Corporate governance declaration 2010/2011
The term corporate governance stands for responsible corporate management and control geared to long-term value creation. The Executive Board and Supervisory Board are committed to securing the future of the Company and sustainable value growth through responsible governance geared to the long term.
In addition to the corporate governance declaration below, more information on corporate governance at thyssenkrupp is provided in the Corporate governance report for the 2010/2011 fiscal year.
thyssenkrupp AG has issued the following corporate governance declaration pursuant to § 289a German Commercial Code (HGB) which is part of its management report for the 2010/2011 fiscal year.
How the Executive Board and the Supervisory Board operate
The Executive Board and Supervisory Board work together closely in the interest of the Company. An intensive, continuous dialogue between the two boards is the basis for efficient corporate management. Their common goal is to ensure the continued existence of the Company and the sustainable creation of value. In accordance with the statutory requirements for a German stock corporation, thyssenkrupp AG has a two-tier governance system characterized by a separation of personnel between management and supervisory organs.
Executive Board responsible for management and conduct of business
The Executive Board of thyssenkrupp AG, which currently comprises six persons, is responsible for managing the Group and the Group holding company. It performs its management task as a collegiate body. This task includes in particular determining corporate goals, defining the strategy of the Group, controlling and monitoring the performance of the Group, corporate planning and Group financing.
The members of the Executive Board have joint responsibility for overall management. They work together as colleagues and keep each other informed of important measures and events in their departments. Notwithstanding the overall responsibility of all members of the Executive Board, the individual members of the Executive Board manage the departments they have been assigned on their own responsibility within the framework of Executive Board resolutions. The work of the Executive Board is specified in more detail in the rules of procedure for the Executive Board, in which matters reserved for the full Executive Board and other decision-making modalities are also defined in more detail. The allocation of departments to the individual members of the Executive Board is set out in an organization chart forming part of the rules of procedure.
The Executive Board regularly agrees the strategy of the Company with the Supervisory Board, ensures it is implemented and discusses the progress of implementation with the Supervisory Board at regular intervals. The Executive Board provides the Supervisory Board with regular detailed updates on all issues of relevance to the Company related to business performance, financial position, planning and target achievement, the risk situation and risk management. Variances between actual performance and defined plans and targets are discussed and explained. The Executive Board's regular reports also include the subject of compliance, i.e. measures to ensure adherence to statutory requirements and Company policies.
The Executive Board passes resolutions in meetings that usually take place at least twice a month and are generally chaired by the chairman of the Executive Board. Each member of the Executive Board may demand the convening of a meeting, giving notice of the subject for discussion; similarly, each member may demand that a subject be included on the agenda of a meeting. Decisions of the full Executive Board are made by simple majority of the members taking part in the resolution.
Certain Executive Board decisions of particular importance are subject to the approval of the Supervisory Board. These have been decided by the Annual General Meeting and are set out in the Articles of Association of thyssenkrupp AG. Under Article 7 of the Articles of Association, for instance, the Supervisory Board's approval is required for fundamental changes to the Group's organizational structure, the Group's annual investment plan and its financing. Also subject to approval are the acquisition and disposal of equity interests in other companies where the value of an individual transaction exceeds €25 million.
Information on the composition of the Executive Board and the individual Executive Board members is provided here.
Supervisory Board responsible for monitoring the management of the company
The Supervisory Board appoints, monitors and advises the Executive Board and is directly involved in decisions of fundamental importance for the Company. Fundamental decisions require the Supervisory Board's approval.
Pursuant to Article 9 subsection 1 of the Articles of Association, § 96 subsection 1 German Stock Corporation Act (AktG) and § 7 subsection 1 sentence 1 No. 3 German Codetermination Act (MitbestG), the Supervisory Board consists of 20 members, of whom ten are appointed by the shareholders and ten by the employees. Seven shareholder representatives were elected at the Annual General Meeting on January 21, 2010, while three further shareholder representatives were designated by the Alfried Krupp von Bohlen und Halbach Foundation at January 21, 2010, based on the right of designation granted in Article 9 subsection 2 of the Articles of Association. The election of the employee representatives took place on December 09, 2008. After Dr. Schulte-Noelle stood down as shareholder representative with effect from the close of the Annual General Meeting on January 21, 2011, Prof. Dr. Ekkehard D. Schulz was elected shareholder representative at this meeting. Prof. Dr. Schulz was proposed for election to the Supervisory Board by the Alfried Krupp von Bohlen und Halbach Foundation exercising a statutory shareholder right. Under § 100 subsection 2 AktG and section 5.4.4 of the German Corporate Governance Code, shareholders representing at least 25% of the voting rights can apply for the election of a former executive board member directly to the supervisory board without observing a two-year cooling-off period. The current composition of the Supervisory Board is shown here.
The term of office of the employee representatives ends with the close of the Annual General Meeting in 2014 resolving on ratification of the acts of the boards for fiscal year 2012/2013. The term of office of the Supervisory Board members elected by the Annual General Meeting ends with the close of the Annual General Meeting in 2015 resolving on ratification of the acts of the boards for fiscal year 2013/2014; the term of office of the members currently designated by the Alfried Krupp von Bohlen und Halbach Foundation ends at the same time.
To perform its duties the Supervisory Board has set up a total of six committees, which support the work of the full Supervisory Board meetings: an executive committee, a mediation committee pursuant to § 27 subsection 3 Codetermination Act, a personnel committee, an audit committee, a strategy, finance and investment committee, and a nomination committee. The committees prepare the resolutions of the Supervisory Board and the topics to be dealt with in the full Supervisory Board meetings. In addition, the personnel committee resolves in place of the full Supervisory Board on certain matters defined in the rules of procedure that can by law be transferred to the committee for resolution. The Supervisory Board has set up rules of procedure that define the responsibilities of the committees. In addition, the audit committee has its own rules of procedure. Details of the composition of the committees are shown here.
