Corporate governance refers to the way a company is responsibly managed and controlled. The Supervisory Board and the Board of Management acknowledge and endorse the principles of good corporate governance. We have therefore set out the central values and guiding principles for DBAG in a Code of Conduct. Our intention is to give every member of our staff a set of fundamental rules and to communicate to our business partners and investors that our dealings are firmly rooted in ethical principles and that we will always interact fairly in good partnership. Our guiding principles also encompass the avoidance of conflicts of interest and acknowledgement of our social responsibility. We act politically neutrally, but support social projects and commit to fair competition.
Code of Conduct, Corporate Governance Statement and Corporate Governance Report www.dbag.de/englisch/investor-relations/corporate-governance/
Our Corporate Governance Statement sets out the basic principles behind the conduct of our business; it is published on the Internet and is accessible there together with this report.
Consistent with the recommendation of the German Corporate Governance Code, the following is a combined report by the Supervisory Board and the Board of Management on the corporate governance practised at Deutsche Beteiligungs AG. Further information can be found in the Corporate Governance Statement and the Report of the Supervisory Board; that information is an integral part of our combined Corporate Governance Report. We will refer to other sections of this Annual Report on particular issues, if appropriate.
Compliance: Employees, transaction process, portfolio companies
Compliance by the management and staff with all legal requirements applicable to Deutsche Beteiligungs AG and its subsidiaries and with all internal rules has long been a Company objective and an integral part of our corporate culture. However, as a private equity firm, that objective extends not just to our own Company. DBAG also endorses the installation and ongoing development of compliance schemes at current and future portfolio companies. The compliance system of DBAG therefore consists of three components:
- compliance for DBAG staff
- compliance in the transaction process
- compliance at portfolio companies
A compliance manager oversees adherence by DB AG staff to the Code of Conduct and the rules set out in the compliance guideline. He is independent in his role and reports directly to the Spokesman of the Board of Management. The compliance guideline, for example, sets out the rules for receiving and giving gifts, for hospitality and invitations to events.
DBAG acts as a responsible investor. Compliance aspects have therefore also been integrated into the tra nsaction process, specifically in the due diligence process and in purchase agreements. An examination of compliance issues is required as an integral part of every due diligence process to ensure that potential portfolio companies also fulfil DBAG’s values. The basis for this is a questionnaire which, depending on the situation, can be integrated into the due diligence process in collaboration with the legal consultant for the transaction or with the assistance of a specialised compliance adviser, who may be commissioned additionally, if required. To minimise the liability risk for DBAG in compliance issues, warranty clauses to that effect will be included in every purchase agreement for a portfolio company.
DBAG employees who hold offices on a supervisory board or an advisory council at a portfolio company or act on behalf of a shareowner of a portfolio company are required to firmly endorse the introduction or ongoing development of a compliance system within the portfolio company. The DBAG Compliance Standard for Portfolio Companies serves as guidance. At present, nearly all portfolio companies have introduced a compliance system or are in the process of developing and launching a compliance system.
Composition of the Supervisory Board: Operability is key objective
The German Corporate Governance Code recommends that the Supervisory Board specify concrete objectives regarding its composition and report on these and on their implementation.
The key objective is the Supervisory Board’s operability; this objective is best addressed when the majority of its members are independent and not exposed to conflicts of interest, and when its members are broadly experienced in the multifaceted operations of DBAG and have expert knowledge of applicable accounting principles. The Supervisory Board is also of the opinion that the majority – or four – of its members should be independent, and the Chairman of the Supervisory Board should be one of them.
The current composition of the Supervisory Board reflects this objective.
The members of the Supervisory Board do not have business or personal relationships to the Company or its Boards, or to a controlling shareholder or a company with which that shareholder is affiliated, which could constitute a significant and not merely temporary conflict of interest. Should, contrary to expectations, conflicts of interest arise in individual instances, these are disclosed and dealt with appropriately by the Supervisory Board. The members of the Supervisory Board bring with them a wide range of professional and personal experience, including management responsibility abroad or in international companies in Germany. The age limit of 72, moreover, means that the Company can benefit as much as possible from these skills on the one hand; on the other hand, it is conducive to introducing changes in the Board’s composition. The latter also benefits from the newly introduced regular limitation of the term of office for Supervisory Board members for a maximum of three full terms, in addition to any partial term of office, insofar as that election to the Supervisory Board took place at a different time to the regularly recurring general elections. For a report on the specified target for the proportion of female members on the Supervisory Board, we refer to our Corporate Governance Statement.
