GERMANY - Hermes Equity Ownership Services (EOS) has published a list of corporate governance principles for German listed companies.
The advisory firm, which has more than €100bn ($142bn) in assets under stewardship, said the principles emphasise certain key issues which are not sufficiently covered by the German Corporate Governance Code.
One of the main issues the principles highlight is that as a general rule a CEO should not become chairman in the German two-tier board system. However, the firm said it recognises the value that former executives can bring to the work of the supervisory board.
The issue has been made topical by Deutsche Bank, Germany's largest banking group, which recently announced its current CEO, Josef Ackermann, will seek election to the supervisory board at the shareholder meeting in 2012 with a view to becoming chairman.
EOS director Hans-Christoph Hirt said: "The Hermes EOS German Corporate Governance Principles have long been the basis of our discussions with companies in Germany. We have updated our principles and put particular emphasis on issues that are currently of significant concern to investors."
"While we have yet to take a decision on the particular case at hand, we may in exceptional circumstances consider supporting the election of suitable and successful executives to the supervisory board."
The principles also encourage companies to involve shareholders in in key corporate decisions, such as major acquisitions, disposals and takeovers, and particularly in decisions concerning corporate governance, such as the nomination of candidates for election to the supervisory board and executive remuneration.
"Supervisory board nominations and elections are the next big topic on investors' agendas," Hirt said. "We think it is crucial to involve shareholders in an appropriate way in the nomination process, which has not been the practice in the past.
"The members of the supervisory board are, after all, the shareholder representatives in the company. Hermes EOS is holding discussions with a number of major DAX companies on this particular issue."
Hermes EOS said it would continue to promote the advisory vote on executive remuneration at German companies.
"There have been some encouraging developments over the past two years following the introduction of the advisory vote, in particular, a better dialogue between companies and investors," Hirt added.
"While we do not think that there has to be a vote on remuneration every year, we want companies to give shareholders the opportunity to vote on it again when there was a significant number of votes against in the previous year."
Life expectancy in the UK saw no improvement between 2015 and 2017 as the number of people aged over 90 hit a record high, latest Office for National Statistics (ONS) data reveals.
Self-administered pension funds spent £14bn on payments to pensioners in Q2 2018, but only received £11.4bn of contributions (net of refunds), latest Office for National Statistics (ONS) data reveals.
The Pensions and Lifetime Savings Association (PLSA) has named the 17 members of its inaugural policy board after a competitive application process with 60 candidates.