Corporate Governance Report and Declaration on Corporate Management
Corporate governance is an important part of a company’s success and of responsible corporate management and supervision. Wacker Chemie AG attaches great importance to the rules of proper corporate governance. In this report, the Executive Board provides details – also for the Supervisory Board – on corporate governance in accordance with Section 3.10 of the German Corporate Governance Code (the Code) and Sections 289 f and 315 d of the German Commercial Code (HGB).
Declaration of Conformity and Corporate Governance Reporting
In 2017, the Executive Board and the Supervisory Board dealt intensively with the company’s corporate governance and the recommendations of the Code in its currently valid version published on February 7, 2017. The Executive and Supervisory Boards resolved in December 2017 to issue the following Declaration of Conformity, which is available to the general public on the company’s website.
Declaration of Conformity 2017 Issued by the Executive Board and Supervisory Board of Wacker Chemie AG
1. General Declaration Pursuant to Section 161 of the German Stock Corporation Act
In December 2016, the Executive Board and the Supervisory Board of Wacker Chemie AG issued their most recent declaration of conformity pursuant to Section 161 of the German Stock Corporation Act. Since that time, Wacker Chemie AG has complied with the recommendations of the German Corporate Governance Code (the Code) as amended on May 5, 2015 – with the exceptions listed below in Section 2 a), c), d), e), g) and h) in the following. It has also complied with the recommendations of the Code as amended on February 7, 2017 – with the exceptions listed below in Section 2.
Wacker Chemie AG will continue to comply with the recommendations of the Code in the version dated February 7, 2017, with the exceptions listed hereinafter.
a) D&O Insurance Deductible for Supervisory Board Members (Section 3.8 (2))
German law and a company’s articles of association set clear limits with regard to a supervisory board’s ability to exert influence on the business activities of a stock corporation. Pursuant to Section 76 (1) of the German Stock Corporation Act, the executive board has direct responsibility for managing the corporation. The supervisory board is instrumental in defining the main features of corporate strategy. However, beyond this contribution, the supervisory board’s abilities are limited in terms of influencing the implementation of corporate strategy or operations. The same applies to measures taken to avert damage or loss to the company. Furthermore, since our Supervisory Board members receive only a relatively small amount for reimbursement of expenses compared to our Executive Board compensation, we do not deem the agreement of a deductible reasonable for members of our Supervisory Board.
b) Forward-Looking Assessment Basis for Variable Compensation of Executive Board Members (Section 4.2.3 (2))
The variable components of the Executive Board members’ compensation are calculated on a three-year (= multiyear) assessment basis. Furthermore, 15 percent of the variable compensation is paid in the form of shares that are subject to a holding period of two years. Even if the assessment basis is not essentially forward-looking, we are of the opinion that our compensation system is balanced and suitable for setting the right incentives for a sustainable corporate policy. Our compensation system ensures that our Executive Board members participate in positive and negative developments at the company over a longer period – by means of the share component on the one hand and the average assessment over a three-year period on the other.
c) Formation of a Nomination Committee within the Supervisory Board (Section 5.3.3)
A supervisory board is required to establish a nomination committee that is exclusively composed of shareholder representatives and whose task it is to make recommendations to the supervisory board with regard to candidates suitable for proposal to the annual shareholders’ meeting.
We do not comply with this recommendation because, in view of our shareholder structure, we do not believe that the formation of such a committee is appropriate. Due to the majority situation, nominations to the Supervisory Board must be agreed with the majority shareholder in any case, so that an additional nomination committee would not serve to increase efficiency.
d) Defining Concrete Objectives Regarding the Number of Independent Members of the Supervisory Board (Section 5.4.1 (2))
The Supervisory Board of Wacker Chemie AG, as it is composed at present, meets the requirements of the Code regarding an adequate number of independent members. The Supervisory Board will continue to ensure that, in future elections, it recommends to the shareholders what it considers to be an appropriate number of independent candidates. Additionally defining a concrete objective in this regard would not only limit the choice of suitable candidates for the Supervisory Board, but also restrict the shareholders’ right to elect those Supervisory Board members whom they consider to be the most suitable. For these reasons, we do not comply with this recommendation.
