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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 financial year 2016, the Management and Supervisory Boards have dealt several times with corporate governance issues and jointly made the updated declaration of compliance 2016 in accordance with Section 161 of the German Stock Corporation Act (Aktiengesetz) on December 31, 2016. The declaration of compliance and the declarations of compliance of the last five years are available on the internet at www.takkt.com.

Wording of the declaration of compliance as of December 31, 2016

“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 05, 2015, are being complied with. The Management and Supervisory Boards further declare that the recommendations of the Government Commission on the 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, with six members, the Supervisory Board of TAKKT AG is comparatively small, 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, with six members, the Supervisory Board of TAKKT AG is comparatively small, 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 of “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, which it also informs regularly about important changes in companies, the business environment, strategy and 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 Prof. Dr. Dres. h.c. Arnold Picot.

A D&O (directors and officers) 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.com.

Given the operating purpose of the company, its size and the share of international business, the Supervisory Board of TAKKT AG strives to take the various principles into account in its make-up 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 to this, the Supervisory Board shall satisfy itself that the respective candidates can devote the expected amount of time required, when making its proposals to the General Meeting concerning the election of new members of the Supervisory Board.

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 was also met in the 2016 financial year. The Supervisory Board reviewed the target achieved for the Supervisory Board in its December meeting and continues to deem it appropriate. Given the current make-up 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, 2016, there is not yet any female representation at the relevant management levels of TAKKT AG below the Management Board. The status quo continues to be the target quota for this until June 30, 2017. The goal until June 30, 2022 is to have at least ten percent of the positions of these management levels filled with female executives. TAKKT wants to go beyond the minimum legal requirements at the TAKKT AG level. The Management Board therefore approved additional targets for BEG, the largest division in the group (without the newly acquired BiGDUG in 2015). For the exact targets set at BEG and additional details on promotion of women at TAKKT, we refer to the Annual Report 2016 (chapter “sustainability and employees”).

In addition to this, a regular limit of three terms is determined for the length of membership on the Supervisory Board in accordance with clause 5.4.1 of the DCGK. In compliance with clause 5.4.2 of the DCGK, the Supervisory Board shall have at least two independent members.

The current composition of the Supervisory and Management Boards can be found at  www.takkt.com.

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 Group-wide reporting and control systems to record, assess and manage these 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 material 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 and checked for effectiveness on a regular basis. The results of these checks are documented and 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, it is to support the Management Board in its management and control functions. The task of internal audit 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.com provides comprehensive information in both German and English. Alongside the company’s key figures and information about the TAKKT share, the website contains financial reports, press releases, ad-hoc news as well as the financial calendar.

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

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. Following the value chain at TAKKT these are sourcing, marketing, logistics, resources and climate, employees and the society.

The sustainability strategy and several of TAKKT’s initiatives are published in a sustainability report which 2012 was for the first time prepared in accordance with the accepted standards of the Global Reporting Initiative (GRI). It can be found on the website at www.takkt.com.