Declaration on Corporate Governance
In the following statement the Executive Board – also on behalf of the Supervisory Board – reports on the company's corporate governance policies and practices. It therefore complies with Section 289a (1) of the German Commercial Code (HGB) and Section 3.10 of the German Corporate Governance Code.
1. Declaration of compliance pursuant to Section 161 of the German Stock Corporation Act (AktG)
The Executive Board and the Supervisory Board of Wacker Neuson SE consider the German Corporate Governance Code as an important body of regulations. Both executive bodies are committed to complying with its principles aimed at responsible, professional and transparent company management. They have therefore thoroughly examined the recommendations of the German Corporate Governance Code and issued the following declaration of compliance on February 13, 2013.
The above declaration of compliance has been made permanently available to shareholders on the Wacker Neuson SE corporate website (www.corporate.wackerneuson.com) under Investor Relations/Corporate Governance. It is updated as required, at least once a year. Previous declarations of compliance are stored for reference purposes on our website for a period of at least five years. Further details on corporate governance at Wacker Neuson SE are presented in the following corporate governance report.
2. Corporate governance report
The corporate governance report outlines the governance procedures applied by the Executive Board and the Supervisory Board as well as the composition and governance procedures applies by its committees.
Wacker Neuson SE is a European company (Societas Europaea) incorporated under German law. Upon foundation of the company, shareholders chose the dual management system common under the German stock corporation law, comprising two executive bodies, the Executive Board and the Supervisory Board, each vested with different spheres of competence. The two bodies work closely together on a basis of mutual trust and are committed to increasing the company's long-term value.
Executive Board
The Executive Board represents the company vis-à-vis third parties and manages its business in accordance with legal regulations, the Articles of Incorporation and the rules of procedure for the Executive Board. The Executive Board currently has four members; one of these members resigned from his position with effect as of March 31, 2013. It is responsible for managing the company and represents it both legally and otherwise. The Executive Board functions on the basis of joint accountability. In other words, all members of the Board are jointly responsible for all areas of company management.
The Executive Board plans the company's strategic direction in collaboration with the Supervisory Board and ensures it is appropriately executed. It is also responsible for establishing the company and Group's business plans for the coming year and beyond as well as preparing legally required reports such as Annual Financial Statements, Consolidated Financial Statements and interim reports. In addition, the Executive Board also ensures that a suitable risk management and controlling system is in place and that regular, prompt and extensive reports are presented to the Supervisory Board regarding all issues relating to strategy, company planning, business developments, the risk situation, risk management and compliance activities that are relevant to the company and the Group.
Cooperation and areas of responsibilities within the Board are governed by the rules of procedure for the Executive Board. These focus not only on the lines of responsibility vested in individual Executive Board members, but also on the issues entrusted to the Executive Board as a whole, resolutions (quorum requirements in particular) and the rights and obligations of the chairperson of the Executive Board (CEO). Executive Board meetings are held regularly and are convened by the CEO or at the request of an Executive Board member. The Executive Board generally reaches decisions based on a simple majority of votes cast unless other legal provisions apply. If an equal number of votes are cast, the CEO has the casting vote.
The CEO steers and coordinates the entire Executive Board and represents the company and Group vis-à-vis the public, in particular when dealing with the authorities, trade associations and publishing houses.
Mr. Cem Peksaglam is CEO of Wacker Neuson SE, the parent company of the Group. Mr. Martin Lehner is Deputy CEO. Further details on individual members of the Executive Board, in particular their areas of responsibility, are disclosed in the Notes to the Consolidated Financial Statements in section 31 "Executive bodies".
Measures and transactions of fundamental importance must be approved by the Supervisory Board as set down in the rules of procedure for the Executive Board and/or the Articles of Incorporation. They are also communicated to shareholders and the capital market in a timely manner, thus ensuring that decision-making processes remain transparent – also throughout the year – and capital market players are kept sufficiently up to date.
Supervisory Board
The Supervisory Board advises the Executive Board in key decisions, monitors its activities, appoints members and relieves them of their duties. The Supervisory Board has six members. In accordance with the agreement on employee representation in the Wacker Neuson SE Supervisory Board and the German One-Third Participation Act (Drittelbeteiligungsgesetz), four of these are shareholder representatives and two are employee representatives. Taking the prevailing business dynamics into consideration, the composition of the Supervisory Board reflects the company's international footprint, the need to avoid conflicts of interest, the number of independent Supervisory Board members in line with the German Corporate Governance Code, the age limit applicable to Supervisory Board members and the benefits of diversity. The Supervisory Board also plans to propose female members where appropriate in order to ensure that women are adequately represented at Supervisory Board level.
