The main features of the German corporate governance system. Case study: Bayer AG

Each country has developed, according to the needs and specificity of the environment where the companies operate their businesses, its own corporate governance system. At global level, there are two main models of corporate governance taken into account: the shareholder system (United Kingdom, USA); the stakeholder system (Japan, most Latin and Continental European countries). The German company Bayer AG has adopted the stakeholder model to form its corporate governance system and, therefore, does not limit itself to the protection of stakeholders, as in the case of the English-American area A specific feature of the German corporate law is the separation between the Management Board ("Vorstand") and the Supervisory Board ("Aufsichtsrat"). This two-tier management system is also adopted by Bayer AG. It is rigorously forbidden to the members of one board to be, also, members of the other board. The German Supervisory Boards are unique due to the German law of co-determination, according to which it is mandatory for these boards to be composed by an equal number of representatives of stakeholders and employees. The role of Bayer AG Supervisory Board (formed by 20 members) is to monitor and guide the Management Board. In order to increase its efficiency in task fulfillment, Bayer AG Supervisory Board set up five committees – the Presidial Committee, the Audit Committee, the Human Resources Committee, the Nominations Committee and the Innovation Committee. The Supervisory Board operate in compliance with the German Stock Corporation Act and the German Corporate Governance Code. In average, the Supervisory Board has about 13 members and 2,3 committees. In the case of Bayer AG company, the Management Board is composed only by intern directors, having the role of company management and representation, while the Supervisory Board is formed exclusively by external directors. Obviously, the share structure is of concentrate type, thus supporting the long term investment horizons