Two years ago, a so-called corporate governance code was established as a guideline for German companies. Executives have accepted the rules by and large, but many still refuse to reveal their salaries.
Many executives still refuse to say how much money they take home
The 15-page document was drawn up by a commission appointed by the government and led by Gerhard Cromme, the chairman of the board of trustees of steel giant ThyssenKrupp.
Cromme is convinced that the code has been a success. He recently said that it's been widely accepted among German companies and helps them to improve management leadership. By the end of 2004, companies listed in the DAX, Germany's stock index, will have implemented 96 percent of all recommendations in the codex, he said.
Who earns what?
One hotly contested area remains the publication of salaries paid to top executives, however. Only 11 out of the 30 DAX companies agreed to reveal these numbers in 2003.
German Justice Minister Brigitte Zypries (photo) is unhappy with that and said she will introduce legislation forcing companies to reveal salaries.
That's a step Cromme rejects: He's called on his colleagues to be more transparent when it comes to salaries. An appropriate remuneration for top executives should not have to be hidden, he said.
A need for change
Other questions still remain to be solved as well, however. For example, chief executive officers should not head their company's board of trustees immediately after retirement.
Companies' annual shareholder meetings should be streamlined as well to do away with 12-hour marathon sessions that are currently the norm in Germany.
All of this requires companies to rethink their culture and that's something that takes time, Cromme said. But he added that the first signs of moving in that direction can already be felt.
"My personal impression from the annual meetings is that the speeches from top executives have gotten shorter," he said. "That way there's more time for a reasonable discussion between executives and shareholders."
German companies now hope that they will be able to prevent legislation by implementing changes in the near future.
But as Zypries has pointed out, the federal government, which itself is currently planning to expand access to government documents in a bill similar to the United States Freedom of Information Act, will not wait forever.