Fresenius' Corporate Governance

Paper Summary:

The paper relates that California Public Employee's Retirement System (CalPERS), a significant shareholder in Fresenius Medical Systems, is making informal inquiries about the CEO and the Board of Directors since Fresenius is in violation of several of CalPERS' governance principles. The paper explains that there are significant risks to shareholder value if an investigation is to proceed and thus goes on to discuss the alternative options. The paper recommends an incremental, proactive approach that will strengthen governance, maintain continuity of operations and maintain shareholder value.

Outline:
Summary
Background
Alternatives
Recommendations

From the Paper:

"The California Public Employee's Retirement System (CalPERS) is one of the largest institutional investors in Fresenius Medical Systems. Recently, we have received word that they have begun to have concerns about Fresenius' corporate governance. CalPERS officials have begun to make inquiries about the tenure of the CEO, how the CEO selection was made, and about the number of Inside Directors. These informal inquiries are believed to be the precursor to an official investigation. Some of the recent, underperforming, investment decisions are believed to have led to CalPERS' interest in the corporate governance of Fresenius."

Sample of Sources Used:

• No author 2008. 'Global Principles of Accountable Corporate Governance' CalPERS [Online] Available at: http://www.calpers-governance.org/principles/docs/pub-20-2008-5-1.pdf

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