Corporate Governance Report
(Annual Corporate Governance Statement pursuant to Section 289 a of the HGB)
In this Annual Corporate Governance Statement, the company presents the main components of Deutsche Post DHL’s corporate governance structure. These include the Declaration of Conformity from the Board of Management and the Supervisory Board, significant corporate governance practices that exceed legal requirements, the working methods of the Board of Management and the Supervisory Board, and the composition and working methods of the executive and other committees, as well as the targets for the composition of the Supervisory Board.
In December 2013, the Board of Management and the Supervisory Board again submitted an unqualified Declaration of Conformity pursuant to section 161 of the Aktiengesetz (AktG – German Stock Corporation Act), which reads as follows:
“The Board of Management and the Supervisory Board of Deutsche Post AG declare that the recommendations of the Government Commission German Corporate Governance Code in the version dated 15 May 2012 have been complied with since issuance of the Declaration of Conformity in December 2012 and that it is intended to comply with all recommendations of the code in the version dated 13 May 2013 in the future.”
We shall also implement the suggestions made by the code, with one exception: the Annual General Meeting will only be broadcast on the internet up to the end of the address by the Chief Executive Officer.
With the guiding principle of “respect and results”, we set our corporate governance the daily challenge of achieving first-class results whilst adhering to our sense of responsibility for the needs of our employees and customers. We put our knowledge and global presence to good use to make a positive contribution to the environment and society. We concentrate these efforts on environmental protection, disaster management and education. We also support the voluntary work of our employees.
The results of our annual, Group-wide employee opinion survey continue to be very positive. With a participation rate of 77 %, slightly fewer employees took part than in the previous year because we have changed our communication and reporting methods.
The annual survey of private customers carried out by the Kundenmonitor Deutschland independent market study shows that 95 % (previous year: 96 %) of our customers are satisfied with Deutsche Post’s postal services. We achieved excellent results in letter transit times within Germany. According to surveys conducted by the quality research institute Quotas, we exceeded the 80 % legal requirement by a wide margin: 94 % of the letters we received during our daily opening hours or before final post box collections were delivered the next day.
The Group’s Code of Conduct has been applicable in all regions and all divisions since the middle of 2006. In view of changing legal and social requirements, the Group updated the Code of Conduct. The code now places particular emphasis on our respect for human rights, our opposition to all forms of forced and child labour and our respect for basic principles and rights in the working environment, in accordance with national laws and conventions. The corporate responsibility section has also been updated.
Deutsche Post DHL’s Code of Conduct lays down guidelines for day-to-day workplace conduct and is applicable in all regions and divisions. It covers issues ranging from quality, our relationship with our customers and standards on co-operation and integrity in our business practices, to corporate responsibility and the environment. Both the full Code of Conduct and a simplified text version are available to staff in 21 languages. There is also a web-based training course.
The Code of Conduct is underpinned by further guidelines: the anti-corruption policy gives clear instructions on how to handle gifts, benefits and offers of hospitality. The competition compliance policy gives specific guidelines on the prohibition of agreements with competitors. The Code of Conduct for suppliers is included in all procurement contracts and existing long-term framework agreements. It obliges companies that work with us to adhere to ethical and ecological standards. A ban on child and forced labour is in place. Salaries and working times must comply with national laws and regulations.
In mid-2013, Deutsche Post AG’s Board of Management adopted its statement on Diversity & Inclusion. One topic covered by this statement is our strategic approach to women in management positions. Since the end of 2011, we have been implementing a package of measures to increase the proportion of women in management positions on a sustainable basis. We have made a formal commitment to achieving this, introduced a system of key indicators, set up mentoring programmes, provided support for women’s networks and worked continually to improve work-family balance. We have also made a diversity training course available to executives throughout the Group which focuses on this topic. As at 31 December 2013, the proportion of women in managerial positions around the world stood at 19.6 % – up two percentage points compared with 2011, when the “Women in Management Positions” project was started.