e) Limit to Supervisory Board Members’ Term of Office (Section 5.4.1 (2))
According to this recommendation, the supervisory board shall determine a general limit to its members’ term of office. A generally applicable term limit of this sort is not required in our opinion, as we consider an individual analysis of our Supervisory Board members to be more effective. This particularly applies since the Code provides for self-inspection of the supervisory board and its members anyway as part of the regular examination of efficiency. Furthermore, a general term limit would restrict the majority shareholder’s freedom to choose representatives on the Supervisory Board at its own discretion in fulfillment of its corporate responsibility.
f) Curriculum Vitae of Supervisory Board Members (Section 5.4.1 (5))
According to this recommendation, proposals for candidates for the supervisory board should be accompanied by a curriculum vitae, while the résumés of existing members should be published on the company’s website. We fulfill the legal requirements regarding the proposals for candidates. Furthermore, the annual report includes the essential information on our Supervisory Board members. We believe that such information is sufficient. We do not see what additional merit a curriculum vitae could have – in particular when taking into account the rights of privacy of our Supervisory Board members.
g) Time Limit Placed on Applications for the Judicial Appointment of a Supervisory Board Member (Section 5.4.3)
According to this recommendation, applications for the judicial appointment of a supervisory board member shall be limited in time up to the next annual shareholders’ meeting.
We do not comply with this recommendation. Proposals for candidates to be appointed by the court are agreed with the majority shareholder beforehand anyway. In view of the majority situation, the election of this same candidate at the next Annual Shareholders’ Meeting would merely constitute a confirmation of his/her appointment, which we consider redundant.
h) Announcement of Proposed Candidates for the Chair of the Supervisory Board to Shareholders (Section 5.4.3)
According to this recommendation, shareholders shall be informed of any candidates for the supervisory board chair even though, as a rule, the supervisory board has not yet been appointed. Under German law, the supervisory board chair must be elected by, and from among, the supervisory board members. There is no legal requirement to announce the candidates for the chair from among a yet-to-be-appointed group of supervisory board members. Furthermore, this would result in a de facto predetermination that is also not provided for under German law. For these reasons, we do not comply with this recommendation.
A new recommendation concerning preparation of a profile of skills and expertise for the entire supervisory board was included in the version of the Code of February 7, 2017 (Section 5.4.1 (2)). Wacker Chemie AG has complied with this recommendation since a corresponding resolution was taken by the Supervisory Board on September 21, 2017.
Corporate Governance Reporting
Shareholders and Annual Shareholders’ Meeting
Transparent Information for Shareholders and the Public
WACKER’s aim is to inform all of the company’s target groups – shareholders, shareholder representatives, analysts and the media – as well as the interested general public promptly and without preference. We regularly publicize important company dates in a financial calendar published in our Annual Report, in the interim reports and on our website. Capital market participants are in close contact with our Investor Relations team. We inform investors and analysts about the current and future development of business in telephone conferences held whenever a quarterly report is published. We regularly attend roadshows and investors’ conferences. Once a year, we organize an event for analysts. Important presentations are available on the internet, as well as all press releases and ad-hoc disclosures in both German and English, the online version of the Annual Report, all interim reports and the Sustainability Report. Further information is provided by our online customer magazine, media library and Podcast Center. www.wacker.com
Annual Shareholders’ Meeting
The Annual Shareholders’ Meeting provides an efficient and inclusive forum for informing shareholders about the company’s situation. Even before the Annual Shareholders’ Meeting begins, shareholders receive important information about the previous fiscal year in the Annual Report. The agenda items are described and the conditions of attendance explained in the invitation to the Annual Shareholders’ Meeting. The notice of the Annual Shareholders’ Meeting – together with all legally prescribed reports and documents, including the Annual Report (of which the consolidated financial statements and the combined management report form part) – as well as the annual financial statements of Wacker Chemie AG are also available on the company’s website. After the Annual Shareholders’ Meeting, we publish the attendance figures and the results of the votes on the internet. All these communication measures contribute to the regular exchange of information with our shareholders. WACKER helps its shareholders exercise their voting rights by giving them the option of casting their vote either in person or by proxy. Proxies are available to exercise shareholders’ voting rights as instructed and can also be contacted during the Annual Shareholders’ Meeting.
