Governance and Shareholder Structure
Corporate governance is an important part of a company’s success, 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 Item 3.10 of the German Corporate Governance Code (Code) and Section 289a (1) of the German Commercial Code (HGB).
Declaration of Conformity and Corporate Governance Reporting
In the 2014 fiscal year, the Executive and Supervisory Boards dealt intensively with the company’s corporate governance and the recommendations of the Code published on June 24, 2014. The Executive Board and the Supervisory Board resolved in December 2013 to issue the following Declaration of Conformity as per Section 161 of the German Stock Corporation Act (AktG). The Declaration of Conformity has since been made permanently available to the general public on the company’s website.
The 2014 Declaration of Conformity Issued by Wacker Chemie AG’s Executive and Supervisory Boards
General Declaration Pursuant to Section 161 of the German Stock Corporation Act
In December 2013, the Executive Board and the Supervisory Board of Wacker Chemie AG issued a 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 in the version dated May 13, 2013, with the following exceptions, and will continue to comply with the recommendations of the Code in the version dated June 24, 2014, except as follows:
a) D&O Insurance Deductible for Supervisory Board Members
The law and the Articles of Association set clear limits in regards to the 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, an Executive Board is responsible for independently managing the corporation. A 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 operations or the implementation of corporate strategy. The same applies to measures taken to avert damage or loss to the company. Since the Supervisory Board members receive a relatively low representation allowance compared with the Executive Board members’ compensation, we do not consider a deductible to be reasonable for members of the Supervisory Board.
b) Appropriate Representation of Women on the Executive Board
The considerable importance that Wacker Chemie AG attaches to diversity extends to Executive Board membership. Nonetheless, expertise – including experience gained abroad – and qualifications are the key criteria here. For this reason, we do not consider it expedient to prioritize “the aim of appropriate representation of women” over expertise and qualifications.
c) Formation of a Nomination Committee within the Supervisory Board
The Supervisory Board is 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) Announcement of Proposed Candidates for the Chair of the Supervisory Board to the Shareholders
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, which is also not provided for under German law. For these reasons, we do not comply with this recommendation.
e) Naming of a Specific Target Number of Independent Members of the Supervisory Board
In its current composition, Wacker Chemie AG’s Supervisory Board complies with the requirements concerning an adequate number of independent supervisory board members. What is more, in its future recommendations to the shareholders in respect of appointments, the Supervisory Board will make sure it proposes what it considers to be an adequate number of independent candidates. Setting a specific target for the number of independent Supervisory Board members would not only restrict the selection of suitable candidates for that body, but also curb the rights of the shareholders to select those candidates that they consider the most appropriate for the task. For these reasons, we do not comply with this recommendation.
f) Time Limitation on Applications for Judicial Appointment of a Supervisory Board Member
According to this recommendation, applications for the judicial appointment of a Supervisory Board member should be limited in time until the next Annual Shareholders’ Meeting.
We did not follow this recommendation. Proposals for a candidate to be appointed by the court are agreed in advance with the majority shareholder in any case. Due to the majority situation, the subsequent election of the same candidate at the next Annual Shareholders’ Meeting would only be confirmation of his/her appointment, which is superfluous from our point of view.
Wacker Chemie AG’s largest shareholder is still Dr. Alexander Wacker Familiengesellschaft mbH, Munich. It holds over 50 percent of the voting shares in Wacker Chemie AG (2013: over 50 percent).
Blue Elephant Holding GmbH (Pöcking, Germany) once again had no voting-share changes to report in 2014, That means it still holds over 10 percent (2013: over 10 percent) of Wacker Chemie AG.