Corporate governance report for the financial year 2011/2012
Corporate governance covers the system of managing and monitoring a company, including its organisational structure, its corporate policies and guidelines as well as the internal and external mechanisms of control and monitoring. Nordzucker AG attaches great importance to well-structured, authentic corporate governance as it ensures that the management of the company is carried out in the spirit of long-term value creation. It fosters the confidence of shareholders, financial markets, business partners, staff and the general public in the management and monitoring of the Nordzucker Group.
Corporate governance is the foundation for the decision-making and controlling processes at Nordzucker AG. The activities of Nordzucker AG are carried out in accordance with clearly defined guidelines. These guidelines ensure that the company's actions are systematically aligned with the interests and expectations of shareholders, customers, business partners and staff.
For publicly traded companies the principles of good company management are laid down in the German Corporate Governance Code (hereafter known as the Code). The Code consists of recommendations and suggestions for good company management and also describes statutory obligations for publicly listed companies. Section 161 of the German Stock Corporation Act (AktG) stipulates that publicly traded companies must issue an annual statement on compliance with the Code's recommendations. This declaration relates to both past and future periods. As Nordzucker AG is not listed on a stock exchange it is not legally obligated to issue a statement in accordance with Sec. 161 AktG. The Code is intended for listed companies, but non-listed companies are also well advised to follow its recommendations. Nordzucker AG therefore studies the Code's recommendations closely on a voluntary basis and reports at regular intervals, generally annually, on the company's own corporate governance. This includes making a declaration on the recommendations of the Code, which reflects the contents of the statement of compliance required under Sec. 161 AktG. To the extent that the Code refers to statutory obligations of publicly quoted companies outside the scope of its recommendations, these are not applicable to Nordzucker AG. The company also assumes no voluntary obligation to adhere to them.
The actions of all our staff are aimed at earning an appropriate and sustainable profit, continually generating growth and increasing our market share. Continuous improvement of all business processes by competent, well-managed staff earning performance-related pay secures the existence and the systematic long-term development of the company in an ever-changing competitive environment.
Meeting high standards for food and animal feed quality and safety, conserving resources, continuously minimising and preventing environmental damage as well as safeguarding health and safety at work are an integral part of all Nordzucker's activities. Particular importance is attached to avoiding and preventing errors.
The Executive Board of Nordzucker AG is responsible for determining company policy. It sets corporate strategy, plans and approves company budgets, decides on the allocation of resources and monitors company development. The Executive Board is also responsible for preparing the quarterly and annual financial statements for Nordzucker AG and the consolidated financial statements.
The Supervisory Board of Nordzucker AG has twenty-one members. Two thirds of the Supervisory Board members represent the shareholders and one third represents the workforce. The Supervisory Board monitors the Executive Board and advises it on the management of the company. The Supervisory Board regularly discusses the course of business and company planning as well as corporate strategy and its implementation. It examines and approves the annual financial statements of Nordzucker AG and the consolidated financial statements for the Group, giving due regard to the auditors' report and the results of the examination by the Audit Committee. Major Executive Board decisions are subject to its approval.
In order to reflect recommendation 5.4.1 of the German Corporate Governance Code, the Supervisory Board decided on 10 March 2011 to take the following elements relating to its composition into account:
- at least three Supervisory Board seats for people with a particularly international background (e.g. from having worked abroad or holding foreign citizenship);
- at least three Supervisory Board seats for people who hold no functions at customers, farmers' associations or other business partners;
- at least two Supervisory Board seats for women.
At present these targets have been met.
According to the rules of procedure for the Supervisory Board, an age limit of 65 years applies to proposals for election to the Supervisory Board.
The remuneration of the Executive Board and the Supervisory Board as well as company shares held by members of the Executive and Supervisory Boards are dealt with in the notes to the consolidated statements (Nos. 45.2 and 45.3). Neither members of the Executive Board nor members of the Supervisory Board bought or sold company shares for more than EUR 5,000 in the calendar year.