The Dialogue between the Chairman of the Board and Investors: The Practice in the UK, the Netherlands and Germany and the Future of the German Corporate Governance Code Under the New Chairman

The dialogue of the board and its chairman with investors is an established practice in many countries, such as the United Kingdom, the USA, the Netherlands, Belgium, France and recently also Germany. In the UK this dialogue covers the whole range of relevant board topics, certainly including good corporate governance aspects such as the composition of the board and the remuneration of the directors as well as good corporate culture and ethics in the corporation. In Germany this dialogue may also take place between the chairman of the supervisory board and institutional investors; this is firmly established in the practice of most of the DAX-30-corporations, and some other corporations follow the trend. This practice is taken up by many codes of good corporate governance, for example in the UK Corporate Governance Code 2014 and the UK Stewardship Code 2012 as well as in the Corporate Governance Codes of France, the Netherlands, Belgium, the USA and since 2017 also in the German Code. The investor dialogue involving the chairman of the board, both in the one-tier and the two-tier systems, is legal and legitimate, but it has three main limits: insider trading and market abuse, company secrets, and equal treatment of the shareholders. The latter limit creates practical problems which are met by the various codes in different ways. While the competence for investor relations is primarily with the CEO viz. the chairman of the management board, the chairman of the (supervisory) board should also be available – within reasonable limits – to discuss supervisory board-related issues with investors. This has been rightly suggested by the German Corporate Governance Code, though it has met with certain doctrinal concerns. In many countries this dialogue is not restricted to the chairman of the board but extends to other board committe chairmen, to the senior independent directors and sometimes to all directors. It can be expected that the chairman of the board’s dialogue with investors will sooner or later not only become a general practice, but that it will also be considered to represent good corporate governance.