Working Methods of the Executive and Supervisory Boards
Wacker Chemie AG has a dual management system as prescribed by the German Stock Corporation Act. It consists of the Executive Board, which manages the company, and the Supervisory Board, which supervises and advises the Executive Board in its management of the company. These two bodies are kept strictly separate from one another with regard to both their membership and their spheres of competence. The Executive and Supervisory Boards collaborate closely, however, to ensure WACKER’s sustainable long-term success.
The Executive Board currently consists of four members. It bears direct responsibility for managing the company and represents Wacker Chemie AG in all dealings with third parties. The Executive Board’s actions and decisions are driven by the company’s interest and the aim to sustainably increase the Group’s value. With this goal in mind, the Executive Board determines the WACKER Group’s strategic alignment. It then steers and monitors this by allocating funds, resources and capacities, and by supporting and overseeing the operating units. The Executive Board also ensures compliance with legal requirements and an appropriate risk management system and control.
While the members of the Executive Board bear joint responsibility for managing the company, each individual member is directly responsible for managing his/her respective unit. All Executive Board decisions require a simple majority. In the case of a tie of votes, the president & CEO has the deciding vote. However, he/she does not have the right to veto Executive Board resolutions.
Close Collaboration between the Executive Board and the Supervisory Board
The Executive Board and the Supervisory Board work together closely to promote the interests of the company. Their common goal is the sustainable growth of the company and the enhancement of its value. The Executive Board reports to the Supervisory Board and the Audit Committee regularly, promptly and comprehensively on all relevant issues of strategy, planning, business development, risk exposure, risk management and compliance. The Supervisory Board chairman likewise maintains contact with the Executive Board, in particular with the president & CEO, in the period between meetings, consulting with that body on the above-mentioned issues. The Executive Board explains any deviations from approved business plans and objectives to the Supervisory Board and gives reasons for these deviations.
The Rules of Procedure for Wacker Chemie AG’s Executive Board stipulate that certain measures require the consent of the Supervisory Board before their implementation. These include approving the annual budget (including financial and investment planning), acquiring and disposing of shares in companies, establishing new production or business units, or suspending existing ones, and concluding sizable long-term loans.
The Supervisory Board appoints, oversees and advises the Executive Board and is directly involved in any decisions of crucial importance to WACKER. Fundamental decisions on the company’s development require Supervisory Board approval.
Supervisory Board Composition
The Supervisory Board comprises 16 members. In compliance with the German Co-Determination Act (MitbestG), it has an equal number of shareholder and employee representatives. Shareholder representatives are elected by the Annual Shareholders’ Meeting and employee representatives by the employees, as stipulated by the German Co-Determination Act. As a rule, the term of office is about five years.
Targets for the Composition and Skills Profile of the Supervisory Board of Wacker Chemie AG
WACKER has always placed importance on having highly qualified individuals sit on its Supervisory Board. In compliance with the recommendation made in Item 5.4.1 of the Code, WACKER’s Supervisory Board resolved in 2010 to set itself concrete objectives with respect to its composition. In September 2017, the Supervisory Board revised these and resolved on the following new objectives for its composition (including a profile of skills for the entire Supervisory Board), taking into account the recommendations of the Code:
The Supervisory Board shall be composed in such a way that all its members have the knowledge, skills and professional experience required to properly perform their duties.
(I) Targets for Composition
1. International Expertise
In view of the international nature of the company’s business activities, the Supervisory Board shall have an appropriate number of members – but at least one – with international experience.