The Supervisory Board supports the Group’s diversity strategy, with a particular focus on the objective of increasing the number of women on the Board of Management. It sees the efforts for greater diversity as being part of long-term succession planning, for which the Supervisory Board and Board of Management are jointly responsible. In the opinion of the Supervisory Board, the targeted increase in the number of women in executive positions is necessary to ensure that, overall, more suitable female candidates are available for vacant positions on the Board of Management. The international composition of the Board of Management already strongly reflects the global activity of the company.
We consider the health and safety of our employees to be prerequisites for performance and motivation and a key factor in the company’s continued success. Our Group health and safety strategy is based on the Healthy Workplace model launched by the World Health Organisation. It integrates the four areas of workplace design, corporate culture, improving the health resources available to individuals and supporting the society as a whole. Each year we recognise exemplary initiatives with our Corporate Health Award.
At Deutsche Post DHL, the Chief Compliance Officer is responsible for the compliance management system and reports directly to the Chief Financial Officer. The Chief Compliance Officer is supported by the Global Compliance Office, which establishes compliance management standards on a Group-wide basis and supports the corresponding activities of the divisions. Each of the four operating divisions has a Compliance Officer, who regularly presents a report to the Board of Management member for the respective division. These reports are incorporated into the Chief Compliance Officer’s reports to the Board of Management and to the Finance and Audit Committee of the Supervisory Board.
One of the main functions of compliance management at Deutsche Post DHL is to implement a systematic process which allows for the identification of potential compliance risks, the evaluation of compliance matters relating to business partners, co-ordinated reporting of any breaches of law or guidelines, the management of guidelines and the development and implementation of training and communication on compliance. We made changes to our compliance hotline in 2013. It is available in around 150 countries and assists employees in reporting breaches of law or the Code of Conduct within the company; it also provides a structure for addressing and resolving breaches. The insights gained from breaches that are reported are used to improve the compliance management system on an ongoing basis. In addition, further steps were taken to improve Group-wide communication on compliance matters, in order to remind employees of their relevance and brief them specifically on the Code of Conduct.
As a German listed public limited company, Deutsche Post AG follows a dual management system. The Board of Management is responsible for the management of the company. It is appointed, overseen and advised by the Supervisory Board.
In addition to the board departments of the Chief Executive Officer (CEO), the CFO and the Board Member for Human Resources, the Board of Management also includes the operating board departments of MAIL, EXPRESS, GLOBAL FORWARDING, FREIGHT and SUPPLY CHAIN.
With the consent of the Supervisory Board, the Board of Management has established rules of procedure that lay down objectives for structure, management and co-operation within the Board of Management. Within this framework, each board member manages their department independently and informs the rest of the board on key developments at regular intervals. The Board of Management as a whole decides on matters of particular significance for the company or the Group. In addition to tasks that it is prohibited by law from delegating, these include all decisions that must be presented to the Supervisory Board for approval. The entire Board of Management also decides on matters brought forth by one member of the Board of Management for decision by the Board of Management as a whole.
In making their decisions, the members of the Board of Management may not pursue personal interests or exploit business opportunities due to the company for their own benefit. They are required to disclose any conflicts of interest to the Supervisory Board without delay.
The Supervisory Board advises and oversees the Board of Management and appoints the members of the Board of Management. It has established rules of procedure that include the fundamental principles of its internal structure, a catalogue of Board of Management transactions requiring its approval and rules for the Supervisory Board committees. It meets at least twice every six months in a calendar year, with special meetings held whenever particular developments or measures need to be discussed or decided quickly. In financial year 2013, the Supervisory Board met for five plenary meetings, 16 committee meetings and one closed meeting, as described in the Report of the Supervisory Board.
The Board of Management and the Supervisory Board engage in regular dialogue regarding strategic measures, planning, business development, risk exposure and risk management as well as company compliance. The Board of Management informs the Supervisory Board promptly and fully on all topics of significance.
