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10 September 2026
In a recent consultation response, Minerva broadly supports the Commission's aim of reducing duplication and creating a more streamlined framework. However, our response argues that proposed changes relating to sustainability expertise, audit committee disclosures, shareholder involvement in takeover situations and remuneration transparency could weaken visibility around key governance safeguards, even where the underlying legal obligations remain in force.
The consultation forms part of the German Government Commission's periodic review of the German Corporate Governance Code and proposes one of the most wide-ranging simplification exercises in recent years. The Commission's stated objective is to remove provisions that duplicate statutory requirements, consolidate overlapping recommendations and make the Code more principles based. Many of the proposed changes would leave underlying legal obligations untouched but would reduce the number of governance expectations set out directly in the Code itself. It is this distinction, between removing duplication and removing visibility, that sits at the centre of Minerva's response.
An overview of our response is provided below, with a link to our full response here.
Minerva supports a number of the proposed amendments where they remove duplication or reflect governance practices that are already well established. These include changes relating to internal control and risk management reporting, auditor communications, remuneration provisions and the removal of prescriptive board age-limit expectations.
In these areas, the consultation demonstrates that simplification need not weaken governance standards. Where legal requirements are clear and market practice is mature, a shorter and more focused Code may allow investors and companies to concentrate on the principles that matter most.
One of Minerva's principal concerns relates to the proposed removal of explicit references to sustainability expertise from board competency expectations.
The consultation reflects a broader move towards principle-based drafting and a recognition that sustainability considerations are increasingly embedded throughout regulation and reporting frameworks. Minerva accepts that rationale. However, our response argues that accountability for sustainability issues should not be assumed to guarantee the expertise required to oversee them effectively.
The concern extends beyond a single provision. Proposed changes affecting board competence profiles, committee expertise requirements and audit committee composition collectively risk reducing the visibility of sustainability expertise at a time when boards face expanding reporting, assurance and oversight responsibilities. Minerva therefore argues that explicit recognition of sustainability expertise should remain visible within the governance framework, whether through the Code itself or accompanying guidance.
A recurring theme across our response is that governance expectations continue to have value even when they are reflected elsewhere in legislation.
This issue arises in relation to supervisory board rules of procedure, audit committee expertise disclosures and expectations surrounding the timing of financial reporting. The consultation proposes removing or simplifying several such provisions on the basis that legal requirements already exist.
Minerva's response questions whether legal existence and practical visibility should be treated as the same thing. Public disclosure of board procedures, clear information on committee expertise and transparent reporting expectations help investors assess governance quality and hold informed discussions with companies. Our response concludes that the benefits of maintaining visibility outweigh the limited burden associated with these disclosures.
Minerva also challenges the proposed removal of the Code's shareholder involvement mechanism in takeover situations.
The Commission has cited practical difficulties in reconciling the existing provision with statutory takeover timetables. While acknowledging those concerns, Minerva argues that changes in corporate control remain among the most consequential decisions shareholders face. Removing shareholder involvement entirely would diminish an established governance principle without necessarily resolving the underlying question of shareholder voice.
Rather than abandoning the principle, our response encourages the Commission to consider alternative approaches that preserve shareholder involvement while accommodating legal and transactional constraints.
Minerva's support for simplification is similarly qualified when it comes to executive remuneration.
Our response distinguishes between provisions that merely duplicate existing requirements and provisions that help investors evaluate the quality of remuneration decisions. Particular concerns relate to changes affecting remuneration design, benchmarking practices, adviser independence and disclosures explaining variable pay outcomes.
For investors, these provisions are not simply procedural. They provide insight into whether pay structures are aligned with performance and whether remuneration committees are exercising independent judgement. Minerva argues that reducing transparency in these areas would make remuneration outcomes more difficult to assess, even if baseline legal disclosure obligations remain unchanged.
Beyond the consultation proposals themselves, Minerva identifies several areas where the German governance framework could continue to evolve.
These include clearer expectations regarding shareholder involvement in major transactions, consideration of shorter re-election cycles for shareholder-elected supervisory board members and guidance on the governance implications of hybrid annual general meetings.
On hybrid meetings, Minerva emphasises that technology should strengthen shareholder participation and engagement rather than become a substitute for it. Our response argues that virtual-only arrangements should remain exceptional and that governance frameworks should continue to prioritise effective shareholder interaction.
The consultation is ultimately testing a broader question than how many provisions the Code contains. It is testing which governance expectations continue to deserve prominence even when similar obligations exist elsewhere.
Minerva's response concludes that reforms which remove duplication and improve usability should be welcomed. However, investors should pay close attention to proposals affecting sustainability expertise, audit committee transparency, shareholder involvement in takeover situations and remuneration disclosures. In each case, the issue is not whether the underlying obligation survives elsewhere in law, but whether investors retain the visibility they need to evaluate governance quality.
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