Declaration of Corporate Governance
Declaration of Corporate Governance
In the Declaration of Corporate Governance required under Article 289a HGB (German Commercial Code) we refer to the declaration we made under Article 161 Aktiengesetz (German Stock Corporation Act) (Declaration of Conformity) and explain our relevant management practices, which go well beyond statutory requirements. We also describe the functioning the Board of Management and the Supervisory Board and explain the composition and functioning of the Supervisory Board Committees.
Declaration pursuant to Article 161 German Stock Corporation Act
Good corporate governance is a high priority for both the Board of Management and the Supervisory Board. It includes open, prompt and consistent reporting and communication with our shareholders and other investors, business partners, employees and the public. You can find our current Declaration of Conformity here.
Relevant Management Practices
Sustainability, integrity and good corporate governance are, for us, the key components of an ethical corporate culture. They shape our conduct towards customers, suppliers, staff members, shareholders and the society as a whole.
The actions of our management and controlling bodies and our employees are governed by the values, principles and rules of responsible corporate governance, which are stated in the Code of Conduct, by our self-concept and our strategy. Within the frame of strategical determination by the Board of Management, specific goals are established and communicated. To accomplish our targets we rely on the enterprise and initiative of our managers and employees, with whom we have agreed on clear-cut principles of leadership. We achieve consensus on clearly defined objectives, and we regularly monitor how well we are meeting them. These agreements on aims are a fundamental component of our leadership philosophy and a crucial element of our remuneration system.
Functioning of Board of Management and Supervisory Board
As the management body of the Group parent company, the Board of Management is obliged to act in line with the corporation's interests. It consists of four members. It is responsible for corporate policy, the company's strategic orientation, financial, investment and personnel planning, resource allocation and the management of the divisions. The Board of Management is responsible for preparing the quarterly financial statements and the annual financial statements of Dyckerhoff AG, as well as the consolidated financial statements. It is also responsible for the establishment of an effective risk management system in the broadest sense, cares for compliance with legal requirements and internal guidelines. The Board of Management is supported by Executive Management Teams for business operations.
The activities of the Board of Management are regulated by its Standing Orders, which set out the matters reserved for the full Board of Management, the responsibilities of the areas of responsibility and the majorities necessary for passing resolutions.
Meetings of the Board of Management shall be called by the Chairman of the Board. A minimum of two members of the Board of Management may require that an extraordinary meeting of the Board of Management be called outside its regular meetings. The board meetings are chaired by the Chairman of the Board of Management, who also coordinates the areas of responsibility. In his absence the meeting shall be conducted by his Deputy. Should the Chairman of the Board of Management be absent for a longer period, a member of the Board of Management designated by the Supervisory Board's Chairman chairs the meeting. Persons who are not Board members can, if so resolved by the Board of Management, be admitted to board meetings in a consultative capacity.
Brief minutes have to be made of material discussions and resolutions. Resolutions of the Board of Management will be carried regularly at its meetings. Resolutions may also be carried without a meeting, however, in writing, by telex or by telephone, providing a majority of the Members of the Board of Management agree to such a procedure or take part in the vote; such resolutions shall be effected by the Chairman of the Board of Management. The Board of Management shall be quorate if a majority of its members vote on a resolution. Absent members may vote on a resolution by telephone. Proxy votes shall be permissible.
Resolutions of the Board of Management shall be passed by a simple majority. Should there be a tie, the Chairman of the Management Board shall decide. Should any resolutions concern the Standing Orders for the Board of Management, should they be of a fundamental kind, or should they touch the existence of the company, they must be unanimous.
The Board of Management reports to the Supervisory Board regularly, promptly and comprehensively on all issues regarding planning, the risk situation, the risk management and, the compliance that are of relevance to the corporation. In doing so, the Board of Management also addresses any deviations in business performance from the established plans and goals, and accounts for such deviations. The Board of Management consults with the Supervisory Board on the corporation's strategic direction and discusses the progress made in implementing the strategy with the Supervisory Board on a regular basis.
