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Corporate Governance

Good Corporate Governance increases the company’s value in the long run. Values like responsibility, reliability and trust are therefore a priority at TAKKT. The Group views transparent dialogues with its interest groups as the foundation of corporate success. TAKKT expressly supports the aims and requirements of the German Corporate Governance Code (DCGK). This underlines the value placed upon responsible corporate management at TAKKT. Management and Supervisory Boards declared their compliance with the latest version of the recommendations made by the German Corporate Governance Code. Only very few exceptions apply. This declaration of compliance is part of the declaration on corporate governance.

Declaration on corporate governance

The actions of the executive and supervisory committees of TAKKT AG are governed by the principles of responsible and good corporate management. In this statement, the Management Board – also on behalf of the Supervisory Board – reports on the corporate governance in accordance with clause 3.10 of the German Corporate Governance Codex and in accordance with Section 289a, paragraph 1 of the German Commercial Code.

TAKKT largely implements corporate governance within the company in accordance with the recommendations and proposals of the German Corporate Governance Code. In the 2017 financial year, the Management Board and Supervisory Board have dealt several times with corporate governance issues and jointly issued the updated 2017 declaration of conformity in accordance with Section 161 of the German Stock Corporation Act (AktG) on December 31, 2017. The declaration of conformity and the declarations of conformity of the last five years are available online at www.takkt.de.

Wording of the declaration of compliance as of December 31, 2017

“The Management and Supervisory Boards of TAKKT AG declare that the recommendations of the Government Commission on the German Corporate Governance Code [Regierungskommission Deutscher Corporate Governance Kodex], published by the Federal Ministry of Justice [Bundesministerium der Justiz] in the official part (“amtlicher Teil”) of the Federal Gazette [Bundesanzeiger], as amended on May 5, 2015, are being complied with. The Management and Supervisory Boards further declare that the recommendations of the Government Commission German Corporate Governance Code [Regierungskommission Deutscher Corporate Governance Kodex], as amended from time to time, have been complied with since the last declaration. The following exceptions apply:

  1. The German Corporate Governance Code recommends under Clause 5.3.2 that the Supervisory Board establish an Audit Committee (“Prüfungsausschuss”). No such Audit Committee has been established at TAKKT AG. As the Supervisory Board of TAKKT AG is comparatively small with six members, the Management and Supervisory Boards still see no need to establish an Audit Committee for the Board.
  2. The German Corporate Governance Code recommends under Clause 5.3.3 that the Supervisory Board establish a Nomination Committee (“Nominierungsausschuss”). No such Nomination Committee has been established at TAKKT AG. As the Supervisory Board of TAKKT AG is comparatively small with six members, the Management and Supervisory Boards also see no need to establish a Nomination Committee for the Board.
  3. The German Corporate Governance Code recommends under Clause 7.1.2 that half-yearly financial reports and any quarterly financial reports be discussed by the Management Board with the Supervisory Board or its Audit Committee prior to publication. At TAKKT AG, the Chairman of the Supervisory Board is continuously informed by the Management Board about the course of business. Moreover, all of the members of the Supervisory Board receive a written monthly report. Therefore, the Supervisory Board does not consider it necessary that the quarterly financial reports be additionally and separately discussed by the plenary Supervisory Board or by an Audit Committee.”

The Management and Supervisory Boards at TAKKT work together in keeping with the motto “together, we can achieve more.” The Management Board steers the company, develops strategies, implements these strategies in the company’s operating business and ensures effective risk management. Important decisions are made by the Management Board in coordination with the Supervisory Board. The Management Board also informs it regularly about important changes in the company, its environment, its strategy and its business development.

It is the duty of the Supervisory Board to oversee and advise the Management Board in its management of the company. It carries out this duty with dedication and thus makes a substantial contribution to the company’s success. It supports the Management Board in fulfilling its responsibilities completely and in good time and is involved in the most important decisions. The Supervisory Board also appoints the auditors in accordance with the resolution passed at the Shareholders’ Meeting. In accordance with the articles of association, the Supervisory Board of TAKKT AG consists of six members. The personnel committee consists of three members and one of its tasks is to prepare issues in connection with the employee contracts of the Board Members. If members of the Supervisory Board intend to have additional contracts of service with the company, its approval is also required. There are currently no such contracts of service. The personnel committee currently consists of Mr. Stephan Gemkow (Chairman), Dr. Johannes Haupt (Deputy Chairman), and Mr. Christian Wendler.