2. Prevention and Handling of Conflicts of Interest
The Supervisory Board’s Rules of Procedure already contain extensive provisions on members’ conflicts of interest. In addition, the Supervisory Board actively strives to prevent conflicts of interest that are material and not merely of a temporary nature, and takes this goal into consideration when making recommendations to the Annual Shareholders’ Meeting.
3. Age Limit for Supervisory Board Members
The provisions concerning an age limit set down by the Supervisory Board in its Rules of Procedure must be observed.
As regards the diversity of its composition, the Supervisory Board strives to take account of different professional experience, professional expertise and educational backgrounds and, in particular, to ensure appropriate representation of women and men. In accordance with Section 96 (2) of the German Stock Corporation Act (AktG), at least 30 percent of the members of the supervisory board must be women and at least 30 percent men.
(II) Skills Profile
When filling the positions on our Supervisory Board, we strive to achieve a mix of young and old, industry insiders and those from other sectors, and different professional backgrounds. We expect all members to be willing and able to make the necessary commitment to their Supervisory Board duties. Beyond that, the Supervisory Board as a whole must have the skills, knowledge and experience that are important to the WACKER Group’s business activities and that enable it to properly oversee the company and provide professional advice to the Executive Board. This includes the following:
- The Supervisory Board should have sufficient members with the necessary expertise in corporate management, accounting, financial controlling, risk management, corporate governance and compliance.
- The Supervisory Board as a whole must be familiar with the chemical industry (Section 100 (5) AktG).
- At least one member of the Supervisory Board must have expertise in the fields of accounting or auditing (Section 100 (5) AktG).
The Supervisory Board does not comply with the recommendation made in Item 5.4.1 of the Code as amended on February 7, 2017, to set a general term limit for the length of service of its members. The reasons for this decision are given in the Declaration of Conformity of December 2017.
The Supervisory Board believes that it comprises an adequate number of independent members. All of its shareholder representatives are classed as independent within the meaning of Item 5.4.2 of the Code. For the reasons given in the Declaration of Conformity of December 2017, we do not comply with the additional recommendation made in Item 5.4.2 of the Code as amended on February 7, 2017, to name a specific target number of independent members.
The Supervisory Board will take into account the objectives it has set as well as its profile of skills when making its nomination proposals to the Annual Shareholders’ Meeting. The current composition of the Supervisory Board complies with the objectives set in September 2017.
Committees Increase the Supervisory Board’s Efficiency
The Supervisory Board has constituted three professionally qualified committees to help it perform its duties optimally. The work of those committees is reported on regularly at Supervisory Board meetings.
The Executive Committee prepares the Supervisory Board’s personnel decisions, especially the appointment and dismissal of Executive Board members and the nomination of the president & CEO. In addition, it negotiates contracts with Executive Board members and develops a compensation system that the full Supervisory Board then uses as a basis for determining the compensation for Executive Board members. In 2017, the Executive Committee consisted of the Chairman of the Supervisory Board, Dr. Peter-Alexander Wacker, and Supervisory Board members Manfred Köppl and Franz-Josef Kortüm.
The Audit Committee does the groundwork for the Supervisory Board’s decision on the adoption of the annual financial statements and the approval of the consolidated financial statements. To this end, the committee is obliged to pre-audit the annual financial statements, the consolidated financial statements, the combined management report and the proposal on appropriation of profits. In addition, it discusses and examines the half-yearly financial reports and the quarterly figures. The Audit Committee gives the Supervisory Board a well-founded recommendation as to which auditors it should propose to the Annual Shareholders’ Meeting. In accordance with the resolution of the Annual Shareholders’ Meeting, it awards the auditing contract to the auditors and determines the focus of auditing. It then monitors the audit, in particular the auditors’ independence and the services they deliver. Above and beyond that, the Audit Committee reviews the accounting process and the effectiveness of the internal control, risk management and auditing systems, as well as compliance-related issues. The members of this committee in 2017 were Franz-Josef Kortüm (as chairman), Dr. Peter-Alexander Wacker and Manfred Köppl.
