Author: Matthias Kiefer

Publisher: Matthias Kiefer

Published: 2023-03-13

Total Pages: 151

ISBN-13:

Watch out, there are two different types of company managers! This is not how a text book on Corporate Governance should begin. Modern corporations become independent from the influence of their shareholders. Dissatisfied shareholders sell rather than intervene. Stock exchanges allow disgruntled owners to tender their stock. On them, companies as wholes sell at premiums. The first known stock exchanges formed in Carthage (Tunisia), Sardinia and Sicily as early as in 600 BC. Phoenician seafarers’ wealth resulted from the markets that spread around the circular harbours. While ancient Roman neighbours benefitted from the Phoenician trade partners, their law diverged. In modern times, we witness an odd amalgamation of governance in Germany: Germany’s corporations have two legally separate governance boards. On the one hand, the functionality resulted from free markets: The most powerful directors must be separate to, and independent from, a company’s top management. Ancient Roman law disciplines German boards into obedience: The distinct types of leaders legally must divorce. Despite a larger population, Germany’s stock exchange today is less than half the volume of Britain’s. German banks not only fund their corporations. While western economies circle around stock exchanges, Germany’s small companies are subsidised and governed by the state banks. During recessions, Germany’s savers naturally insist on interest income, and force the country into austerity.