Declaration regarding corporate management
Shareholders and Annual General MeetingOur shareholders exercise their rights at the Annual General Meeting. The Annual General Meeting is held during the first six months of the financial year. The chairperson of the Supervisory Board chairs the Annual General Meeting. The shareholders at the Annual General Meeting decide on all tasks assigned to them, as required by law.
Our goal is to make the shareholders’ participation in the Annual General Meeting as easy as possible. All documentation required for participation is published in advance on the Internet. Proxies may be appointed by shareholders to exercise their voting rights at the Annual General Meeting in accordance with their instructions.
Supervisory BoardKUKA Aktiengesellschaft’s Supervisory Board consists of twelve members as per the Articles of Association, of which six represent the shareholders and six the employees. The Supervisory Board chairperson is elected from the supervisory committee. Mr. Bernd Minning is currently the Chairman of the Supervisory Board. Mr. Michael Leppek is the Deputy Chairman of the Supervisory Board.
The employee representatives were elected to the Supervisory Board on 18 April 2013. The members of the Supervisory Board representing the shareholders were elected by the Annual General Meeting on 5 June 2013.
The term of office of the Supervisory Board members representing the employees and the members representing the shareholders ends upon adjournment of the Annual General Meeting in 2018. The same applies to substitute members and other successors in office of employees and shareholders who subsequently join the Supervisory Board. This is because section 10 para. 4 sentence 1 of the Articles of Association stipulates that where a Supervisory Board member leaves office early, the term of office of the new Supervisory Board member runs only for the remaining term of office of the retiring member.
This specifically relates to one employee representative who was appointed to the Supervisory Board by order of the Augsburg Local Court dated 10 September 2013. It also relates to three members of the Supervisory Board representing the shareholders who were elected by the Annual General Meeting on 10 June 2015.
The Supervisory Board appoints the members of the Executive Board. It supervises and advises the Executive Board regarding the company’s management. Supervisory Board approval is required for key Executive Board decisions. The Supervisory Board meets at least four times per year and also meets without the entire Executive Board or individual Executive Board members as necessary. The Supervisory Board formed six committees from among its members, which prepare and supplement its work. These are:
(i) the mediation committee in accordance with section 27 para. 3 of the German Co-determination Act (MitbestG)
(ii) the personnel committee
(iii) the audit committee
(iv) the nomination committee
(v) the strategy and development committee and
(vi) the technology and production committee
The Supervisory Board adopts the annual financial statements and approves the consolidated financial statements.
Furthermore, pursuant to section 111 para. 5 of the German Stock Corporation Act (AktG), the Supervisory Board has set target figures for the percentage of women on the Supervisory Board and the Executive Board. Against the background of current terms of office and in view of the status quo, the target percentage of women on the Supervisory Board has been set at 8.33 percent, to be reached by 30 June 2017 at the latest. This target has already been met. Given the Executive Board appointments lasting until 2020 and in view of the status quo, the target percentage of women on the Executive Board has been set at 0 percent, to be reached by 30 June 2017 at the latest. This target has already been met.
Executive BoardThe Executive Board is responsible for managing the company. It has two members. The Executive Board reports to the Supervisory Board regularly, in a timely manner and comprehensively regarding all relevant issues related to business development, planning, financing and business performance. KUKA Aktiengesellschaft maintains a Directors & Officers liability insurance (D+O insurance) for all members of the Executive and Supervisory Boards. The deductible for members of the Executive Board amounts to 10 percent of damages or one-and-a-half times their fixed annual remuneration, as per statutory requirements. For Supervisory Board members, the D+O insurance does not contain any deductible.
Furthermore, pursuant to section 76 para. 4 of the Stock Corporation Act, the Executive Board has determined that the target percentage of women for the two management levels below the Executive Board must be reached by 30 June 2017 at the latest (“target date”). The target percentage of women has been set at 15 percent for the first management level below the Executive Board and at 20 percent for the second management level below the Executive Board. As at 31 December 2015, the percentage of women was 13.3 percent at the first management level and 16.7 percent at the second management level. However, as previously mentioned, 30 June 2017 is the key date relevant for reaching the target figures.
