International interdisciplinary Corporate Governance consulting

Corporate Governance is an umbrella term covering all management and control processes in a company. They can be generally divided into internal processes, in particular the monitoring of management by shareholders and a supervisory board, and external processes concerning the company's legal and environmental relationships with the outside world, such as with suppliers, authorities, and interest groups.

The German Corporate Governance Code ("Code") adopted on 26 February 2002 contains, in the form of recommendations and suggestions, standards for good and responsible corporate governance – primarily for listed companies.

The Code's guidelines are recommendations ("shall") and suggestions ("should"), and thus a source of so-called soft laws. This means that they cannot be relied on in court. However, it is possible to incorporate the guidelines into companies' existing internal regulations, such as articles of association or management regulations, and thus translate the Code's "regulatory corset" into a source of binding laws (so-called hard laws). Furthermore, in its preamble, the Code expressly states that its contents apply to all capital market-oriented companies.

Also, the adjective good emphasises the responsible establishment and implementation of the recommended regulatory corset.

But choosing the right design is not about following a boilerplate regulatory framework. The shareholders should set up a structure:

• that fairly and consciously balances interests of all parties involved
• that takes environmental protection (carbon footprint) into consideration 
• that ensures transparency (supply chains) or
• that gives the departments involved a say
  

Good Corporate Governance often involves international issues due to the international nature of the corporate structure of many companies. In many cases, operational decisions and the associated developments do not have only an isolated effect on the foreign branch concerned.

If a foreign subsidiary or sister company makes wrong decisions and/or has problems with supplies – for example, because no clear and appropriate management structures were established or resources were not properly planned – the parent company in Germany also suffers losses on this account by having to pay compensation of any kind.

Companies that are experiencing massive international growth are often faced with such problems. This happens, for example, when not only local representative offices but also subsidiaries are established in various countries but without setting up a corporate structure with an overarching governance system.

Without such a system, the parent company will be increasingly losing control of the management bodies of the foreign subsidiaries. Such a loss of control is reflected in the parent's inability to take business decisions at the local entity or in their slow implementation, and in the poor exchange of information with the parent company.

To prevent this from happening, we take the following steps:

1. As part of a first review, we examine which legal and actual control and management mechanisms  have already been implemented by the individual foreign subsidiaries.
2. Next, after analysing the results, an international corporate governance architecture is established with the involvement of the foreign branches and colleagues. In this process, it should be taken into account that almost every legal system in Europe has its own regulations regarding an effective and responsible corporate governance, for example, the ÖCGK in Austria, the “Swiss Code" in Switzerland, or the Corporate Governance in the UK.​