Pursuant to §§ 289f and 315d of the German Commercial Code (HGB), this corporate governance declaration includes the declaration of conformity pursuant to § 161 of the German Corporation Act (AktG), information on significant corporate governance practices and on the working methods and composition of the Supervisory and Management Boards, including information on the Company's corporate governance, the diversity concept for the Supervisory and Management Boards, and the statutory requirements for equal participation of women and men in management positions.
The Management and Supervisory Boards of Accentro Real Estate AG issued the following declaration in March 2022 pursuant to § 161(1) of the Corporation Act, which was published on the Company's website at investors.accentro.de/en/declaration-of-compliance:
Code Recommendation A.2 (Compliance Management System and Whistle-Blower System)
As of 31 December 2021, the Management Board has not yet set up a compliance management system and has also refrained from setting up a whistle-blower system. Considering the manageable scope of the Company’s structures and business processes as well as its flat hierarchies, there has been little need for a compliance management and whistle-blower system, comparatively speaking. In addition, a proactive risk management system was introduced that is constantly adapted to the requirements and growth of the Company. The system along with the close involvement of the Management Board in the main business transactions and projects as well as in the corporate workflows ensure that emerging risks are continuously monitored. The Company maintains a regular dialogue between employees and the Management Board, and cultivates an internal trust-based corporate culture.
Code Recommendation B.1 (Composition of the Management Board)
The Supervisory Board and the Management Board expressly welcome all efforts to counter gender discrimination as well as any other form of discrimination and to adequately promote diversity. In its recruitments for the Management Board, the Supervisory Board exclusively considers the competence, qualification and experience of eligible candidates, whereas other qualities such as gender or nationality so far have been and continue to be irrelevant for this sort of decision.
Code Recommendation B.2 (Succession Planning)
There is currently no written succession planning document. Management Board and Supervisory Board will always conduct talks about a term extension in good time before a given board member’s contract of employment ends. The Supervisory Board is convinced that, if the talks fail to result in a continuation of the collaboration, it will have sufficient time left to secure the succession without any need for a written concept.
Code Recommendation B.5 (Age Limit for Management Board Members)
No age limit has been defined for members of the Management Board at this time. The Company believes that age should in and of itself not be a knock-out criterion for its board appointments. In the eyes of the Supervisory Board, the Company’s interests are furthered much more by the option to draw on the long-term know-how of individual board members from time to time.
Code Recommendation C.2 (Age Limit for Supervisory Board Members)
In the Supervisory Board’s opinion, an age limit is unnecessary to ensure the effectiveness and success of its work, so that the Company deviated from the recommendation in the past and keep deviating from it in future.
Code Recommendation C.12 (No Board Functions or Advisory Roles for Significant Competitors)
Members of the Supervisory Board should not exercise any board or advisory functions for significant competitors of the company and should not have a personal relationship with a significant competitor. However, the Supervisory Board members Axel Harloff and Carsten Wolff hold executive positions at major competitors. Mr Harloff is Chairman of the Supervisory Board of Consus Real Estate AG, Berlin and Member of the Management Board of ERWE Immobilien AG Frankfurt am Main, Mr Wolff is Member of the Board of Directors as CFO of A.D.O. Group LTD, Tel Aviv, Israel, and Eurohaus Frankfurt AG, Berlin, which are wholly owned and with a 89,9 percent share subsidiaries of ADLER Real Estate AG, Berlin, as well as a member of the Supervisory Board of ERWE Immobilien AG, Frankfurt am Main. In the opinion of the Company, however, no material conflicts of interest will arise as a result.
Code Recommendations D.2, D.3, D.4 and D.5 (Formation of Supervisory Board Committees)
The Supervisory Board has so far refrained from setting up committees, and has specifically refrained from setting up a nomination committee and, as of 31 December 2021, from setting up an audit committee, as it considers three Supervisory Board members a sufficient number to function effectively even in joint representation, nor will it form such committees in future, with the exception of an audit committee, unless they are prescribed by future legislation. Given the size of the Supervisory Board, it would so far seem unreasonable to form committees, which must include at least two people or, for a quorum, at least three people. The members of the audit committee are identical with the members of the Supervisory Board, namely Axel Harloff, Natig Ganiyev and Carsten Wolff. The audit committee is chaired by Carsten Wolff.
Code Recommendation D.12 (Training and Professional Development Measures for the Supervisory Board)
Upon the Supervisory Board’s request, the Company will adequately support the Supervisory Board in its training and professional development measures, and report on measures implemented in the Report by the Supervisory Board.
