German Corporate Governance Code

3. Cooperation between Management Board and Supervisory Board


3.1

The Management Board and Supervisory Board cooperate closely to the benefit of the enterprise.
3.2 The Management Board coordinates the enterprise's strategic approach with the Supervisory Board and discusses the current state of strategy implementation with the Supervisory Board at regular intervals.
3.3 For transactions of fundamental importance, the Articles of Association or the Supervisory Board - the latter possibly also in individual cases - specify provisions requiring the approval of the Supervisory Board. They include decisions or measures which fundamentally change the asset, financial or earnings situations of the enterprise.
3.4 Informing the Supervisory Board is the responsibility of the Management Board. Nevertheless, the Supervisory Board must itself ensure that it obtains sufficient information. To this end, the Supervisory Board shall specify the Management Board's information and reporting obligations in detail.

The Management Board informs the Supervisory Board regularly, without delay and comprehensively, of all issues important to the enterprise with regard to strategy, planning, business development, risk situation, risk management and compliance. The Management Board points out deviations of the actual business development from previously formulated plans and targets, indicating the reasons therefor.

The Management Board's reports to the Supervisory Board are, as a rule, to be submitted in writing (including electronic form). Documents required for decisions are to be sent to the members of the Supervisory Board, to the extent possible, in due time before the meeting.

3.5 Good corporate governance requires an open discussion between the Management Board and Supervisory Board as well as among the members within the Management Board and the Supervisory Board. For this, the comprehensive observance of confidentiality is of paramount importance.

All Board members ensure that the staff members they appoint to support them comply with the confidentiality obligation accordingly.

3.6 In Supervisory Boards with codetermination, representatives of the shareholders and of the employees can prepare the Supervisory Board meetings separately, possibly with members of the Management Board.

If necessary, the Supervisory Board shall meet without the Management Board.

3.7 In the event of a takeover offer, the Management Board and Supervisory Board of the target company must submit a statement of their reasoned position so that the shareholders can make an informed decision on the offer.

After the announcement of a takeover offer, the Management Board may not take any actions, until publication of the result, that could prevent the success of the offer, unless such actions are permitted under legal regulations. In making their decisions, the Management and Supervisory Boards are bound to the best interests of the shareholders and of the enterprise.

In the case of a takeover offer, the Management Board should convene an extraordinary General Meeting at which shareholders discuss the takeover offer and may decide on corporate actions.

3.8 The members of the Management Board and Supervisory Board comply with the rules of proper corporate management. If they violate the due care and diligence of a prudent and conscientious Managing Director or Supervisory Board member, they are liable to the company for damages. In the case of business decisions an infringement of duty is not present if the member of the Management Board or Supervisory Board could reasonably believe, based on appropriate information, that he/she was acting in the best interest of the company (Business Judgment Rule).

If the company takes out a D&O (directors’ and officers’ liability insurance) policy for the Management Board, a deductible of at least 10 % of the loss up to at least the amount of one and a half times the fixed annual compensation of the Management Board member must be agreed upon.

A similar deductible shall be agreed upon in any D&O policy for the Supervisory Board.

3.9 Extending loans from the enterprise to members of the Management and Supervisory Boards or their relatives requires the approval of the Supervisory Board.
3.10 The Management Board and Supervisory Board shall report each year on Corporate Governance (Corporate Governance Report) and publish this report in connection with the statement on Corporate Governance. Comments should also be provided on the Code’s suggestions. The company shall keep previous declarations of conformity with the Code available for viewing on its website for five years.
  convenience translation