Corporate governance
By complying with the stipulations of the German Corporate Governance Code of June 18, 2009, MLP continues to reinforce the confidence of its shareholders, clients, employees and other stakeholders in the management of the company. Responsible management geared towards long-term added value is a high priority for us. The Executive and Supervisory Boards ensure that MLP continues to review and develop corporate governance across the Group.
Management and controlling structure
As the management body of an “Aktiengesellschaft” (public limited company), the Executive Board runs the business and is tied to the interests and business principles of the company within the scope of corporation law. The responsibilities and duties of the Executive Board are laid down in the German Stock Corporation Act (AktG), in MLP AG’s articles of association, as well as in the Executive Board’s rules and procedures and schedule of responsibilities.
The members of the Executive Board together hold responsibility for the entire management. Decisions of the Executive Board are made in Executive Board meetings, which take place regularly and are convened by the Chairman of the Executive Board. Resolutions are drafted as ordinary resolutions with majority votes and recorded accordingly.
The members of the Executive Board are Dr. Uwe Schroeder-Wildberg (Chairman), Mr. Gerhard Frieg, Mr. Ralf Schmid and Mr. Muhyddin Suleiman.
The Supervisory Board advises and monitors the Executive Board. The responsibilities and duties of the Supervisory Board are derived from the German Stock Corporation Act (AktG), MLP AG’s articles of association and a set of rules and procedures for the Supervisory Board.
Resolutions of the Supervisory Board are passed in meetings, which are generally convened by the Chairman of the Supervisory Board. The Supervisory Board convenes for both regular and extraordinary meetings, which are generally attended by all members of the Supervisory Board in person. The Supervisory Board is informed of particularly important or urgent projects outside of the regular meetings. Where necessary, resolutions can also take the form of circular resolutions or be passed via telephone. The resolutions of the Supervisory Board require a majority of votes cast to be passed. In the event of an equal number of votes, the Chairman’s vote is decisive. A transcript of the meetings is drafted.
The Supervisory Board currently consists of six members. These are four shareholder representatives, elected by the Annual General Meeting, and two employees’ representatives, elected by employees. The Supervisory Board is currently made up of Dr. Peter Lütke-Bornefeld, Dr. h. c. Manfred Lautenschläger, Dr. Claus-Michael Dill, Mr. Hans Maret, Mr. Norbert Kohler and Mrs. Maria Bähr.
In the absence of the Executive Board, the Supervisory Board also reviewed the efficiency of its own activities in 2009. Particular attention was paid to the efficiency of the procedures in the Supervisory Board, the information flow between the committees and the Supervisory Board plenary meeting and the timeliness and sufficient content of reporting by the Executive Board to the Supervisory Board. Further measures aimed at increasing efficiency were discussed intensively in target-oriented talks.
The Supervisory Board of MLP AG has set up committees in order to improve the effectiveness of its work. The Personnel Committee prepares the resolutions on HR issues concerning the Executive Board members with the company. The Audit Committee is responsible for auditing the accounting processes, risk management issues and the auditing system itself, as well as ensuring the independence of the auditors, awarding the audit contract to the auditors, determining the focal points of the audits and agreements on fees. The committee also discusses the annual financial statements, the consolidated financial statements and the management reports of MLP AG and the MLP Group and submits a recommendation for resolution to the Supervisory Board. The Supervisory Board has formed a nomination committee which is exclusively composed of shareholder representatives who propose suitable candidates to the Supervisory Board for recommendation to the Annual General Meeting. Dr. Peter Lütke-Bornefeld, Dr. h. c. Manfred Lautenschläger, Dr. Claus-Michael Dill and Mr. Hans Maret are members of the three aforementioned committees.
In 2009, the Executive and Supervisory Boards of MLP AG again dealt intensively with the German Corporate Governance Code and further new legislation significant to the work performed by the Supervisory Board and its committees. The changes to the Code passed on June 18, 2009, and in particular the changes caused by Germany’s Appropriateness of Management Remuneration Act (VorstAG) and Accounting Law Reform Act (BilMoG) enforced in 2009, were a topic of intensive discussion in the Supervisory Board. The changes were analysed and corresponding adjustments made to the internal regulations and procedures followed by the Supervisory Board.
The Supervisory Board considers itself to consist of a suitable number of members who have no business or personal relationship with the company or members of the Executive Board which could form grounds for a conflict of interest. The Supervisory Board examined the knowledge and experience required of the Chairman of the audit committee under the German Corporate Governance Code with regard to reporting and internal control procedures. The Chairman of the MLP AG auditing committee fully complies with the requirements. The recommendations made by the Code with regard to the election of the company’s Supervisory Board were complied with regarding the Supervisory Board election in 2008. More specifically, this means that the Supervisory Board elections took the form of uninominal voting and that the nomination of the Chairman of the Supervisory Board was made known to the shareholders prior to the Annual General Meeting. These requirements are also to be observed for future appointments to the Supervisory Board.
Further disclosures on the Supervisory Board’s activities can be found in the Report by the Supervisory Board on page 6 et seq..
Intensive dialogue between the Executive and Supervisory Boards forms the basis of transparent and responsible company management. The Executive Board of MLP AG provides the Supervisory Board with regular, timely and comprehensive information on the Group’s position, including information on its risk situation, risk management and compliance. The Supervisory Board is informed of particularly important or urgent projects outside of the regular meetings. Furthermore, the Chairman of the Supervisory Board meets with the Executive Board on a regular basis to discuss specific issues. The Chairman of the Supervisory Board informs the other members of the Supervisory Board in detail about the content of his meetings with the Executive Board. The Supervisory Board discussed the Group’s corporate planning and plans for the strategic development with the Executive Board.
Significant legal transactions by the Executive Board require the consent of the Supervisory Board. Internal rules of procedure issued by the Supervisory Board govern the distribution of business, powers of approval and its co-operation with the Executive Board. Further details on the co-operation between Executive Board and Supervisory Board can be found in the report by the Supervisory Board (Page 6 et seq.).