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The link between supervisory board reporting and firm performance in Germany and Austria

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Abstract

The present study examines the supervisory board reporting of listed corporations in the German and Austrian Prime Standard, especially with regard to the “assisting” role of the external auditor. The aim of this paper is to compare the similar two-tier systems in both European countries regarding their stock corporate law and their corporate governance codes. First, the descriptive analysis reveals specific reporting gaps in Germany and Austria. Thus, suggesting that the current German and Austrian accounting law reforms are crucial in order to increase the reporting quality in the future. The analysis of correlation in particular shows statistically significant positive correlations between the reporting on the independence of the supervisory board and the firm performance index (Price-Earnings-Ratio, Tobin’s Q) in both countries. Taken together, the determined correlations of all variables in question are to be classified as rather insignificant and their effects are quite inhomogeneous. Although several similarities can be found in the corporate governance systems of Germany and Austria, deviations exist with regard to the significance of the corporate governance reporting and firm performance.

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Notes

  1. “Corporate Governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment” Shleifer and Vishny (1997), p. 737.

  2. The listed European corporations (“societas Europaea”) in the German and Austrian Prime Standard can choose from the one- or two tier system. Except for one company at the Vienna Stock Exchange the two tier system is always implemented.

  3. See Bassen et al. (2004); Theisen (2003); Werder and Talaulicar (2006), (2007); Bassen and Zoellner (2005a, 2005b).

  4. See Roessler (2001); Fischbach (2003); Koehler (2005); Quick et al. (2008); Boecking (2008).

  5. See Quick et al. (2008), S. 26.

  6. § 95 dAktG and § 86 Para. 1 öAktG.

  7. See also Huwer (2008), p. 71.

  8. Kalss (2008a), p. 990.

  9. See § 107 Para. 3 Sentence 2 dAktG.

  10. See also § 324 Para. 1 Nr. 1, 2 HGB.

  11. § 324 Para. 1 Sentence 1 HGB; § 100 Para. 5 dAktG.

  12. See also Boecking (2008), p. 364; Werder and Talaulicar (2005), p. 844, (2006), p. 851.

  13. See also § 110 Para. 3 Sentence 2 dAktG.

  14. See Boecking (2008), p. 368; Quick et al. (2008), p. 30.

  15. See also Boecking (2008), p. 368 f.

  16. Recital 3.8 of the GCGC (2009) and recital 10 of the ACGC (2009).

  17. See Kalss (2008b), p. 908.

  18. Recital 5.4.2 of the GCGC (2009); recital 53 of the ACGC (2007).

  19. Recital 53 of the ACGC (2009).

  20. § 171 Para. 2 dAktG; § 96 Para. 2 öAktG.

  21. Recital 7.1.2 of the GCGC (2009) also implies a recommendation concerning the monitoring of the interim reports by the supervisory board/audit committee.

  22. § 171 Para. 2 Sentence 2 dAktG; § 96 Para. 2 öAktG.

  23. See also Kalss (2008c), p. 496.

  24. See Kalss (2008c), p. 500.

  25. § 171 Para. 1 Sentence 2 dAktG.

  26. § 125 Para. 6 Sentence 2 öAktG.

  27. § 92 Para. 4 a Sentence 4 öAktG.

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  1. Department of Business Administration, School of Business, Economics and Social Sciences, University of Hamburg, Max-Brauer-Allee 60, 22765, Hamburg, Germany

    Patrick Velte

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Velte, P. The link between supervisory board reporting and firm performance in Germany and Austria. Eur J Law Econ 29, 295–331 (2010). https://doi.org/10.1007/s10657-009-9122-x

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