Documents Hertig, Gerard 3 results

"Employee board representation can serve information dissemination purposes. This comment argues that in Germany, which (still) has a bank-oriented financial system, transparency may be better served by using codetermination (under which up to half of the supervisory board is composed of employees) as an information channel, rather than by importing the mandatory disclosure requirements that are typical of Anglo-Saxon jurisdictions. There are two reasons for this. One is that the evidence about the efficiency of mandatory disclosure requirements is mixed. The other is that mandatory disclosure is an intrinsic component of market-oriented financial systems such as the US financial system.
Transplanting a market-oriented component into a bank-oriented financial system brings the risk of inconsistencies, as it affects the complementarities that exist among the intrinsic components of a bank-oriented system. This comment thus concludes that before suggesting ways to transplant further mandatory disclosure requirements into the German financial system, or improve existing ones, one should consider how to use or improve the use of codetermination as an information dissemination channel."

"Proponents of board reforms assume that corporate structures and director-specific provisions matter. This paper argues that reformers have set minimum standards, but failed to take into account various trade-offs and regulatory capture effects. It is thus suggested that the flexibility of existing provisions be increased and that this new approach be used to improve shareholder protection against board failures in general and failures of institutional investor boards in particular."