The Supervisory Board monitors and advises the Board of Management on the management of company business. Until the end of the current election period it consists of nine members. Then, starting with the end of the Annual General Meeting 2014, it will consist of six members. Two thirds of the members are shareholder representatives and one third are employee representatives. It performs its functions in accordance with legal requirements, the German Corporate Governance Code, the Articles of Association and its own Standing Orders. At regular intervals, the Supervisory Board discusses the business development and planning, strategy and its implementation, and the risk management system. The approval of the Supervisory Board is mandatory for major decisions, such as company acquisitions or sales, large-scale investments and financing measures. It decides on the appointment of the Board of Management and is also responsible for prolonging the terms of membership of the Board members or alternatively dismissing them. Further, he decides on the remuneration structure and the remuneration system of the Board of Management, respectively, and determines the remuneration of each member of the Board of Management. In addition it is responsible for approving the annual financial statements presented by the Board of Management and the consolidated financial statements. The approval of the Supervisory Board renders the annual financial statements formally adopted.
It elects a Chairman and one or more than one Deputy Chairman from among its members for the duration of its term of office. Subsequent to the Annual General Meeting 2011, the Supervisory Board has elected one Chairman and two Deputy Chairmen. The Supervisory Board can form committees from among its members, to whom it can, as far as the law allows, transfer decision-making authority.
The meetings of the Supervisory Board are convened by the Chairman in written form or by telefax or email. One week's notice must be given of such meetings, not including the date of the convening notice and the date of the meeting itself. The period of notice can, however, be reduced to three days in cases regarded as urgent, in which case the meeting can be convened orally or by telephone. The notice convening the meeting must state the individual items of the agenda clearly enough for Supervisory Board members who do not attend the meeting to be able to exercise their right to vote in writing. Resolutions are to be adopted only with reference to the agenda items specified in the convening notice. If there is an agenda item that is not listed in the convening notice, a resolution may be adopted on that item only if no member of the Supervisory Board objects.
If a member of the Supervisory Board is prevented from attending the meeting, he can authorize another member to submit his vote in written form. In that case the non-attending member is deemed to be present. These provisions apply also to the Chairman and Deputy Chairmen of the Supervisory Board.
The resolutions of the Supervisory Board are adopted during meetings. Alternatively it is permissible for resolutions to be adopted in writing and by votes cast by telefax, by email or by phone, if so ordered by the Supervisory Board Chairman and if no member of the Supervisory Board enters an objection to such procedure within the reasonable period of time specified by the Chairman.
The Supervisory Board constitutes a quorum when at least half of the total membership of the Board takes part in the passing of resolutions either in person or by voting in writing. The Supervisory Board adopts its resolutions by simple majority of the votes cast, except where the law prescribes otherwise. The Chairman of the Supervisory Board decides on the sequence of events at meetings and the voting procedure. A minute must be made of the resolutions adopted.
Subsequent to the Annual General Meeting 2011, the Supervisory Board has formed an Executive Committee, consisting of the Chairman of the Supervisory Board and two other members of the Supervisory Board, for the duration of its term of office. The Executive Committee submits proposals for resolutions on the total remuneration of the individual members of the Board of Management and for resolutions and reviews of the remuneration system for the Board of Management. It also prepares proposals for the Supervisory Board in plenum concerning the appointment and dismissal of members of the Board of Management and the prolongation of their mandates.
Subsequent to the Annual General Meeting 2011, the Supervisory Board has also set up a Finance Committee. It was set up for the duration of its term of office and consists of three members. This committee concerns itself with the application of the accounting principles and with the monitoring of the annual audit, which includes checking on the independence of the auditor and the additional services performed by the auditor. It also handles all the other tasks that the German Stock Corporation Act and the German Corporate Governance Code can require of what the Code calls the Audit Committee. Excluded and reserved for monitoring of the Supervisory Board in plenum are the effectiveness of the internal control system, the risk management system and the internal audit system. The Finance Committee, however, being responsible for preparing the check on the effectiveness of the systems.
An overview of its work can be found in the Report of the Supervisory Board.
Each member of the Supervisory Board is paid a fixed remuneration of EUR 40,000 per year for their services, payable at the end of the fiscal year. The Chairman of the Supervisory Board receives two and a half times that amount and each of his deputies receives one and a half times that amount. Furthermore, every member of the Supervisory Board who is also a member of one of its committees is paid an additional one quarter of the remuneration sum, and each chair of such a committee receives one half instead of one quarter extra. This does not apply to the person chairing the Executive Committee of the Board of Management. The members of the Executive Committee are paid the extra one fourth only if they do not already receive an enhanced Supervisory Board remuneration for other reasons.
The joint report of the Board of Management and the Supervisory Board on Dyckerhoff's Corporate Governance can be found here.