Corporate Governance Declaration

Principles of the German Corporate Governance Code

The Government Commission appointed by Justice Minister September 2001 adopted the German Corporate Governance Code on February 26, 2002.

Through the declaration of conformity pursuant to Article 161 of the Stock Corporation Act (AktG) as amended by the Transparency and Disclosure Law, entered into force on July 26, 2002, the Code has a legal basis. The Code is published in its latest version in the official section of the electronic Federal Gazette.

The aim of the German Corporate Governance Code is to make Germany’s corporate governance rules transparent for both national and international investors, thus strengthening confidence in the management of German corporations. The Code addresses all major criticisms – especially from the international community – leveled against German corporate governance, namely

• inadequate focus on shareholder interests
• the two-tier system of executive board and supervisory board
• inadequate transparency of German corporate governance
• inadequate independence of German supervisory boards
• limited independence of financial statement auditors

Each of these five points is addressed in the provisions and stipulations of the Code, also taking into consideration the legal framework. Of course the Code cannot cover every detail of every single issue, instead it provides a framework which the individual companies will have to fill in.

Die Regierungskommission Deutscher Corporate Governance Kodex bleibt auch nach der Bekannmachung des Kodex bestehen. Sie wird die Entwicklung von Corporate Governance in Gesetzgebung und Praxis verfolgen und mindestens einmal jährlich prüfen, ob der Kodex angepasst werden soll.