A directors and officers (D&O) insurance policy with the legally stipulated deductibles has been taken out for the Management Board and Supervisory Board members. The remuneration principles of the Supervisory Board are set out in the company’s articles of association, which can be found on the TAKKT website www.takkt.de.

Given the company purpose, its size and the share of international business, the Supervisory Board of TAKKT AG strives to take the various principles into account with regard to its composition as per clause 5.4.1 of the German Corporate Governance Code. First and foremost, the Supervisory Board should select duly qualified, suitable candidates when making nominations. In addition, the Supervisory Board should be assured when making nominations that the respective candidate can devote the expected time required.

Given the current composition of the Supervisory Board, the experience and qualifications of its members, the environment in which TAKKT AG operates and the existing rules of procedure for the Supervisory Board, TAKKT believes that it fulfills the requirements of the German Corporate Governance Code. The Supervisory Board will continue to take account of the above-mentioned goals and the principles associated with it in the future. The existing target for the Management Board (the status quo) was also reviewed in the Supervisory Board’s December meeting. The Supervisory Board also continues to deem this target appropriate. Both targets were codified again until December 31, 2021.

As of December 31, 2017, there is not yet any female representation at the relevant management levels of TAKKT AG below the Management Board. This corresponds to the target quota set for 2017. The goal is to have at least ten percent of the positions of these management levels filled with female executives by June 30, 2022. TAKKT wants to go beyond the minimum requirements at the TAKKT AG level. The Management Board therefore approved additional targets for the KAISER+KRAFT Group, the largest division. For the specific targets at KAISER+KRAFT Group and additional details on the promotion of women at TAKKT, we refer to the 2017 Annual Report (“Sustainability and Employees” section).

Pursuant to clause 5.4.1 of the DCGK, a regular limit of three terms is defined for the length of membership on the Supervisory Board. In compliance with 5.4.2 of the DCGK, the Supervisory Board should also have at least two independent members.

The current composition of the Supervisory Board and the Management Board can be found at www.takkt.de.

TAKKT’s internal management structures are characterized by clear organization and direct reporting lines. The company also operates a value-based remuneration and incentive system. Detailed information on the remuneration of the Management Board at TAKKT can be found in the remuneration report of the annual report.

Risk Management
Taking a responsible approach to business-related risks is a fundamental principle of good corporate governance. The Management Board and Management of TAKKT AG make use of reporting and control systems throughout the Group to record, assess and manage risks. The systems are continuously enhanced, adapted to changes in underlying conditions and checked by the Group auditor. The Management Board regularly informs the Supervisory Board about significant risks and their development.

Details on risk management as well as the accounting-related internal control system are described in depth in the risk and opportunities report of the annual report.

Internal Control System
The internal control system at TAKKT includes aspects related to financial accounting as well as operational procedures. The TAKKT Management Board and Supervisory Board are committed to the establishment, control and monitoring of the internal control system. At TAKKT, the internal control system is documented in a systematic and understandable structure. It is checked for effectiveness on a regular basis. The results of these checks are documented. Measures for eliminating control weaknesses are implemented in a reproducible manner.

Internal Audit
The internal audit department acts on behalf of and reports to the Management Board of TAKKT AG. As an independent and objective auditing and advisory body, its role is to support the Management Board in its management and control functions. The task of the internal auditing department is to review the correctness, effectiveness and economic feasibility of the risk management and internal control systems of all significant business processes. By performing these audit activities, internal auditing creates transparency, identifies risks and where there is room for improvement, develops solution recommendations and contributes to the success of the TAKKT Group. The Management Board of TAKKT reports to the Supervisory Board of TAKKT once a year on the audit system, audit plan and auditing activities and has the audit plan approved for the following year.