In addition, there is the Mediation Committee, the formation of which is stipulated by German law. Its duties are to prepare proposals for the Supervisory Board concerning the appointment, and revocation of appointments, of Executive Board members in cases where they fail to achieve the required two-thirds majority of the votes of the Supervisory Board members in the first ballot. In 2017, the committee comprised Dr. Peter-Alexander Wacker (as chairman), Manfred Köppl, Franz-Josef Kortüm and Eduard-Harald Klein.
Key Corporate Management Practices
Compliance as a Key Managerial Duty of the Executive Board
At WACKER, managerial and monitoring duties include ensuring that the company complies with legal requirements and that employees observe internal company regulations. WACKER’s compliance management system is regularly reviewed and adapted.
These tasks are the responsibility of the compliance management department. For a detailed description of compliance management, please refer to the Risk Management Report on page 86. The company has appointed and trained compliance officers in Germany, Norway, the USA, China, Japan, India, South Korea, Brazil, Mexico, Singapore, Russia and the United Arab Emirates, who hold regular training courses to inform employees of key legal provisions and internal regulations. They also serve as contacts whenever employees have questions or need advice, information and training relating to compliance.
Principles of Corporate Ethics
- Beside our vision and goals, our ethical principles form the third pillar of WACKER’s corporate policy guidelines. These principles – embedded in five separate codes – govern how the company goals should be achieved. A set of rules consisting of regulations and instructions supplement the codes.
- Code of Conduct: this contains our principles for dealing with business partners and third parties. It also governs the handling of information, confidentiality and data security, the prevention of money laundering, and the separation of personal and business interests.
- Code of Innovation: this specifies our principles concerning research and development, partnerships, patents and innovation management.
- Code of Teamwork & Leadership: this outlines our understanding of teamwork and leadership. Key aspects here include trust and esteem, motivation and success, recognition and development, teamwork and equal opportunity, work-life balance and the positive example set by managerial employees.
- Code of Safety: this defines our safety culture and sets safety guidelines for workplaces, facilities, and products and their transport.
- Code of Sustainability: this lists principles for sustainability to be adhered to by R&D, procurement and logistics, production and products, and describes our commitment to society.
The codes are available at: www.wacker.com/cms/en/wacker_group/wacker_facts/policy/policy.jsp
Responsible Care® and the Global Compact – Integral Parts of Corporate Management
Two voluntary global initiatives form the basis for sustainable corporate management at WACKER: the chemical industry’s Responsible Care® initiative and the UN’s Global Compact. WACKER has been an active member of the Responsible Care® initiative since 1991. Program participants undertake to continually improve health, safety and environmental performance on a voluntary basis – even in the absence of statutory requirements. WACKER is equally committed to the UN’s Global Compact initiative. We observe the Global Compact’s ten principles, which address social and environmental standards, anticorruption and the protection of human rights. We also expect our suppliers to respect the principles of the Global Compact, and we evaluate them on this point in our risk assessments.
In 2011, WACKER created an internal Corporate Sustainability department, which implements the company’s voluntary commitments under Responsible Care® and the Global Compact, and coordinates its sustainability activities worldwide.
Companies can be commercially successful only if they have society’s trust. Consequently, WACKER is serious about its social responsibilities toward communities near its sites and wherever people are in need around the world. We regularly promote and support a wide variety of charitable projects, organizations and initiatives. Our commitment covers activities relating to science, education, sports and various charities.
Further Information on Corporate Governance at WACKER
Compliance with the Provisions of Art. 17 of MAR
We comply with the provisions of Art. 17 of MAR (EU regulation No. 596/2014 – Market Abuse Regulation). For a number of years, we have maintained an ad-hoc publicity coordination unit in which representatives of various specialist areas examine issues for their ad-hoc relevance. In this way, we guarantee that potential insider information is handled in accordance with the law. Employees who have access to insider information as part of their jobs are included in insider lists.
