2. Essay 1: Top Executives made in Germany
3 2.1 Governance system and top executives in Germany: Legal perspective The main German law for the public limited company is the Aktiengesetz von 1965 (AktG; public corporation act of 1965), which has been amended over time, especially by the Gesetz zur Kontrolle und Transparenz im Unterneh- mensbereich von 1998 (KonTraG, law on control and transparency in public corporations of 1998). The AktG requires a mandatory organizational separation of manage- ment and control (two-tier board system). The Vorstand (management board, board of executive directors) leads the company under its own responsibility, whereas the Aufsichtsrat (supervisory board, board of non-executive direc- tors) monitors the management board. Overlapping membership is prohi- bited. The system of Mitbestimmung (employee codetermination) is also an essential part of the German governance structure. Employee representation takes place at the shop-floor level and at the board level. The codetermina- tion at the shop-floor level is based on the Betriebsverfassungsgesetz (BetrVG 1952, 1972, works constitution act of 1952, 1972) and describes the right of the employees at the level of individual plants to elect Betriebsräte (work coun- cils), which have information-gathering and codetermination rights in social, personnel, and economic matters. Codetermination at the board level is based on three codetermination regimes that also regulate size and organization of the supervisory and management board. The supervisory board oversees the management of the corporation (§ 111 (1) AktG), appoints and removes the members of the management board (§ 84 AktG), sets their compensation, and has the right to co-approve par- ticularly important...
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