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Factsheet for measure DE-1998-18/2476 – measures in Germany
Country | Germany , applies nationwide |
Time period | Open ended, started on 01 May 1998 |
Context | Restructuring Support Instruments |
Type | Legislations or other statutory regulations |
Category |
Ensuring business continuity and support for essential services
– Smoothing frictions or reallocation of workers |
Author | Birgit Kraemer (Hans Boeckler Foundation) and Eurofound |
Measure added | 23 June 2022 (updated 02 November 2022) |
Early knowledge of potential internal and external risks that could jeopardize the continued existence of the company is supposed to help public limited companies to develop suitable solutions in response. As companies work in a constantly changing environments, risk identification and controlling shall be conducted on a continuous basis. This is done by implementing a mandatory risk management system on the basis of the Stock Corporation Law and supplementary laws.
Paragraph 91/2 of the Stock Corporation Law requires public limited companies to establish a system of measures and control instruments that are able to identify developments, at an early stage, that might negatively affect the continued existence of the company.
The legislator requires a monitoring system for the early detection of risks and the creation of appropriate communication structures that ensure that the decision-makers are able to initiate suitable countermeasures in good time.
In the annual management report with forecast character, the auditors must document in a special part of the audit report that measures have been taken and how they are designed, how effective these measures are, and document which measures are required to improve the internal monitoring system.
While all public limited companies must implement a risk mangement systems, the effectiveness of these measures are dependent on different factors. Mülller (2014) concludes that risk management systems are not a panacea for preventing corporate crises. In recent company failures, management either consciously accepted risks or concealed existing risks from supervisory bodies through so-called management override.
Workers | Businesses | Citizens |
---|---|---|
Does not apply to workers |
Larger corporations
|
Does not apply to citizens |
Actors | Funding |
---|---|
National government
Company / Companies |
No special funding required
|
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | Unknown | Unknown |
Form | Not applicable | Not applicable |
Social partners' role in the implementation, monitoring and assessment phase:
Unknown
Unknown
Citation
Eurofound (2022), Statutory risk management systems in public companies , measure DE-1998-18/2476 (measures in Germany), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DE-1998-18_2476.html
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