Transparency
Ever since its foundation, TAKKT AG has attached great importance to open communication with shareholders and all interested parties. Shareholders can direct questions and suggestions to the Management and Supervisory Boards at any time. The website www.takkt.de provides comprehensive information in both English and German. In addition to the company’s key figures and information about the TAKKT share, the website contains financial reports, press releases, ad-hoc announcements, the financial calendar and more.

Financial calendar
The scheduled dates of key recurring events and publications, such as the Shareholders’ Meeting, the annual report and interim financial reports, are compiled in a financial calendar. The calendar is published well in advance and is available on the TAKKT AG website.

Obligations to inform
TAKKT meets its statutory obligations to inform and publishes the appropriate information on its homepage where this is required.

Corporate compliance
TAKKT AG attaches the highest priority to its compliance with all statutory and contractual obligations associated with responsible corporate governance. The Management Board also takes care to ensure that internal corporate guidelines are adhered to. Compliance with external and internal regulations is also regularly monitored by external auditors and the internal audit department on behalf of the Management Board.

Sustainability
TAKKT understands sustainability as an integral part of good corporate management.

TAKKT considers sustainability from an economic, ecological and social perspective and derives six focus areas from this approach. Along the value chain at TAKKT, these are sourcing, marketing, logistics, resources & climate, employees and society.

The sustainability strategy and several of TAKKT’s initiatives are published in a comprehensive sustainability report, which was prepared in accordance with the accepted standards of the Global Reporting Initiative (GRI) for the first time in 2012. The current version is available on the company website at www.takkt.de.

 

Diversity concept of the Supervisory Board of TAKKT AG
TAKKT AG pursues various goals in the composition of the Supervisory Board. Along with the statutory regulations and provisions of the German Corporate Governance Code in its currently valid version, certain aspects should be specified here regarding the diversity of the Supervisory Board and the objective of its composition. They involve the following individual aspects:

  • Age
    In order to fulfill the provisions of the German Corporate Governance Code, an age limit as well as a term limit are established for membership in the Supervisory Board.

  • Gender
    In accordance with the requirements of the law on equal opportunities for women and men in management positions, the Supervisory Board set a target of one woman in the case of six members for the share of women on the Supervisory Board in the 2015 financial year. This target has been met in all the financial years following its establishment. The Supervisory Board will continue to adhere to this minimum standard in the future and therefore has extended the achieved target until December 31, 2021.

  • Educational or professional background
    In order to optimally fulfill its oversight and control functions in accordance with the provisions of the German Stock Corporation Act and the German Corporate Governance Code, the Supervisory Board of TAKKT AG sets itself the goal of meeting certain overall key competencies and qualifications. Therefore, in the 2017 financial year, the Supervisory Board developed a competency profile that takes various aspects into account. This competency profile should serve as a guideline in making appointments to fill vacancies in the Supervisory Board. This will ensure that various educational and professional backgrounds are taken into account in the Supervisory Board and diversity is assured to the appropriate extent.

Diversity concept of the Management Board of TAKKT AG
The composition of the Management Board of TAKKT AG should ensure the comprehensive fulfillment of tasks incumbent upon the Management Board of a public listed company. The following applies to the aforementioned individual aspects:

  • Age
    Each Board Member should have sufficient seniority in order to effectively meet their responsibilities as a Board Member.

  • Gender
    The Management Board of TAKKT AG wants to continue developing the company together with the employees in a sustainable manner for the long term and lead it through the digital transformation. In the complex process of digital transformation, it is of the utmost importance to ensure continuity at the top management level. Therefore, no change was defined for the composition of the governing body. Therefore, the status quo remains in effect for the Management Board until December 31, 2021.

  • Educational or professional background
    In making appointments to fill vacancies in the Management Board of TAKKT AG, the company always takes care that new candidates possess all of the required knowledge and abilities to fulfill a Management Board mandate. Specific guidelines beyond the stipulations of the German Stock Corporation Act should not be firmly set in this regard in order to be able to respond, if necessary, to developments in the environment in which the company operates as well as economic circumstances and potential other challenges, such as currently those of digitalization.