Code Recommendation D.13 (Self-Assessment of the Supervisory Board)
The entire Supervisory Board will attend the periodic meetings of the Supervisory Board as well as the meetings of the Supervisory Board with the auditors. The Supervisory Board coordinates its activities via in-house meetings and conference calls. The Supervisory Board believes that a further self-assessment is unnecessary for the Company or the Supervisory Board, given the size of the Company and of the Supervisory Board.
Code Recommendation F.2 (Publication of Interim Financial Information during the Course of the Year and Annual Financial Statement incl. Group Management Report)
ACCENTRO Real Estate AG publishes its financial reports (consolidated financial statements incl. group management report and interim reports) in accordance with the stock exchange regulations of the Frankfurt Stock Exchange. That said, the Company as issuer deviates from the recommendations of the German Corporate Governance Code, a circumstance explained by the Company’s current structure of certain internal work processes. The Company will comply with the legal requirements set out for the annual financial report in Art. 115, German Securities Trading Act (WpHG).
Code Recommendation G.1 (Determining the Remuneration for Each Management Board Member)
In accordance with statutory requirements, the Supervisory Board defines a maximum total remuneration for the Management Board. Neither a presentation of how the target remuneration is determined, nor a breakdown for each Management Board member that would include the relative shares of the remuneration components, has been and will be provided. At the time the resolution concerning the remuneration system was adopted, the Supervisory Board was in the process of finalising the long-term incentive (LTI) plan, which kept it from conclusively defining a target remuneration. From the Supervisory Board’s perspective, a breakdown of the remuneration is not necessary.
Code Recommendation G.4 (Vertical Comparison of Proportionality)
The Supervisory Board dutifully reviews the proportionality of the Management Board’s remuneration. In doing so, it takes the Company’s internal wage and salary structure into account. However, the Supervisory Board does not believe that the formal comparison with the entire workforce as suggested in Recommendation G.4 is necessary to ascertain whether the Management Board remuneration is proportionate to the usual remuneration levels within the Company itself. In the opinion of the Supervisory Board, a formal comparison with the Group workforce will not improve the decision-making process.
Code Recommendation G.6 (Variable Remuneration)
The board appointments do not specify a long-term variable remuneration component, and in this sense deviate from the recommendation that the variable remuneration defined by the achievement of targets with long-term orientation should exceed the share defined by targets of short-term orientation. The Supervisory Board believes no such provision is necessary to create an incentive for the work of the Management Board because the latter is sufficiently motivated by the existing variable remuneration plan to act in the long-term interest of the Company. However, it is intended to heed the recommendation whenever new members of the Management Board are to be appointed or existing employment contracts with board members to be renewed.
Code Recommendation G.10 (Granting Shares, Vesting Period)
The holding period of shares acquired upon appointment to the Management Board is linked to the appointment term, so that in the event of a shorter appointment term—as in the case at hand, caused by the respective first-time appointment—the shares vest with board members before the end of a four-year term unless their appointment is renewed.
During the 2021 financial year, the Company granted no variable remuneration component in the form of shares or in share-based forms to the members of the Management Board. It is not planned to grant variable remuneration components in the form of shares or in share-based forms to the Board members under existing contracts of employment because the Supervisory Board does not consider doing so necessary in order to motivate the Management Board to seek a long-term and sustainable development of the Company. However, it is intended to heed the recommendation whenever new members of the Management Board are to be appointed or existing employment contracts with board members are to be renewed.
Agreements regarding a share-based remuneration scheme were concluded between the main shareholder and the members of the Management Board, which are recognised pursuant to IFRS 2 as remuneration costs just like stock options in the Consolidated Financial Statements.
Code Recommendation G.11 (Retaining or Reclaiming a Variable Remuneration)
It has not been intended so far, nor is it intended in the future, to authorise the Supervisory Board to retain or reclaim the full amount of a variable remuneration.
Code Recommendation G.13 (Severance Cap)
There is no express provision to credit a waiting allowance against a severance payment yet to be made. The Supervisory Board believes that such a provision is unnecessary to create an incentive for the work of the Management Board. Whether or not such an allowance will be credited will be decided by the Supervisory Board on a case-to-case basis, so as to satisfy the purposes of severance payment and waiting allowance in each case.
Berlin, 31 March 2022
Management Board and Supervisory Board ACCENTRO Real Estate AG
Good and responsible corporate management and supervision (corporate governance) as well as adherence to laws and internal guidelines (compliance) is an indispensable foundation for successful and sustainable corporate management at Accentro Real Estate AG.
