government as a stakeholder.