Independence of corporate bodies: No conflicts of interest
Conflicts of interest on the part of members of the Board of Management and the Supervisory Board requiring immediate disclosure to the Supervisory Board did not come to our attention.
Principle of equal treatment: Timely information to all interested parties
More information on stock market activities
The principle of directing information on an event promptly and simultaneously to all interested parties ranks high in our communication policy. All major reports, announcements and presentations are accessible on the Internet synchronously with the respective event. The key presentations we prepare for meetings with investors are also available on our website. Any interested individual can take note of the dates and locations of road shows and investors’ conferences that we attend.
Our complete Annual Meeting is webcast live on the Internet. Shareholders may elect to exercise their voting rights personally or through a proxy of their choice or through a proxy appointed by the Company who is bound by their directives. Postal voting is also possible. All documents and information on the Annual Meeting are accessible in German and in English at our website.
Remuneration for Board of Management: Linked to corporate performance
Details on the remuneration for the members of the Board of Management and the Supervisory Board Remuneration report
The remuneration paid to the Board of Management is composed of fixed and performancerelated components, most of which have a long-term incentive. We issue an individualised statement of emoluments paid to the members of the Board of Management. Shareholders at the 2011 Annual Meeting approved the remuneration scheme with a vote of approximately 92 percent.
The remuneration paid to Supervisory Board members is solely composed of a fixed fee.
Strict rules on share ownership
Trading periods www.dbag.de/trading-periods
Apart from participating in the annual employee stock ownership plan, members of the staff and the corporate bodies may only purchase shares in Deutsche Beteiligungs AG within a limited frame. Shares may only be purchased and sold during specified periods of time. These periods largely begin subsequent to publication of the Annual Report and interim reports and to the Annual Meeting. They are announced on the website of Deutsche Beteiligungs AG.
Based on the nature of the business operations of Deutsche Beteiligungs AG, there are further rules that apply to trading in securities for DBAG staff. Irrespective of the trading restrictions for shares in Deutsche Beteiligungs AG, it is not permitted for members of the staff to deal in shares of portfolio companies of Deutsche Beteiligungs AG, or of companies undergoing the due diligence process or whose portfolio contains companies in which Deutsche Beteiligungs AG is considering an investment.
Reportable securities transactions (“directors’ dealings”)
The members of the Board of Management and the Supervisory Board of DBAG as well as related parties are required to report transactions in DBAG shares (§ 15a WpHG – German Securities Trading Act).
|Reporting individual||Corporate body||Date of transaction||Transaction||Number of shares||Price|
|Wilken von Hodenberg||Supervisory Board||19 March 2015||Sale||29,000||32.72|
|Susanne Zeidler||Board of Management||23 Sept. 2015||Purchase||1,000||27.00|
|30 Sept. 2015||Purchase||1,000||25.00|
The members of the Board of Management held a total of 34,613 no-par value shares as at 30 September 2015, or less than one percent of the subscribed capital of Deutsche Beteiligungs AG.
The members of the Supervisory Board held a total of 4,000 no-par value shares as at 30 September 2015, or less than one percent of the subscribed capital of Deutsche Beteiligungs AG.
Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act (Aktiengesetz – AktG)
The Board of Management and the Supervisory Board declare that, since issuance of the last Declaration of Conformity, Deutsche Beteiligungs AG has complied with the recommendations of the German Corporate Governance Code as amended on 24 June 2014 and as amended on 5 May 2015 from the time of their validity in their entirety and will continue to follow all of the recommendations in the Code.
There was only one temporary exception to the above: the Code as amended on 5 May 2015, which became effective on 12 June 2015, introduced a recommendation in clause 5.4.1 to specify a regular limit on the term of office for members of the Supervisory Board. On 10 September 2015, the Supervisory Board specified a regular limit to that effect. Since that date, we have also complied with this new recommendation.
We have, moreover, followed all of the suggestions in the Code and will continue to do so in the future.
Frankfurt am Main, November 2015
Deutsche Beteiligungs AG
|The Board of Management||The Supervisory Board|