The working methods of the Management Board and Supervisory Board of Accentro Real Estate AG, as a German listed stock corporation, are primarily determined by the Corporation Act and, in addition, by the requirements of the Corporate Governance Code as amended. The Corporate Governance Code ensures transparency regarding the legal framework for corporate management and control and contains generally accepted standards of good, responsible and sustainable corporate management. In addition, the Company's Articles of Association and the Rules of Procedure for the Management and Supervisory Boards contain further requirements for the activities of the two bodies. The basic principle of management is the dual management and control structure, which is characterised by a strict separation of the duties and competences of the Management Board as the executive body and the Supervisory Board as the monitoring body.
Risk management at Accentro Real Estate AG and the Group is an integral part of centralised and decentralised planning, management and control processes, in line with uniform Group standards. Open communication, periodic inventories of risks and the planning and control system create transparency about our risk situation. More details can also be found in the "Risk management" section of the 2021 Annual Report.
The Management Board manages the Company on its own responsibility, is bound by the interests of the Company and committed to increasing the sustainable value of the Company. It develops the corporate strategy and ensures its implementation in close coordination with the Supervisory Board. The Management Board is strictly separated from the Supervisory Board in terms of personnel: No member of the Management Board can be a member of the Supervisory Board at the same time. The Management Board of Accentro Real Estate AG currently consists of one member, Mr Lars Schriewer (CEO), who manages the business of the Company in accordance with the law, the Articles of Association, the Rules of Procedure for the Management Board issued by the Supervisory Board and his Management Board employment agreement. The Management Board reports to the Supervisory Board regularly, promptly and comprehensively on all issues relevant to the Company with regard to planning, business development, the risk situation, risk management and compliance. Among other things, the Rules of Procedure for the Management Board specify in which cases a resolution by the Management Board is required and which transactions and actions require the approval of the Supervisory Board.
The Supervisory Board monitors and advises the Management Board and is directly involved in decisions of fundamental importance to the Company. It appoints and dismisses the members of the Management Board, decides on the remuneration system for the Management Board members and determines their respective total remuneration.
The Supervisory Board exercises its activities in accordance with the provisions of law, the Articles of Association, its Rules of Procedure and its resolutions. The rules of procedure for the Supervisory Board are available on the Company's website at investors.accentro. Pursuant to the Articles of Association, the Supervisory Board consists of three members: Mr Axel Harloff as Chairman of the Supervisory Board, Mr Carsten Wolff and Mr Natig Ganiyev. The members of the Supervisory Board have the same rights and duties; they are not bound by instructions or orders. Resolutions of the Supervisory Board are adopted primarily at Supervisory Board meetings, but also by written ballot or by other means of communication. The Supervisory Board held five meetings in the 2021 financial year. The Supervisory Board commissions the auditor selected by the shareholders in general meeting to audit the annual financial statements and the consolidated financial statements and agrees on the fee with the auditor. The Supervisory Board, with the involvement of the auditor and the audit report prepared by the auditor, deals with the annual financial statements, the consolidated financial statements, the management reports of the AG and the Group, as well as the proposal of the Management Board for the application of retained earnings, and carries out the audits and determinations provided by law. The Chairman of the Supervisory Board coordinates the work of the Board. The Supervisory Board of Accentro Real Estate AG has not formed any committees at present, as all issues are discussed in plenary sessions given the current number of Supervisory Board members.
Any conflict of interest for a Supervisory Board member between his or her activities for Accentro Real Estate AG and those for another company must be disclosed to the Supervisory Board. In the event of material conflicts of interest that are not merely temporary, the Supervisory Board member concerned is obliged to resign from office. In the event of (potential) conflicts of interest, the Supervisory Board reports to the shareholders in general meeting.
Members of the Supervisory Board should not exercise any board or advisory functions for significant competitors of the company and should not have a personal relationship with a significant competitor. However, the Supervisory Board members Axel Harloff and Carsten Wolff hold executive positions at major competitors. Mr Harloff is Chairman of the Supervisory Board of Consus Real Estate AG, Berlin and Member of the Management Board of ERWE Immobilien AG Frankfurt am Main, Mr Wolff is Member of the Board of Directors as CFO of A.D.O. Group LTD, Tel Aviv, Israel, and Eurohaus Frankfurt AG, Berlin, both of which are wholly owned subsidiaries of ADLER Real Estate AG, as well as a member of the Supervisory Board of ERWE Immobilien AG, Frankfurt am Main. In the opinion of the Company, however, no material conflicts of interest will arise as a result.