Share Dealings by the Executive and Supervisory Boards
Persons discharging managerial responsibilities (at Wacker Chemie AG, these are members of the Executive and Supervisory Boards) as well as persons closely associated with them are obligated under Art. 19 of MAR to notify the German Federal Financial Supervisory Authority (BaFin) and the company within three business days of transactions conducted on their own account relating to the shares or debt instruments of that company or to derivatives or other financial instruments linked thereto. A reporting obligation exists, however, only where the total volume of the transactions made by the person concerned reaches or exceeds €5,000 within a calendar year.
The transactions reported to Wacker Chemie AG in 2017 were published in the proper manner; more detailed information can be found at: www.wacker.com/cms/en/investor-relations/corporate-governance/directors_dealings/directors_dealings.jsp
Dealing Responsibly with Opportunities and Risks
Dealing responsibly with risks is an important part of good corporate governance. WACKER has in place an opportunity and risk management system to regularly identify and monitor material risks and opportunities. Its objective is to recognize risks at an early stage and minimize them through systematic risk management. The Executive Board informs the Supervisory Board regularly about existing risks and their development. The Audit Committee regularly reviews the accounting process and the effectiveness of the internal control, risk management and auditing systems. It is also involved in auditing the financial statements. The opportunity and risk management system is continuously being enhanced and adapted to meet changing conditions.
Accounting and Auditing
As stipulated by the Corporate Governance Code, we have agreed with the auditors, KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, that the Chairman of the Supervisory Board shall be informed without delay during the audit about any grounds for disqualification and/or bias. In addition, the auditors shall immediately report all significant discoveries and events which concern the Supervisory Board’s duties. If, in the course of their audit activities, the auditors establish facts that reveal errors in the Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act, the Supervisory Board shall be notified accordingly and/or a note included in the audit report.
WACKER has concluded a financial liability insurance policy that also covers the activities of the Executive and Supervisory Board members (i.e. D&O insurance). This insurance provides for a statutory deductible for the members of the Executive Board.
Supporting the Participation of Women in Executive Positions
Effective May 1, 2015, the German Act on Equal Participation of Women and Men in Executive Positions in the Private and the Public Sector calls for the Supervisory Board of Wacker Chemie AG to be composed of at least 30 percent female members and at least 30 percent male members. These requirements applied to new appointments for the first time as of January 1, 2016. Since that date, no new shareholder representatives have been appointed to the Supervisory Board of Wacker Chemie AG. When employee representative and Siltronic employee Hansgeorg Schuster left the Supervisory Board following the deconsolidation of Siltronic AG on March 15, 2017, Barbara Kraller was appointed as replacement employee representative by order of the District Court of Munich on April 24, 2017. The proportion of female members on the Supervisory Board therefore currently totals 18.75 percent (one shareholder representative and two employee representatives; prior year: 12.5 percent).
The act also requires Wacker Chemie AG to specify target values for the proportion of women on the Executive Board and in the two management levels below the Executive Board. The target values for the Executive Board are set by the Supervisory Board and those for the two management levels below the Executive Board are set by the Executive Board.
Both the target value for the Executive Board (zero; deadline for implementation: June 30, 2017) and the respective target values for the two management levels below the Executive Board (target value for management level directly below the Executive Board: 10 percent; target value for the second management level below the Executive Board: 17.5 percent; deadline for implementation in both cases: June 30, 2017) were achieved or exceeded before the deadline for implementation.
In September 2017, the Supervisory Board set the target for the proportion of women on the Executive Board for the period up to June 30, 2022 at zero.
In June 2017, the Executive Board of Wacker Chemie AG set target values of 16 percent for the management level directly below the Executive Board and 18 percent for the second management level below the Executive Board, with a deadline for implementation of December 31, 2019 in both cases.