Accounting and annual auditSince 2004, the annual financial statements of KUKA Group have been prepared in accordance with the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS) as adopted by the European Union. An independent auditor elected at the Annual General Meeting audits the annual financial statements and the consolidated financial statements. At the recommendation of the Supervisory Board, shareholders at the 2015 Annual General Meeting chose KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as auditor for the annual financial statements and Group auditor for fiscal 2015 as well as for a potential review of the mid-year report for fiscal 2015. The mid-year report for fiscal 2015 was reviewed by the auditor based on the aforementioned resolution.
In accordance with the provisions of the Corporate Governance Code, the Supervisory Board’s Audit Committee reviewed the independence of the auditor, commissioned the auditor to carry out the audit, determined the key audit points and agreed on the fee.
It has been agreed with the independent auditor that the independent auditor will immediately report to the Supervisory Board any material findings or occurrences related to the Supervisory Board’s work that arise in the course of auditing the financial statements. Finally, it has also been agreed with the independent auditor that the independent auditor will inform the Supervisory Board and/or note in the audit report any finding of facts during the performance of the audit, indicating that the declarations issued by the Executive Board and the Supervisory Board with respect to the Code are in any way incorrect. As stipulated in the audit contract, the auditor reviewed the mid-year report as of 30 June 2015.
TransparencyKUKA Aktiengesellschaft assigns a high priority to providing consistent, comprehensive and timely information. KUKA Aktiengesellschaft uses the Annual Report, the financial results press conference, the quarterly reports and the mid-year report to report on business performance and results.
The scheduled dates of key recurring events and publications, such as the Annual General Meeting, the Annual Report and the interim reports, are summarized in a financial calendar. The calendar is published well in advance and is always available on KUKA Aktiengesellschaft’s website.
In addition, the company provides information by way of press releases and ad hoc announcements as required by law. All announcements and press releases can be viewed at
KUKA Aktiengesellschaft has prepared an insider directory as per statutory requirements. The affected individuals have been informed of their legal obligations and potential sanctions.
Declaration of compliance in accordance with section 161 AktG
The declarations of compliance of the Executive Board and the Supervisory Board that have been issued for every financial year since 2002 are available to the public on the company’s website at www.kuka-ag.de.
The identical declarations of the Executive Board (dated 18 January 2016) and the Supervisory Board (dated 8 February 2016) in accordance with section 161 para. 1 sentence 1 of the German Stock Corporation Act (AktG) and the German Corporate Governance Code (GCGC) read as follows:
Since issuing the latest declarations of compliance of the Executive Board (20 January 2015) and of the Supervisory Board (6 February 2015), KUKA Aktiengesellschaft has complied with, and continues to comply with, the recommendations of the Government Commission on the German Corporate Governance Code as on 24 June 2014, which were published in the Bundesanzeiger (German Federal Gazette) dated 30 September 2014, with the exception of the divergences mentioned in these declarations of compliance.
KUKA Aktiengesellschaft complies with the recommendations of the Government Commission on the German Corporate Governance Code of May 5, 2015, as published in the electronic Federal Gazette of June 12, 2015, and will also comply with them in the future subject to the following exceptions:
- KUKA Aktiengesellschaft does not follow the recommendation for the Supervisory Board outlined in section 3.8 para. 3 of the GCGC. The Group’s D + O insurance policy does not provide for a deductible for members of the Supervisory Board. In KUKA Aktiengesellschaft’s view, Supervisory Board members do not require a deductible to ensure that they properly fulfill their monitoring role.
- KUKA Aktiengesellschaft does not at present follow the recommendation for the Executive Board outlined in section 4.2.3 para. 2 sentence 6 of the GCGC. The reason is that the phantom share programs that are still current, and form part of the variable compensation of the Executive Board, are not restricted to certain maximum amounts. In addition to the maximum limits on the fixed remuneration and variable bonus, the employment contracts of the Executive Board members now also stipulate a maximum limit for phantom shares issued from 2015 onwards and payable from 2018 onwards. This is linked to a corresponding cap on the total remuneration. Retroactively capping total compensation (for overall salaries and variable payment components) would constitute a change in the terms of the contract, which cannot be unilaterally implemented by the Supervisory Board. Furthermore, it does not appear appropriate given the expected cooperation based on mutual trust between the Supervisory and Executive Boards (which is in fact expected by the GCGC).
KUKA Aktiengesellschaft adheres to almost all the other suggestions contained in the Code.