Declaration on Corporate Governance 2016
According to Sect.161 AktG, the Management Board and the Supervisory Board of a listed company must annually declare that the recommendations of the “Government Commission on the German Corporate Governance Code” in the official part of the electronic Federal Gazette published by the German Federal Ministry of Justice were or are complied with, or which recommendations for valid reasons were or are not applied. The declaration must be made publicly available on the company’s website.
The German Corporate Governance Code (DCGK) contains provisions, not all of which are equally binding. Aside from descriptions of current company law, it contains recommendations which companies may deviate from, in which case, however, they are obliged to disclose this annually. According to Sect. 161 AktG, deviations from the recommendations of the DCGK must be justified. Furthermore, the DCGK contains suggestions which companies may disregard without disclosing that they have done so. The following declaration concerns the period since the last Declaration of Conformity of March 2015, and refers to the requirements of the DCGK in its current version of 05 May 2015.
The Management Board and the Supervisory Board of YOC AG declare that the recommendations made by the “Government Commission on the German Corporate Governance Code” are and were fundamentally complied with in the present and past. The YOC AG Management Board and Supervisory Board also intend to comply with it in the future. Only the following recommendations of the German Corporate Governance Code were and are not applied:
Item 3.8 Para. 3 DCGK: The company is of the opinion that the motivation and responsibility with which the members of the Supervisory Board carry out their duties will not be improved by an insurance excess. The D&O liability insurance serves to safeguard against the company’s material own risks and at most serves as a second-line defence of the assets of the members of those bodies. The D&O insurance for the Supervisory Board was therefore taken out without an excess.
Item 4.1.5 DCGK: The appropriate representation of women in the two management levels below the Management Board is subject to individual qualification for the respective position. Based on this premise, the Management Board will pay attention to diversity when filling leading positions, and strive to accomplish an appropriate representation of women.
Item 4.2.1 DCGK: According to item 4.2.1 of the DCGK, the Management Board is to consist of several persons and have a chairman or spokesman. During the financial year 2016, the YOC AG Management Board only partially consisted of two persons. Since 01 October 2016, the Management Board has only had one member. In agreement with the Supervisory Board and Management Board, the company for the time being abstains from appointing further members to the Management Board, as manage-ment-related duties have been partially delegated to the se-cond management level.
Item 4.2.2. Para. 2 DCGK: The Supervisory Board is to consider the relationship between the remuneration of the Management Board and that of the senior management and overall staff, also in terms of its development over time. For this comparison, the Supervisory Board determines how senior management and the relevant staff are to be differentiated. Such an explicit differentiation has not taken place, so as not to limit the economic scope for salary negotiations.
Item 5.1.2 Para. 1 Sent. 2 DCGK: Currently, all members of the Supervisory Board are male, so that the requirements for diversity were not met in full. Membership to the Supervisory Board is first and foremost based on individual suitability for the board.
Items 5.3.1, 5.3.2 and 5.3.3 DCGK: As the Supervisory Board of YOC AG has only three members, it would be neither practical nor in accordance with best practice standards to set up committees, particularly an audit committee or nomination committee. The purpose of setting up an audit committee as proposed by the DCGK is to increase the efficiency of auditing. This aim would not be achieved at YOC AG as nearly all members of the plenum would have to sit on the audit committee. Similarly, nearly all plenum members would have to sit on the nomination committee, which would not bring any improvement in the preparation of Supervisory Board recommendations regarding candidates proposed by the shareholders.
Item 5.4.1 Para. 2 DCGK: An appropriate representation of women cannot be specified in advance, as Board membership is determined by individual qualification. No age limit or limit for the length of job tenure has been set for Supervisory Board members. A candidate’s ability to monitor and act as a coequal contact for the Management Board as a member of the Supervisory Board depends mainly on individual capabilities.
Item 5.4.3 Sent. 2 DCGK: According to Item 5.4.3 Sent. 2 DCGK, the next General Meeting is to be set as the deadline for an application for the judicial appointment of a Supervisory Board member. To ensure continuity and efficient and productive work in the Supervisory Board, no deadline was set for the application for the judicial appointment of the present Supervisory Board members.
Item 7.1.2 Sent. 4 DCGK: The company will endeavour to comply with the recommendation that the consolidated financial statements be made available to the public within 90 days after the end of the financial year and the interim reports within 45 days after the end of the reporting period. The company can, however, not always guarantee that it will do so, as this would be possible only with significantly increased personnel and organisational effort, and thus with considerable additional cost. They are hence published within the statutory and stock exchange time limits.
Berlin, February 2017