In this regard, we also refer to the Declaration of Conformity, which is available on the Company's website at investors.accentro.de/en/declaration-of-compliance, and to the current report of the Supervisory Board. Further details on the concrete work of the Supervisory Board may be found in the current Report of the Supervisory Board.
The Management Board coordinates the Company's strategic orientation with the Supervisory Board and discusses the status of strategy implementation with it on a regular basis. In addition, the Management Board regularly informs the Supervisory Board about the course of business and the situation of the Company. Based on this reporting in particular, the Supervisory Board monitors the legality, regularity, expediency and economic efficiency of the management of the Company by the Management Board. The Rules of Procedure for the Management Board drawn up by the Supervisory Board list the types of transactions and actions that require the approval of the Supervisory Board. The important issues discussed and agreed between the Management and Supervisory Boards include business planning, the earnings situation, risk management, corporate financing and corporate structure.
Diversity concept, succession plans and targets for women
As a listed company, Accentro Real Estate AG complies with diversity requirements, in particular those set out in the Corporation Act and the Corporate Governance Code.
In March 2021, the Supervisory Board adopted a diversity concept for the Supervisory Board as recommended in the Code. The concept also includes the targets of the Supervisory Board for its composition and the competence profile of the full Supervisory Board. Accordingly, the Supervisory Board is to be composed in such a way that all its members have the knowledge and skills, as well as sufficient time, required to properly perform their advisory and supervisory functions towards the Accentro Management Board. The Supervisory Board pays particular attention to diverse, mutually complementary profiles, professional and life experiences. In the composition of the Supervisory Board, sufficient diversity should also be ensured so that the Supervisory Board can draw on the broadest possible pool of personalities, experience and specialist knowledge. When preparing nominations for the shareholders in general meeting, consideration is to be given on a case-by-case basis to the extent to which different, mutually complementary expertise, educational backgrounds, international experience, professional and life experience and gender balance will benefit the work of the Supervisory Board. In the opinion of the Supervisory Board, age is not a criterion that can decisively influence the effective and successful work of the Supervisory Board. Accordingly, age is not a criterion for the composition of the Supervisory Board and therefore the Supervisory Board has not set an age limit for its members.]
In recent years, the Supervisory Board has dealt very intensively with the diversity of the Supervisory Board in general and in specific cases and, in the opinion of the Supervisory Board, the principles set out in the concept were also observed in financial year 2021 and are reflected in the current composition of the Supervisory Board.
The Supervisory Board pursues the objective of promoting women and has made it a goal to consider women when appointing members to the Supervisory and Management Boards. Based on the current Supervisory and Management Board mandates, the Supervisory Board has currently set a target for the proportion of women on the Management and Supervisory Boards pursuant to § 111(5) of the Corporation Act of 0% for the period until 31 December 2024. Nevertheless, in compliance with the requirements of the law for the equal participation of men and women on the Supervisory and Management Boards, the Supervisory Board strives for appropriate consideration.
In the opinion of the Supervisory Board, an age limit is not necessary for the effective and successful work of the Supervisory Board. The Supervisory Board will examine, however, to what extent the corresponding recommendation in the Code can be complied with in the future.
Due to the age structure of the Management Board, no age limit has been set and no long-term succession plan has been made for members of the Management Board at this time.
The Supervisory and Management Boards expressly welcome all efforts to counteract gender discrimination and any other form of discrimination and to appropriately promote diversity. When appointing members of the Management Board, the Supervisory Board attaches exclusive importance to the competence, professional qualifications and experience of the persons in question; other characteristics such as gender or national affiliation were and are therefore of no significance for this decision. The Supervisory Board always strives to select the most suitable individuals and, in the opinion of the Supervisory Board, these principles were also observed in financial year 2021.
In accordance with § 76(4), Sentence 1 of the Corporation Act, the Management Board has set a target of 0% for the proportion of women in the two management levels below the Management Board. At Accentro Real Estate AG, there is currently only one management level below the Management Board; one woman is there.
Detailed information on the activities of the Supervisory Board and on the cooperation between the Supervisory and Management Boards can also be found in the chapter "Report of the Supervisory Board" of the Annual Report. Further information on the remuneration of the Management and Supervisory Boards can be found in the "Remuneration" section of the Management Report.
Berlin, March 2022
Accentro Real Estate AG
The Supervisory Board The Management Board