How Shareholders Are Protected in different countries

Germany scores lowest in measures designed to protect shareholders.

Shareholders have preemptive rights when new shares are issued No No Yes No Yes
Judicial mechanisms to contest decisions taken by executives or at shareholder meetings Yes Yes No No Yes
Mandatory dividends No No No No No
One share - one vote principle No Yes No No No
Compulsory separation between control and decision, generally reflected as separate chairman and CEO roles No No No Yes Yes
Proxy shareholder voting by mail Yes No Yes No Yes
Percentage of share capital to call an extraordinary shareholders' meeting 0.10 0.03 0.10 0.05 0.10

How Employees Are Protected

Labor market reforms in Germany, France and other EU states are likely to leave employees on the same footing as those in the U.S. and the United Kingdom.

Relative strictness of laws affecting individual layoffs (OECD index with 12 indicators) 0.2 2.7 2.3 2.8 0.8
Relative strictness of laws affecting collective layoffs (OECD index with four indicators) 2.9 1.5 2.1 3.1 2.9
Works Council or internal consultative groups No Yes Yes Yes No
Participation plans for employees Yes Yes Yes No Yes
Employees representation on board No No No Yes No

How Financial Creditors Are Protected

Britain and Germany offer the strongest measures to protect banks from the collapse of a business that has borrowed money.

Reorganization restrictions linked to creditors' agreement No No No Yes Yes
Creditors' claims have priority in bankruptcy or reorganization law No No No Yes Yes
Management cedes control during reorganization No Yes No No Yes
Legal separation of decision and control functions, generally reflected in separation of CEO's and chairman's roles No No No Yes Yes
Percentage of firms working with just one bank (1999) NA NA 4% 15% 23%
Sources: World Bank, OECD, research