Board Models in Europe – Recent Developments of Internal Corporate Governance Structures in Germany, the United Kingdom, France, and Italy

Abstract

The struggle for efficient internal management control is the centre of the corporate governance debate in Europe since the incorporation of the Dutch Verenigde Oostindische Compagnie in 1602. Recent developments in Europe indicate growing convergence of internal control mechanisms independent of board structure. The revisions of the Combined Code in the United Kingdom and of the Principles of Corporate Governance in France (from 2003) increase the presence of independent directors on one-tier boards in Europe while the German two-tier structure is incorporating a key advantage of the one-tier model by strengthening the strategic role of the supervisory board (Aufsichtsrat) in the new German Corporate Governance Code of 2002. A trend to greater structural flexibility on the board level is strongly triggered by the introduction of a threefold board model choice under the French Loi Nouvelles Régulations Économiques of 2001 and under the Italian Vietti-Reform which has been in force since January 2004.