All Supervisory Board decisions, particularly those concerning transactions that require its approval, are deliberated and discussed extensively in the relevant committees. At each plenary meeting, the Supervisory Board is informed in detail about the work and decisions of its committees.
In making their decisions, the members of the Supervisory Board may not pursue personal interests or exploit business opportunities due to the company for their own benefit. They are required to disclose any conflicts of interest to the Supervisory Board. Any significant conflicts of interest on the part of a Supervisory Board member that are not merely temporary in nature should lead to that member’s resignation from the Board. All members of the Supervisory Board are independent as defined by the German Corporate Governance Code.
Executive committees prepare the decisions to be made by the Board of Management as a whole and make decisions on matters assigned to them. Their duties include preparing or deciding on investments and transactions in the various divisions. The Deutsche Post Executive Committee is responsible for the MAIL division, the cross-divisional DHL Executive Committee is in charge of the EXPRESS, GLOBAL FORWARDING, FREIGHT and SUPPLY CHAIN divisions, and the CC & GBS Executive Committee covers the Corporate Center (CC) and Global Business Services (GBS). The CEO, the CFO and the Board Member for Human Resources have permanent representation on the committees, while the board members for the divisions are represented on the committees in matters relating to their divisions. Along with the relevant members of the Board of Management, the executive committees also include first-tier executives below the Board of Management level. Depending upon the matter being discussed, other executives also attend the meetings. Procurement and Controlling are called in to consult on capital expenditure, for instance, and Corporate Finance, Corporate Development and Legal Services in the case of acquisitions. The DHL Executive Committee and the Deutsche Post Executive Committee each meet at least once a month; the CC & GBS Executive Committee usually meets every quarter.
Furthermore, business review meetings take place once per quarter. These meetings are part of the strategic performance dialogue between the divisions, the CEO and the CFO. They comprise discussions on strategic measures, operating topics and the budgetary situation of the divisions.
For the members of the Board of Management, see Board of Management and Mandates held by the Board of Management.
The Supervisory Board has formed six committees to ensure the efficient discharge of its duties; in particular, these committees prepare the resolutions of the plenary meetings of the Supervisory Board. Decisions on certain topics are delegated by the Supervisory Board to the individual committees for a final decision.
The Executive Committee’s duties include arranging the appointment of members of the Board of Management and determining the remuneration of the Board of Management at the plenary meeting of the Supervisory Board. The members of the Executive Committee are Wulf von Schimmelmann (Chair), Andrea Kocsis (Deputy Chair), Rolf Bauermeister, Werner Gatzer, Roland Oetker and Stefanie Weckesser.
The Finance and Audit Committee oversees the accounting process, the effectiveness of the internal control system, the risk management and internal auditing systems as well as the financial statement audit. It examines questions of compliance, discusses the half-yearly and quarterly financial reports with the Board of Management before they are published, and prepares plenary meeting resolutions on company acquisitions or disposals that require approval. Based on its own preliminary assessment, it makes proposals for the approval of the annual and consolidated financial statements by the Supervisory Board. The members of the Finance and Audit Committee for 2013 were Hero Brahms (Chair), Stephan Teuscher (Deputy Chair), Werner Gatzer, Thomas Koczelnik, Stefan Schulte and Helga Thiel. Hero Brahms and Stefan Schulte are financial experts as defined by sections 100 (5) and 107 (4) of the AktG. Both have many years’ experience as CFO s of various companies. The chairman of the Finance and Audit Committee, Hero Brahms, has been CFO at a number of companies since 1982, most recently at Linde AG, where he was responsible for balance sheets, taxation, business management, audits, finance and personnel. Between 2001 and 2003 Stefan Schulte was a member of the board responsible for finance at Deutz AG, and between 2003 and 2007 he was the member of the Board of Management responsible for finance at Fraport AG, where he has served as CEO since 2009.
The Personnel Committee discusses human resources principles for the Group. The Personnel Committee’s members are Andrea Kocsis (Chair), Wulf von Schimmelmann (Deputy Chair), Thomas Koczelnik and Roland Oetker.