The Supervisory Board regularly evaluates the independence of its members. For this it has defined principles for evaluating independence, based in particular on the German Corporate Governance Code. Applying these principles, the majority of the current Supervisory Board members can be regarded as independent, so independent advice and monitoring of the Executive Board is guaranteed. Also in accordance with the Code, only two Supervisory Board members, Dr. Cromme and Prof. Dr. Schulz, are former members of the Executive Board.
Under § 8 subsection 2 of the Rules of Procedure each Supervisory Board member must disclose conflicts of interest to the Supervisory Board without delay. The Supervisory Board reports to the Annual General Meeting on conflicts of interest that have occurred and their treatment.
Declaration of Conformity in accordance with Art. 161 of the Stock Corporation Act (AktG)
§ 161 of the Stock Corporation Act (AktG) requires the executive board and supervisory board of a listed German stock corporation to declare at least once a year whether the German Corporate Governance Code has been and is being complied with, or which of the Code's recommendations have not been or are not being applied and why not. On the basis of intensive discussions the Executive Board and Supervisory Board issued the following Declaration of Conformity pursuant to § 161 subsection 1 AktG at October 01, 2011:
"thyssenkrupp AG complies with all recommendations of the Government Commission on the German Corporate Governance Code as amended on May 26, 2010, published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette ("Bundesanzeiger"), and complied with all recommendations of the Code in the period from the date of issue of the last Declaration of Conformity on January 21, 2011."
All the suggestions of the German Corporate Governance Code as amended on May 26, 2011 are also followed.
Detailed information on this topic is also available in our Corporate Governance Report and in the Corporate Governance section on this website. The current Declaration of Conformity and the declarations of conformity of previous years are also accessible here.
Key corporate governance practices
Compliance as a key management duty of the Executive Board
Compliance, in the sense of measures to ensure adherence to statutory requirements and internal company policies and observance of these measures by the Group companies, is a key management duty at thyssenkrupp. A compliance program focusing on antitrust law and anti-corruption policies was introduced directly after the merger of predecessor companies Thyssen and Krupp in 1999. It has been regularly reviewed and enhanced ever since. In May 2011, in connection with the strategic development of the Group, the Executive Board of thyssenkrupp AG decided to massively expand the compliance program and increase the number of staff in the compliance unit. The compliance program contains far-reaching measures to ensure adherence to corruption and antitrust regulations and the Group policies based on them.
The Executive Board of thyssenkrupp AG has unequivocally expressed its rejection of antitrust violations and corruption in the thyssenkrupp Compliance Commitment. Antitrust violations and corruption are not tolerated in any way and result in sanctions against the employees concerned. All employees are requested to cooperate actively in their areas of responsibility in implementing the compliance program. The Compliance Commitment is supplemented by various Group policy statements and publications. In these, the underlying statutory requirements are explained in more detail. The key messages of our compliance policies and guidance notes are summarized in a Compliance brochure.
A compliance unit has been set up to develop, manage and implement the program. For example, full-time compliance officers inform employees about the relevant statutory provisions and internal policies in regular training sessions. They are also available to answer individual questions. Around the world, more than 3,500 employees received training on antitrust and anti-corruption law in the reporting period. The classroom courses are supplemented by Groupwide interactive e-learning programs, which have been completed by approximately 26,000 (anticorruption) and 20,000 (antitrust) employees so far. As an additional compliance element, thyssenkrupp has introduced a whistleblower hotline. It is run for us by an external law firm. The whistleblower hotline is available to employees of the Group and also third parties to report possible infringements of laws or policies at Group companies. Here too the focus is on antitrust and anti-corruption compliance. The hotline can be contacted from anywhere in the world and is toll-free.
Further compliance measures relate among other things to capital market law and adherence to the corresponding Group policy. The statutory provisions prohibiting insider dealing are supplemented by an insider policy, which sets out rules for trading in securities of the Company for directors and employees and ensures the requisite transparency. The Group has a long-established clearing office for ad hoc disclosures in which representatives of various departments assess matters that may be subject to ad hoc reporting requirements in order to ensure that potential inside information is handled in compliance with the law. All persons who need access to inside information to perform their work at thyssenkrupp AG are recorded in an insider register.
Code of Conduct for employees
The skills and motivation of our employees are essential to the Group's long-term success. We are therefore committed to providing a positive working environment, a broad range of training and development opportunities, and a performance-based compensation system to allow employees to contribute their skills in the best possible way. thyssenkrupp practices a culture based on respect for all, irrespective of gender, nationality, ethnic background, religion, disability or age. These principles have been part of the corporate culture for decades and were set out in 2007 in "Principles of Social Responsibility in Labor Relations in the thyssenkrupp Group" which apply throughout the Group. More information on the working environment at thyssenkrupp is provided in the Career section on this website.
For thyssenkrupp sustainability means strengthening the future viability of the Company. Sustainability has therefore long been part of our day-to-day practice, firmly anchored in the Group's strategy. Sustainability management performs an important cross-cutting function in the Group, enabling us to utilize business opportunities and minimize risks. To underline its commitment to sustainable development, thyssenkrupp joined the United Nations Global Compact initiative in 2011. To systematically utilize business opportunities and minimize risks, we focus our actions firmly on the sustainability requirements of our customers, continuously improve our response to issues of the future such as climate protection and resource efficiency, and work to enhance the many good examples of sustainable and responsible practices we employ. For more information on sustainability management and topics such as environmental protection and corporate citizenship, go to the Sustainability section on this website.