Summarized Corporate Governance Declarations in accordance with Sec. 315 subsection 5 of the German Commercial Code (HGB) in conjunction with Sec. 289a of the German Commercial Code (HGB)
The management of innogy SE (“innogy”), a listed European company (SE) based in Germany, is primarily determined by the Council Regulation EC No. 2157/2001 of 8 October 2001 on the Statute for a European Company (SE) (“SE-Verordnung”), the Law for the Implementation of SE-Regulation (Gesetz zur Ausführung der SE-Verordnung), the arrangement for the involvement of employees within the innogy SE of 20 December 2016, the German Stock Corporation Act (AktG), the statutes of innogy and the rules set forth in the latest version of the German Corporate Governance Code.
In accordance with Article 38 of the SE-Verordnung in conjunction with Sec. 6 of the statutes of innogy, innogy is subject to what is termed the “dual governance system”, which envisages the strict separation of the Executive Board as managing body and the Supervisory Board as monitoring body. The Executive and Supervisory Boards cooperate closely in the interest of the company.
The Executive Board manages the company, aiming to create lasting added value, for which it assumes responsibility. In this regard, the principle of overall responsibility applies, i.e. the members of the Executive Board share the overall responsibility for managing the company. They develop the corporate strategy and coordinate efforts with the Supervisory Board to ensure that it is implemented. The principles of the innogy Executive Board’s cooperation have been summarised in the Rules of Procedure for the Executive Board. In particular, they establish the responsibilities of the individual Executive Board members, the affairs reserved to the Executive Board as a whole, the passage of resolutions, the required majorities for passing resolutions by name, and the rights and duties of the Chairman of the Executive Board. innogy’s Executive Board currently consists of six members. More detailed information on the Executive Board members and the areas for which they are responsible can be found here.
The Executive Board regularly, promptly and comprehensively informs the Supervisory Board of all issues related to business performance that are material to the innogy Group, major transactions as well as the latest earnings situation along with the company’s risk position and risk management. Deviations in the business trend from preceding forecasts and targets are commented and reasoned in detail. Furthermore, the Executive Board regularly reports on compliance, i.e. actions taken to adhere to statutory regulations and internal company policies, an issue for which the Executive Board is also responsible.
The Supervisory Board advises the Executive Board in managing the company and monitors its activity. It appoints and dismisses the members of the Executive Board, determines the compensation system for Executive Board members, and establishes the total compensation for each of them. It is involved in all decisions that are of fundamental importance to innogy. innogy’s Supervisory Board consists of 20 members, whose terms end with the conclusion of this Annual General Meeting in April 2017. The Supervisory Board Members have been elected by the shareholder; ten of them were elected voluntarily at the suggestion of employees. The principles of the innogy Supervisory Board’s cooperation have been summarised in the Rules of Procedure for the Supervisory Board. Among other things, the Rules of Procedure for the Supervisory Board provides the establishing of committees; currently innogy has five permanent committees: the executive committee, personnel committee, the audit committee, strategy committee and the nominating committee. The committees’ tasks and compositions are set forth in detail in Article 10 et seqq. of the Rules of Procedure for the Supervisory Board. The names of the committee members are provided here. Committee chairmen regularly report to the Supervisory Board on the committees’ work. Further details on the specifics of the work done by the Supervisory Board and its committees are included in the current Supervisory Board Report as from 13 March 2017.
In addition, the Articles of Incorporation of innogy (Art. 10) and the Rules of Procedure for the Supervisory Board (Art. 8) include a list of transactions which are subject to Supervisory Board approval.
innogy believes that responsible and transparent corporate governance is the basis for sustained commercial success. The guiding principles in this regard are set forth in the most up-to-date version of the German Corporate Governance Code, which was first introduced in 2002. Therefore, subsequent to dutiful scrutiny, the Executive and Supervisory Boards of innogy issued the following Statement of Compliance in accordance with Section 161 of the German Stock Corporation Act (AktG) on 16 December 2016:
Since 6 October 2016, the date of first admission of the shares to stock exchange trading, the recommendations of the Government Commission of the German Corporate Governance Code in the version of the Code published on 12 June 2015 by the German Federal Ministry of Justice in the official section of the German Federal Gazette have been fully complied with. They will also be fully complied with in the future.
Further details concerning innogy’s corporate governance practice are provided after 13 March 2017 in the latest Corporate Governance Report.
In its meeting of 16 August 2016, the Supervisory Board of innogy resolved for the first compliance period defined in the German Act on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector (until 30 June 2017) a target quota of women in the Supervisory Board of 30 percent and a target quota of women in the Executive Board of at one-sixth, at least of one woman. For the first and second management level below the Executive Board resolved for the said period of performance a target quota of 13 percent for the first management level and of 10 percent for the second management level; both management levels being defined according to reporting paths. The target quotas do not fall short of the status quo as far as a proportion of women of 30 percent is not reached yet.
innogy is aware of its role in society and the responsibility it shoulders vis-à-vis its customers, business partners, shareholders and employees. The innogy Code of Conduct and its principles, which are closely aligned to those of the United Nations Global Compact, form the foundation for innogy’s responsible and lawful action. The Code is thus the basis for innogy’s entrepreneurial activity and is applicable throughout the innogy Group, without differences in the various countries. innogy uses its groupwide compliance organisation to enforce the innogy Code of Conduct and its policies among its staff and corporate bodies: The Compliance Officer ensures an uniform implementation of groupwide principles from innogy´s Code of Conduct and in particular for prevention of corruption for all operational companies. Outside Germany, normally a bundled competence is established for the subsidiaries in the respective country. The major task of the compliance organization is to sensitize employees and institutions through classroom training and web-based programs as well as through other communication measures for compliance issues and to point out risks. Furthermore, the compliance counseling and the support for processing of compliance infringements takes place. For hints from employees or from external third parties about violations of the Code of Conduct an extern contact person is available.
Essen, February 2017
The Executive Board