1. Diversity Strategy for the Executive Board
The Executive Board of Wacker Chemie AG shall be composed in such a way that all its members have the knowledge, skills and experience required to manage a chemical company that is active in international markets. We are convinced that only a diverse group of individuals can do justice to this task. The decisive factor is achieving a balanced composition that reflects a cross-section of the duties involved.
Proceeding on this basis, the Supervisory Board mainly takes the following aspects of diversity into account when proposing new members of the Executive Board:
- High priority is accorded to different educational backgrounds and professional careers. The executive board of a chemical company must have members with scientific expertise and/or experience in the chemical industry. At the same time, knowledge and experience of accounting, financial management, corporate decision-making, planning and strategy are required, as is a profound understanding of the workings and requirements of the capital markets.
- What is more, in a global company like Wacker Chemie AG, different cultural backgrounds – or at least obvious international and intercultural experience – are essential.
- A balanced age structure across the entire Executive Board is also important. The Supervisory Board’s Rules of Procedure provide for a standard retirement age of 67, which must be taken into account when Executive Board members are appointed.
- We are convinced that mixed teams achieve better results – and that also means having women on the Executive Board. In this context, a whole range of measures has already been put in place across the company to raise the proportion of women in management positions.
The goal of the diversity strategy described above is to give the Executive Board an optimal composition to ensure the company is managed in a manner that is both successful and sustainable. A diverse composition guarantees that the Executive Board can assess all relevant issues with the appropriate expertise, view all material aspects from different standpoints and set the right priorities. The standard retirement age for Executive Board members ensures that the company can profit from the longstanding professional and life experience of individual members. At the same time, it enables younger managers to advance to the Executive Board and contribute new ideas and impetus.
The full Supervisory Board takes the diversity strategy into account when making appointments to the Executive Board. The Executive Committee, which is tasked with preparing the personnel decisions of the Supervisory Board, regularly discusses long-term succession planning for the Executive Board, and also takes account of the company’s management staff planning in consultation with the Executive Board members.
In 2017, WACKER renewed the service contracts of its longstanding president & CEO, Dr. Rudolf Staudigl (age 63), and of Executive Board member Dr. Christian Hartel (age 46), who first joined the board three years ago. The standard retirement age, in particular, was given due consideration in this context, with Dr. Staudigl’s contract being renewed for a further three years only, until September 30, 2021. With their different professional backgrounds and experience, both these managers contribute to the diversity of the Executive Board.
2. Diversity Strategy for the Supervisory Board
The diversity that the Supervisory Board wishes to see in its own composition is reflected in the goals and the profile of skills it adopted in September 2017.
Accordingly, the diversity criteria of international and intercultural experience, a balanced age structure, and different professional experience, expertise and educational backgrounds are considered when positions on the Supervisory Board are filled. In addition, the Supervisory Board’s Rules of Procedure provide for a standard retirement age of 80 for its members. In accordance with the statutory requirements, the Supervisory Board must also comprise at least 30 percent female members and 30 percent male members, and must have an equal number of shareholder and employee representatives.
The goal of the diversity strategy is to ensure that the Supervisory Board as a whole is able to effectively oversee and advise the Executive Board. A Supervisory Board whose members are diverse in line with above-mentioned criteria is better placed to assess topics from different standpoints, and to scrutinize the Executive Board’s management of the company, its decisions and its strategy in a constructive and comprehensive manner. The retirement-age provision enables members to contribute their longstanding professional and life experience for the good of the company. At the same time, it ensures that younger individuals can advance to the Supervisory Board at regular intervals.
The Supervisory Board gives due consideration to this diversity strategy when presenting its recommendations for candidates to the Annual Shareholders’ Meeting; the next opportunity for this will be the Supervisory Board elections scheduled for 2018. What is more, during its regular examinations of efficiency, the Supervisory Board conducts a self-evaluation that also includes aspects such as its own composition and diversity.
In 2017, one change was made to the employee representatives on the Supervisory Board: following the appointment by court order of Barbara Kraller, the number of female Supervisory Board members rose to three.