The requirements on corporate governance have become significantly stricter in recent years. Legislators and regulators around the globe have reacted to perceived weaknesses in existing systems with new rules and codes of behavior. A wide range of areas are affected, including the increased professionalization of supervisory boards, responsibilities for financial and risk management and the compensation of top managers.
Interest on the part of the public and the media has also grown. Companies and their board members now face considerable risk of damage to their reputation. Investors, too, are showing a new interest in compensation and corporate governance issues, and approval processes and shareholder meetings are becoming ever more complex as a result.
These changes have led to an increase in the duties, responsibilities and liability of companies' decision-making bodies. The role of these bodies has become more concrete. Regulators have also set out new rules on the compensation of top management. The following trends are seen, particularly at a European level:
- Stricter rules on compensation and contracts
- Increased governance rules on decision-making
- Greater integration of shareholders through "say on pay"
- Tighter requirements for publishing details of top management compensation
In the banking sector, the new rules on capital requirements have considerably expanded the control and reporting duties of supervisory bodies. The regulations are subject to frequent change, keeping issues of risk, finance and compensation for board members and CEOs high on the agenda for supervisory boards – and ensuring close public scrutiny.
As independent expert in board services, hkp/// group advises supervisory boards (Aufsichts- und Verwaltungsräte etc.) on corporate governance issues. We help design, monitor and review executive compensation systems and processes. hkp/// stands for outstanding expertise, fact-based opinion and a passion for finding the best solution for your company. Our combination of expertise in compensation and competence in finance and risk is unique in German-speaking countries. It allows us to provide tailor-made concepts and implementation for supervisory boards of all types.