Declaration on Corporate Governance 2017
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 and are complied with, or which recommendations for valid reasons were or are not applied. The declaration must be made publicly available on the company 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 disregard, in which case, however, they must annually disclose that they have done so. According to Sect. 161 AktG, departures 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 February 2017 and refers to the requirements of the DCGK in its current version of 07 February 2017.
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 past. The Management Board and the Supervisory Board of YOC AG 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 4.1.3 Sent. 2 and 3 DCGK: YOC AG has instituted appropriate measures aligned to the company’s risk situation, in order to ensure that legal provisions and intragroup regulations are observed. The existing risk management is being reviewed each year in the context of the annual audits, where up until today no objections have been made. The introduction of an additional special Compliance Management System is not deemed necessary by the Management Board and the Supervisory Board due to the positive experiences of the past and the size of the company. For the time being, we abstain from providing a protected reporting system, as from the Management and Supervisory Boards’ perspective, there is no sufficient practical experience with it in Germany. This is why we have opted to wait and see whether the arguments brought forward against a reporting system, such as in particular high costs, possible negative effects on the corporate climate and its susceptibility for misuse, actually play a role in practice and which solutions will become established to prevent these factors. The Management Board and Supervisory Board will continue to observe the practices developing in this field.
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. The YOC AG Management Board consisted of one person in financial year 2017. In agreement with the Supervisory Board and the Management Board, the company for the time being abstains from appointing further members to the Management Board, as management-related duties have been partially delegated to the second 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 Supervisory Board positions are held by men. Membership to the Supervisory Board is first and foremost based on individual suitability for the board.
Item 5.1.2 Para. 2 Sent. 3 DCGK: No age limit for members of the Management Board has been set by the Supervisory Board. The members of the Supervisory Board are convinced that the suitability for company management depends largely on individual capabilities.
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. 3 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 5.4.1 DCGK: In order to implement the German “Law on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector”, which came into force in May 2015, the company’s Supervisory Board has determined target figures for the representation of women on the Supervisory Board and Management Board. Beyond fulfilling this legal requirement, the Supervisory Board has not defined any specific goals for its composition. The Supervisory Board has recommended and will recommend those candidates for election that it has found most suitable for the position to be filled on the Supervisory Board, following careful consideration and taking into account the specific situation of the company. Insofar, the Supervisory Board implicitly has always defined a “skills profile” for the vacancy to be filled on the Supervisory Board and will continue to do so. As a matter of course, in making nominations the Supervisory Board has been and will be led by the selection criteria of the German Corporate Governance Code. A permanent skills profile for the body as a whole, however, does not exist in writing, also with regard to the size of the Supervisory Board.
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 two of the present Supervisory Board members.
Item 7.1.2 Sent. 3 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 2018
The Management Board
The Supervisory Board