Value Add Financial Measures Used by German Dax 30 Corporations as Part of Highly Professionalized Corporate Governance Management

Guenter Blendinger , Grzegorz Michalski

Abstract

Purpose. This research paper shows which value add measures are used by German DAX 30 corporations in their 2015 annual reports. It explains how different measures like shareholder value, economical value add (EVATM), return on capital employed (ROCE), return on equity (ROE) and others are calculated and how they correlate. Corporate governance has been highly professionalized which clearly shows in the annual reports of all firms. The requirement for “sustainable creation of value” as stated in the German Corporate Governance Codex (Regierungskommision Deutscher Corporate Governance Kodex, 2015) is made transparent as a core element in the companies’ annual reports. Design. 70% of the DAX 30 firms show value add data and some of them even highlight that value add has been made part of their corporate management approach. In turn this means that 30% of the firms are not showing value add data in a prominent way. The paper focuses on the 70% showing value add data and how EVA, company specific EVA-like measures or ROCE are the most used ones. Findings. The paper shows that ROCE with a factor of 0,97 correlates best with EVA and in absence of an EVA calculation is the best measure to represent value creation. Originality. As part of a dissertation the aim is to develop a best in class measurement system and comparison for corporate governance theoretical and empirical analyses. The paper has been presented at 21st European Scientific Conference of Doctoral Students - PEFnet2017 organized by the Faculty of Business and Economics of Mendel University in Brno, taking place on November 30, 2017 on the campus of Mendel University in Brno, Czech Republic.
Author Guenter Blendinger
Guenter Blendinger,,
-
, Grzegorz Michalski (EaE / IES / DLaC)
Grzegorz Michalski,,
- Department of Labor and Capital
Journal seriesReview of Innovation and Competitiveness : A Journal of Economic and Social Research, ISSN 1849-8795, e-ISSN 1849-9015, (15 pkt)
Issue year2018
Vol4
No1
Pages73-97
Publication size in sheets1.2
Keywords in EnglishCorporate Governance, Corporate Governance Codex, Economical Value Add, EVA, Return on Capital Employed, ROCE, value creation, DAX 30
URL https://hrcak.srce.hr/198715
Languageen angielski
File
Blendinger_Michalski_Value_Add_Financial_Measures.pdf 342,7 KB
Score (nominal)15
Citation count*2 (2019-11-29)
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