The terms of office of all Supervisory Board members run until the close of the AGM that tables a resolution to formally approve the actions taken by Wacker Neuson SE in fiscal 2014. Their terms may be no longer than six years. Further details on individual members of the Supervisory Board are disclosed in the Notes to the Consolidated Financial Statements in section 31, "Executive bodies".
The principles of cooperation within the Supervisory Board are governed by the rules of procedure for the Supervisory Board. These rules reflect the recommendations of the German Corporate Governance Code and – as an integral part of the monitoring and controlling process – provide for clear and transparent procedures and structures as well as regular efficiency checks on Supervisory Board work. The Supervisory Board reaches decisions based on a simple majority of votes cast unless other legal provisions apply. In the event of a tie, the resolution or nomination proposal shall be deemed rejected; the chairperson shall not have the casting vote. The chairperson of the Supervisory Board convenes and oversees Supervisory Board meetings and generally coordinates the activities of the Supervisory Board and its committees.
The Supervisory Board defines the Executive Board's information and reporting duties in detail. The core areas of collaboration between the Executive and Supervisory Boards as well as specific details on the Supervisory Board's activities and committees are disclosed in the report by the Supervisory Board.
Composition and governance procedures of committeesIn contrast to the Executive Board, the Supervisory Board forms two committees, the Presiding and the Audit Committee.
The responsibilities of the Presiding Committee include in particular submitting proposals for Executive Board member appointments, terminations and mandate extensions, for Executive Board remuneration and remuneration scales, and for preparing measures to conclude, amend or terminate contracts with Executive Board members. The Presiding Committee members are Mr. Hans Neunteufel, Dr. Matthias Bruse and Dr. Eberhard Kollmar. Mr. Hans Neunteufel is Chairman of the Presiding Committee.
The Audit Committee maintains close contact with the auditors. It appoints the auditors to review the Annual and Consolidated Financial Statements, identifies the focal points of the audit and receives the report. Furthermore, the Audit Committee negotiates the fee with the auditor, assesses their independence and additional services provided by the auditor and submits a voting proposal with regard to the auditor to the Supervisory Board for the AGM. It prepares the Supervisory Board discussions and resolutions required to approve the Annual and Consolidated Financial Statements and to review the Executive Board's report on related party disclosures. It supports and monitors the Executive Board regarding accounting process issues, the internal control system, internal auditing system and compliance. The Audit Committee members are Dr. Eberhard Kollmar, Mr. Hans Neunteufel, Mr. Kurt Helletzgruber and Mr. Elvis Schwarzmair. Mr. Helletzgruber is the Chairman. As an independent financial expert, he fulfills the requirements set out in Sections 100 para. 5, and 107 para. 4 of the AktG.
The respective committee chairpersons provide the Supervisory Board with regular and timely information about the committees' activities. The committees also reach decisions with a simple majority of votes cast. In the event of a tie, the resolution or nomination proposal shall be deemed rejected; the respective chairpersons shall not have the casting vote.
Shareholders and the AGM
Shareholders exercise their rights, including voting rights, at the AGM. All shares in Wacker Neuson SE provide shareholders with full voting rights and are registered by name. Each share shall entitle its holder to one vote. The AGM agenda plus the reports and documents required for the AGM are published in good time – also on the company's website, where they can be easily viewed by shareholders.
Our AGM this year will take place in Munich on May 28, 2013. The Executive Board makes it easier for shareholders to exercise their voting rights at the AGM by offering the opportunity to delegate binding voting instructions to proxies named by the company. Shareholders can also do this during the AGM. Information on how to vote by proxy will also be included in the invitation to the AGM meeting. These named proxies are also available at the AGM to shareholders present at the AGM. It is also possible to delegate voting rights to financial institutions, shareholder associations and other third parties.
Accounting and auditing
The Consolidated Financial Statements of Wacker Neuson SE are prepared in line with the International Financial Reporting Standards (IFRS). The Annual Financial Statements and the Combined Management Report of Wacker Neuson SE and its Group are prepared in accordance with the German Commercial Code (HGB).
The Supervisory Board proposes the election of the auditor at the AGM, based on a recommendation from the Audit Committee. Prior to making its proposal, the Supervisory Board obtains a certificate of independence from the auditor in question.