The Mediation Committee carries out the duties assigned to it pursuant to the Mitbestimmungsgesetz (MitbestG – German Co-determination Act). The members of the Mediation Committee are Wulf von Schimmelmann (Chair), Andrea Kocsis (Deputy Chair), Rolf Bauermeister and Roland Oetker.
The Nomination Committee presents the shareholder representatives of the Supervisory Board with recommendations for potential shareholder members of the Supervisory Board eligible for election at the AGM. In doing so, it takes into consideration the objectives adopted by the Supervisory Board concerning its composition. The members of the Nomination Committee are Wulf von Schimmelmann (Chair), Werner Gatzer and Roland Oetker.
The Strategy Committee was set up in December 2013 and will prepare material for discussion by the Supervisory Board relating to strategic matters and any new activities the company is to undertake, or existing activities that it will discontinue. It will also hold regular discussions on the competition faced by the company. The members of the Strategy Committee are Wulf von Schimmelmann (Chair), Andrea Kocsis (Deputy Chair), Rolf Bauermeister, Henning Kagermann, Thomas Koczelnik and Ulrich Schröder.
Information about the work of the Supervisory Board and its committees in financial year 2013 is also contained in the Report of the Supervisory Board. You can find information about the members of the Supervisory Board and the composition of the Supervisory Board committees under the sections Supervisory Board and Mandates held by the Supervisory Board.
The Supervisory Board set specific targets for its composition in December 2010, adding a further objective relating to the number of independent members of the Supervisory Board in December 2012:
- The candidate proposals of the Supervisory Board to the General Meeting for the election of Supervisory Board members shall be made in the interest of the enterprise only. Within this framework, the Supervisory Board aims to ensure that on the entire Supervisory Board the share of independent members of the Supervisory Board within the meaning of section 5.4.2 of the German Corporate Governance Code shall be at least 75% and the share of female representation in the year 2015 shall be 30%.
- The international activity of the enterprise is already adequately reflected in the composition of the Supervisory Board. The Supervisory Board aims at maintaining this and will therefore, in future proposals to the General Meeting, consider candidates, whose origin, education or professional experience, equip them with special international knowledge and experience.
- Conflicts of interest of Supervisory Board members are an obstacle to independent and efficient counselling and supervision of the Board of Management. The Supervisory Board decides in each case in accordance with the law and in due consideration of the German Corporate Governance Code, how to deal with potential or actual conflicts of interest.
- In accordance with the age limit adopted by the Supervisory Board and laid down in the Rules of Procedure for the Supervisory Board, proposals for the election of Supervisory Board members shall consider the fact that the term of office shall end no later than the close of the Annual General Meeting after the Supervisory Board member reaches the age of 72.
The composition of the Supervisory Board remained unchanged during the reporting period and is in accordance with the above-mentioned targets. As a result of the re-election of all employee representatives by the Delegate Assembly in April 2013 and the re-election of Wulf von Schimmelmann by the AGM in May 2013, the composition of the Supervisory Board did not change. The current composition of the Supervisory Board exceeds the objective relating to the number of independent members. In respect of the other objectives, the Supervisory Board was able to maintain the satisfactory level which had already been achieved. There are six female members of the Supervisory Board, meaning that women currently make up 30 % of its members. The present composition of the Supervisory Board adequately reflects the company’s international operations. Numerous members possess special international knowledge and experience.
The AGM due to take place in May 2014 will duly elect or re-elect four shareholder representatives to the Supervisory Board. The nominations put forward by the Supervisory Board to the AGM takes into account the fact that Hero Brahms, who has rendered a significant contribution to the Supervisory Board over many years, both as a member of the Presidium and as chair of the Finance and Audit Committee, will not be standing for re-election due to the specified upper age limit. In putting forward its nominations, the Supervisory Board has set itself the goal of increasing the proportion of women on the Supervisory Board.