German Law Journal
[Vol. 11 No. 02
presentation”).43 This practice was justified with regard to possible misuse of accounting information by employee representatives in codetermined supervisory boards.44
The revised Section 170(3) now ensures that every supervisory board member receives the information necessary to monitor the accounting of the company. On the other hand, the new provision still provides the opportunity for the supervisory board to decide whether the report should only be sent to the audit committee, rather than to every single supervisory board member. This exemption addresses the phenomenon that employee representatives in the supervisory board still view themselves as representatives of the personnel’s interest45. In this capacity, they still occasionally believe that they are authorized to forward confidential information from the boardroom to the workforce, even if they thereby infringe their legal obligation of secrecy under Section 116.46 If there is a serious threat that confidential information would become publicly known, the supervisory board may opt for reporting to the audit committee only.
4. Participation of the Auditor in the Supervisory Board’s Meeting
Finally, the mandatory participation of auditors in the supervisory board’s deliberations on the annual financial statements and reports, as well as the essential results of its audit, increased the level of information that the supervisory board held. This also made the supervisory board more sensitive and more conscious for issues of a company’s accounting and auditing.47 Under Section 171(1) as of 1965, auditors were obligated to participate in the relevant meeting if and only if the supervisory board told them to do so. In fact, the supervisory board only infrequently asked the auditor to attend the meeting.48 Therefore,
43 Katharina Pistor, Codetermination: A Sociopolitical Model with Governance Externalities, in EMPLOYEES AND CORPORATE GOVERNANCE, 163, 191 (Margaret M. Blair & Mark J. Roe eds., 1999); see also, Iren Schwegler, Die Stellung des Wirtschaftsprüfers zu den Organen Hauptversammlung, Vorstand und Aufsichtsrat, 50 BB 1683, 1686 (1995); LIEDER (note 2), 531.
44 Pistor (note 43), 191; see also, Official Explanatory Statement (note 17), 22; Karl‐Heinz Forster, MG, Schneider, Balsam und die Folgen – was können Aufsichtsräte und Abschlussprüfer gemeinsam tun?, 40 AG 1, 3 (1995); Götz (note 37), 343.
See, in detail section G.II.3 of this paper.
46 See, Official Explanatory Statement (note 17), 22; Forster (note 42), 197; Marcus Lutter, Defizite für eine effiziente Aufsichtsratstätigkeit und gesetzliche Möglichkeiten der Verbesserung, 159 ZEITSCHRIFT FÜR DAS GESAMTE HANDELSRECHT UND WIRTSCHAFTSRECHT (ZHR) 287, 300 (1995); see also Bundesarbeitsgericht (Federal Labor Court), 30 ZIP 2018‐2022 (2009).
See, LIEDER (note 2), 536.
48 Lutter (note 46), 295; Thomas M.J. Möllers, Professionalisierung des Aufsichtsrats: Zu einer differenzierten Verantwortung der einzelnen Aufsichtsratsmitglieder, 16 ZIP 1725, 1729 (1995); Schwegler (note 43), 1684.