The Chairman of the Audit Committee asked the auditor to immediately report all significant findings or incidents identified during the audit and relating in the broadest sense to Supervisory Board duties if these findings or incidents could not be directly resolved.
Risk management
Responsible handling of risks facing the Group and the company is, as always, a crucial part of sound corporate governance. The Executive and the Supervisory Board therefore continually monitor the Wacker Neuson Group's risk management and internal control systems along with the accompanying reporting mechanisms.
Specific details on risk management within the Wacker Neuson Group are disclosed in the risk report of the Combined Management Report. This also includes a report on the controlling and risk management systems within accounting.
Transparency
Regular, active dialog with our shareholders and other stakeholders is one of the cornerstones of our corporate governance policy. We provide shareholders, financial analysts, shareholder associations and the media with information about business trends and significant changes within the company promptly, regularly and with the greatest possible transparency. We are fully committed to a policy of active and honest communication.
As stipulated by the German Securities Trading Act (WpHG) and the German Corporate Governance Code, we provide information on our company's business development and financial situation four times a year. This takes the form of one annual report and three quarterly reports. The Supervisory Board or the Audit Committee discusses these reports with the Executive Board prior to their publication. The Executive Board also answers shareholders' questions at the AGM. In addition, we use our Internet platform as a way of keeping our stakeholders up to date. All press and ad-hoc releases, financial reports and our financial calendar detailing important events are permanently available on the Wacker Neuson corporate site under Investor Relations, at corporate.wackerneuson.com. Interested parties can join our distribution list to receive regular updates.
Director's dealings and significant voting interests
In order to ensure compliance with the provisions of WpHG, Wacker Neuson SE publishes reports on directors' dealings pursuant to Section 15a WpHG. We use these reports to provide immediate information about securities transactions with regard to Wacker Neuson shares made by members of the Executive and Supervisory Boards as well as by natural and legal persons closely related to members of these bodies. This information is also disclosed on the company's corporate website (corporate.wackerneuson.com) under Investor Relations/Corporate Governance. Also under Investor Relations/IR News on our corporate website, we immediately publish shareholder news releases regarding the purchase or sale of significant voting rights in line with Section 21 WpHG and the holding of financial and other instruments in line with Sections 25 and 25a WpHG.
Shares owned by the Executive Board and the
Supervisory Board
The total number of Wacker Neuson SE shares held by all members of the Executive Board and Supervisory Board on December 31, 2012 was more than one percent of all shares issued by the company. Directly or indirectly, the Executive Board holds around 1 percent (711,760 shares) and the Supervisory Board around 29.7 percent (20,827,009 shares) of issued shares.
Remuneration report in the corporate governance report
We report on the remuneration system applicable to the Executive Board in our Combined Management Report under section XII "Remuneration framework". The AGM approved a resolution not to publish remuneration details for individual Executive Board members in the interest of their privacy.
The overall remuneration of the Executive Board and the Supervisory Board is disclosed in the above-mentioned section and in the Notes to the Consolidated Financial Statements in section 32 "Related party disclosures".
3. Corporate governance best practices
Compliance – foundation for successful business practices
Moving beyond the guidelines and recommendations of the German Corporate Governance Code, the Wacker Neuson SE Executive Board is committed to conducting its business worldwide in a lawful manner, along socially and ethically responsible lines. Which is why we have developed a Group-wide strategic mission statement that shapes the conduct of each and every individual in the Group – from the Executive Board through management to all Group employees. This mission frames the way we do business for shareholders, customers, the general public and our employees alike.
Our approach is anchored in the values you would expect from a mid-sized family-owned company, geared towards profitable sustainability. Shared values and sustainable leadership principles underlie everything we do. Values such as integrity, openness, honesty, and respect for other people and our surroundings inspire us to succeed, serve our shareholders with dedication, and embrace sustainable business practices. This mission statement captures our commitment to all our stakeholders and can be seen on our website at:
www.corporate.wackerneuson.com/en-mission.php.
To ensure our values remain firmly embedded in every aspect of our corporate structure, we regularly inform our employees of the rules and requirements of responsible conduct. In the interests of our company and the entire workforce, we ensure that any infringements of our conduct code are traced back to the source, which we promptly address. This also includes thorough investigation of any violations of applicable national regulations.
Moving forward, we are committed to sustaining this value-driven approach, which we see as a solid ground for our future success and credibility as a company.
Munich, March 15, 2013
Wacker Neuson SE
Executive Board