Current Research Projects

Executive Compensation as a Challenge for Investors 2020

In collaboration with hkp/// group and the DIRK – German Investor Relations Association, the chair's team analyzed the proxy voting guidelines for executive compensation of the most significant investors involved in DAX30 companies. Given the implementation of the second European Shareholder Rights Directive (ARUG II), these guidelines gain particular importance. The study analyzed the voting guidelines of the 40 most important DAX30 investors.

The Digitalization of the Finance Sector in the Automotive Industry

The successful implementation of digital transformation is crucial for the long-term success of companies. For the finance sector, this involves supporting management in adapting business models, organizational processes, and internal cost structures to new competitive conditions, while also rethinking their own roles, structures, and processes. In an empirical study involving over 100 surveyed companies in the automotive industry, the state of digitalization, current changes in this area, as well as the goals and impacts of digitalization in the finance sector are explored, and initial implications and recommendations are provided.

Research Project: Are Clawback Clauses a Strategic Handicap?

Due to legal frameworks and demands from investors, an increase in clawback clauses in executive contracts is expected in Germany. The implementation of such a clause, which allows for the recovery of previously paid variable compensation, is intended to prevent short-term, value-destroying behavior by board members. Against the backdrop of these intended effects, the study examines potential unintended consequences of clawback implementation on the strategic orientation of companies, using data from nearly 1,000 publicly traded U.S. companies.

Codetermination in Supervisory Boards and its Impact on Corporate Governance

In light of the lack of clear empirical evidence in the controversial debate on the benefits of codetermination, this study aims to fill this gap with systematically prepared empirical data and findings on the impact and role of corporate codetermination during the financial and economic crisis.

Determinants and Impact of Value-Based Management Systems

Although value-based management systems have been discussed for years in research and practice as a key element of value-oriented corporate governance, there are few meaningful empirical studies on these systems. This research project examines how the introduction of such systems affects corporate performance (operational and market performance) and various corporate decisions (R&D activities, financing decisions, strategic portfolio changes, etc.). The project also investigates which company-specific characteristics (e.g., ownership structures) influence the implementation of value-based management systems. The project is being conducted in collaboration with the Chair of Management Accounting at the Phillips University of Marburg.

The Impact of Employee Stock Ownership Programs

Companies are increasingly using employee stock ownership programs as an incentive and motivational tool. The costs of such programs can be substantial due to direct and indirect (especially administrative) expenses. However, there is a lack of robust empirical studies that examine the impact of such programs at the individual employee level (e.g., individual performance, engagement), making a cost-benefit assessment only partially feasible. This research gap is addressed by the project initiated together with Siemens AG, which analyzes the impact based on the globally implemented employee participation programs of Siemens AG, considering individual, organizational, and institutional characteristics.

The Functioning of Supervisory Board Structures in International Comparison

Not only due to the fundamentally different types of supervisory boards ("One-Tier" vs. "Two-Tier" system), but also due to numerous formal and informal differences, the structures and working methods of supervisory boards vary across countries in Europe and the USA. The resulting heterogeneous impact on corporate performance or specific decisions made by different supervisory board structures and compositions is being investigated in a joint research project with the Lee Kong Chian School of Business at Singapore Management University.

Strategic Realignment of Companies in Crisis Situations

The first objective of this project is to identify typical patterns of corporate reactions at the strategic (M&A decisions, diversification), operational (e.g., cost base, use of key performance indicators), and organizational (e.g., restructuring of board responsibilities, design of compensation systems) levels following corporate crises. The empirical study is based on European and U.S. publicly traded companies. In a second step, the project examines which determinants influence the success of strategic and operational change processes. Both industry-specific aspects and corporate governance aspects are considered. The project is conducted in cooperation with the Boston Consulting Group (BCG).

Efficiency Reviews in Public Enterprises

The professionalization of supervisory boards in public enterprises has significantly increased in recent years. Increasingly, tools used in supervisory boards of private companies are being applied in public enterprises. One such tool is the efficiency review according to the German Corporate Governance Code (DCGK) or the Public Corporate Governance Code (PCGK). This research project focuses on the current use and implementation of this tool in public enterprises and the satisfaction of supervisory boards with it. Best practice recommendations for conducting efficiency reviews in public enterprises are also to be developed. The research project is conducted in cooperation with the Chair of Public Management at the University of Leipzig.

Previous Research Projects

Efficiency Reviews of Supervisory Boards - Status Quo and Determinants in German Publicly Listed Companies

The project focuses on answering three questions: What is the current status of the implementation of efficiency reviews in German publicly listed companies? What determinants explain the frequency or type of efficiency reviews in supervisory boards? What are the benefits or costs associated with the various approaches to conducting an efficiency review in supervisory boards? The project provides employee representatives with detailed information on the topic of efficiency reviews and the associated processes and challenges. Additionally, the extensive analysis of the status quo provides the basis for a systematic presentation of potential weaknesses (e.g., no or superficial implementation of efficiency reviews; no open discussion of results; insufficient involvement of employee representatives in the design, no addressing of qualitative aspects of supervisory board work) in current corporate practice. The project is supported by the Hans Böckler Foundation.

The Impact of Compliance Behavior on Corporate Performance

Since 2002, German publicly listed companies have been required to annually report on their compliance with the recommendations of the German Corporate Governance Code, stating against which recommendations they deviate and why they do so. In collaboration with the Chair of Management Accounting at the Phillips University of Marburg and the Center for Entrepreneurial and Financial Studies (CEFS) at the Technical University of Munich, this research project analyzes two questions: What governance mechanisms influence the level of compliance with the code’s recommendations, and is there a relationship between the degree of compliance and corporate performance?

Gender Diversity, Corporate Performance, and Executive Compensation

The project supported by the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth comprises two modules: The first module, "Gender Diversity and Corporate Performance," addresses questions regarding the existence, extent, and significance of a relationship or even causality between gender diversity and corporate success. The second module, "Compensation Issues under the German Executive Compensation Act (VorstOG)," focuses on questions of pay equity in executive bodies. The aim is to gain insights into differences between the salaries of female and male executives as well as other conditions that women in leadership positions encounter. The Chair of Management and Control is particularly responsible for the second module within this project. Cooperation partner is the Institute for Corporate Management at the Karlsruhe Institute of Technology (KIT).