Management Board & Supervisory Board Declaration of Compliance in accordance with Section 161 German Stock Corporation Act (AktG)
The Management Board and Supervisory Board last issued a Declaration of Compliance in accordance with Section 161 AktG on 17 February 2017. This declaration was based on the version of the German Corporate Governance Code dated 5 May 2015. The currently applicable version of the German Corporate Governance Code is dated 7 February 2017.
The Management Board and Supervisory Board of 4SC AG state, in accordance with Section 161 AktG, that 4SC AG has complied and will continue to comply with the recommendations of the Government Commission “German Corporate Governance Code” based on the 7 February 2017 version, with the exceptions stated below:
D&O insurance for Supervisory Board members (item 3.8 (3) of the Code)
The Company’s current D&O insurance policy for the members of the Management Board contains the deductible required by law. No deductible was stipulated for the insured members of the Supervisory Board because the Management Board and the Supervisory Board agree that all members of the Company’s corporate bodies are required to show responsibility as a matter of course.
Under Section 76 (1) AktG the Management Board is responsible for managing the Company on its own. The tasks of the Supervisory Board are to participate in the strategic direction of the Company and to advise and supervise the Management Board. The influence of the Supervisory Board on operations is therefore limited. This also applies to measures designed to avert losses for the Company. Therefore, going forward there is no intention to stipulate a deductible in the D&O insurance for the members of the Supervisory Board.
Composition of the Management Board of several persons (item 4.2 sentence 1 of the Code)
Since 1 January 2017, the Management Board of the Company is comprised of one person only. The current direction of the Company allows efficient management with one sole member. Furthermore, the Management Board is supported by a senior management team. At this point in time therefore, the appointment of additional members of the Management Board is not necessary from both the Supervisory Board’s and Management Board’s perspectives.
Cap for Management Board remuneration and relevant comparison parameters (item 4.2.3 (2) sentences 6 and 7 of the Code)
The contract of the sole Management Board member specifies caps both for the overall Management Board remuneration stipulated in the contract and for individual bonus provisions.
Based on a resolution of the Company’s general meeting taken on 17 June 2016 stock options were granted to the members of the Management Board. These options can only be exercised in the event of clearly defined, significant share price increases. If the options can be exercised, the beneficiaries of the stock option programs would, however, profit from the shares’ appreciation potential, which theoretically is unlimited. This program is specially tailored to the Company. In the framework of the existing stock option program, the Company thus deliberately does not adopt the cap recommended in the Code and does not refer the stock options to reference parameters (e.g. share indices).
Nomination committee of the Supervisory Board (item 5.3.3 of the Code)
The Supervisory Board has decided against establishing a Nomination Committee. The Supervisory Board of 4SC AG believes that the use of such a Nomination Committee will not render the Supervisory Board’s work more efficient. Hence, this function remains with the plenary Supervisory Board.
Regular limit for membership of the Supervisory Board (item 5.4.1 (2) of the Code)
The Supervisory Board has not specified a regular limit of length of membership for the Supervisory Board. The Supervisory Board does not believe that such a regular limit is appropriate because effective monitoring of the Management Board depends in principle and foremost on the qualification of each individual Supervisory Board member. However, given that the Supervisory Board members’ term of office is limited, experienced, long-serving Supervisory Board members lose neither their independence nor their access to fresh ideas. The Supervisory Board therefore foregoes specifying such a regular limit since it is in the Company’s best interest not to generally restrict selecting suitable candidates or retaining current Supervisory Board members.
Furthermore, since submitting its last Declaration of Compliance dated 17 February 2017, 4SC AG has complied with the recommendations of the German Corporate Governance Code in its version dated 7 February 2017, with the exception of items 3.8 (3) (D&O insurance for Supervisory Board members), 4.2.1 sentence 1 (Composition of the Management Board of several persons), 4.2.3 (3) sentences 6 and 7 (stock option program for the Management Board), 5.5.3 (Nomination Committee of the Supervisory Board) and 5.4.1 (2) (Regular limit for membership of the Supervisory Board). The reasons for these exceptions can be derived from the explanations above.
Planegg-Martinsried, 16 February 2018
Jason Loveridge, Ph.D. – For the Management Board | Clemens Doppler, Ph.D. – For the Supervisory Board
Download Declarations of Compliance
These documents are English translations of the original German documents. The German document is the official and controlling version, and this English translation in no event modifies, interprets or limits the official German version.
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|Declaration of Compliance 2017||download|
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|Declaration of Compliance 2015||download|
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