GERMANY Trends and Developments Contributed by: Christoph Nolden, Nicolas Ott, Stefan Mendelin and Thomas Glaser, SZA Schilling, Zutt & Anschütz
see AGMs as crucial for reputational management, not just formal resolutions. These examples show that while virtual tools can increase accessibility, inves- tors seem to prefer hybrid models that combine digital
• realistic “break-glass plans” to respond quickly to demands in an emergency; • early involvement of the supervisory board and investor relations teams in scenario rehearsals; and • disclosure of clear succession and competency profiles for top management. In addition, companies should proactively seek dia- logue with both large and small shareholders. Those who explain their strategy transparently reduce the likelihood of public conflicts. Recommendations for Investors Investors also benefit from a structured approach: • careful due diligence covering capital structure, governance provisions and ESG performance; • early communication with company management to define escalation levels; • align voting behaviour consistently with long-term goals and, if necessary, explain votes publicly; and • collaborate with like-minded shareholders to pool influence without violating disclosure requirements. Balanced activism recognises that value creation is based not only on cost reductions or short-term ben- efits to shareholders but also on sustainable growth. Outlook Germany is in a phase of intense transformation. Legal changes are strengthening the capital market on the one hand, while demanding more responsibil- ity from companies and investors on the other. Activ- ism remains a central issue but is no longer limited to short-term profit maximisation. ESG issues, pro- cedural fairness and good corporate governance are now part of a broader concept of value. Boards that promote transparency, communicate risks openly and pursue credible future strategies can use this momentum to their advantage. Those who cling to outdated structures, however, must expect head- winds – whether on the stock exchange, at the AGM or in court. The coming years will show whether Ger- man companies can successfully use their new free- doms while maintaining the trust of their shareholders.
convenience with in-person dialogue. Corporate Governance Pressures
Investors develop a growing resistance to the prac- tice of appointing former CEOs to supervisory board chairs. Proxy advisers advised to vote against such transitions at BASF and Munich Re in 2025, though the motions still passed. Investors want stronger independence standards, more transparent succes- sion planning and greater diversity at board level. To limit investor pressure, boards are recommended to adopt a clear succession and diversity planning and consider tenure limits to improve investor confidence. Challenging AGM Resolutions: Reform on the Horizon The CDU/CSU–SPD coalition agreement in 2025 included a commitment to reform the rules govern- ing challenges to AGM decisions. The stated aim is to improve legal certainty and curb abusive litigation. However, as of August 2025, no draft legislation has been enacted, and the details remain under discus- sion. Any reform of the challenges to AGM decisions must balance efficiency with minority protection. While proxy fights are rather unusual and mostly ineffec- tive in Germany, shareholder litigation can be used tactically by small investors. Business associations such as BDI strongly support the reform, while minor- ity shareholder groups have voiced strong opposi- tion. The outcome of this debate will likely shape the investment climate and the strategies for sharehold- ers’ opposition for the next decade. Practical Recommendations for Companies To prepare for the new climate of activism and govern- ance, a structured approach is recommended: • regular activist screenings and market rumour monitoring; • updated communication guidelines for capital markets that integrate financial, strategic and ESG aspects;
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