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The German Supervisory Board on Its Way to Professionalism


member should have a basic understanding of a corporation’s financial affairs. Due to the lack of adequate candidates of the workforce and workers unions, the general standard of financial literacy is still at a minimum level.162 In Germany, there is only a limited pool of financially well‐educated and experienced employee representatives’ candidates. In this regard, codetermination has also a detrimental effect on the expertise of board members, and, thus, hampers further ambitions towards professionalism.

III. Excessive Board Size

Anotherrather indirectconsequence of German codetermination is the excessive size of the supervisory board that in average consists of 13.25 members.163 This is almost twice of the size of the average board of directors in the United States and the United Kingdom.164 Furthermore, empirical evidence with regard to the European Company (SE) shows that some of Germany’s most important publicly held companies reincorporated as European Companies and, thereby, decreasing the size of their supervisory boards.165 Both Allianz SE and BASF SE decreased the board size from formerly 20 to 12 members. Additionally, both Max Boegl International SE and MAN Diesel SE reduced their supervisory board size by two members each.

This development is evident from an economic point of view, because smaller boards have several important advantages. They principally reach decisions more rapidly, they can meet more often, and they facilitate an unconcealed exchange of ideas.166 Furthermore, the individual consciousness of responsibility of every supervisory board member is higher in smaller boards, because it is not possible to hide in an anonymous crowd.167 Smaller boards may also be helpful to prevent conflicts of interests, because the more persons serve as supervisory board members, the higher the risk is that there is any conflict of interests that might derogate the efficiency of the supervisory board’s monitoring function.168 Accordingly, empirical evidence shows that there is a significantly negative


Hopt & Leyens (note 1), 145.

163 Klaus J. Hopt, Corporate Governance: Aufsichtsrat oder Markt, in MAX HACHENBURG: DRITTE GEDÄCHTNISVORLESUNG 1998, 9, 29‐30 (Peter Hommelhoff et al. eds., 1998); Hopt (note 1), 248.

164 See, BERICHT (note 134), margin number 49; see further Carsten Berrar, Zur Reform des AR nach den Vorschlägen der Regierungskommission “Corporate Governance”, 4 NZG 1113, 1114 (2001).

165 Horst Eidenmüller, Andreas Engert & Lars Hornuf, Die Societas Europaea: Empirische Bestandsaufnahme und Entwicklungslinien einer neuen Rechtsform, 53 AG 721, 728 (2008).


LIEDER (note 2), 675.

167 See, Hagen Lüderitz, Effizienz als Maßstab für die Größe des Aufsichtsrats, in FESTSCHRIFT FÜR ERNST STEINDORFF, 113, 120 (Jürgen F. Baur et al. eds., 1990).


See, Lüderitz (note 167), 122‐123; LIEDER (note 2), 677.

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