Corporate Governance Statement
As a listed stock corporation under German law, corporate governance at itelligence AG is primarily governed by the German Stock Corporation Act (AktG), the Articles of Association, the Rules of Procedure of the Management Board and the Supervisory Board and the provisions of the current version of the German Corporate Governance Code.
1. Declaration of compliance
In accordance with section 161 AktG, the management and supervisory boards of listed companies are obliged to issue an annual declaration stating whether the recommendations of the Government Commission on the German Corporate Governance Code, as published by the German Federal Ministry of Justice in the official section of the electronic Bundesanzeiger (Federal Gazette), have been and are being complied with and which of the Code’s recommendations have not been or are not being applied.
Declaration by the Management Board and Supervisory Board of itelligence AG on the German Corporate Governance Code in accordance with Section 161 AktG
The Management Board and Supervisory Board of itelligence AG identify with the objectives of the German Corporate Governance Code, namely to promote good, trustworthy company management that is oriented towards benefiting shareholders, employees and customers. The aim of itelligence AG is to achieve a sustainable increase in enterprise value. Accordingly, the aforementioned executive bodies of itelligence AG endorse the recommendations and provisions of the German Corporate Governance Code. itelligence AG acted in accordance with the recommendations of the German Corporate Governance Code throughout the 2010 financial year and will continue to do so in future based on the version of the German Corporate Governance Code last amended on May 26, 2010. itelligence AG departed from the recommendations of the German Corporate Governance Code in some aspects. Details of the individual departures are provided below.
The following recommendations of the German Corporate Governance Code were not implemented:
• Section 3.8: Deductible for D&O insurance
“If the company takes out a D&O (directors’ and officers’ liability insurance) policy for the Management Board, a deductible of at least 10% of the loss up to at least the amount of one and a half times the fixed annual compensation of the Management Board member must be agreed upon. A similar deductible must be agreed upon in any D&O policy for the Supervisory Board.”
The present contracts of the members of the Management Board and Supervisory Board of itelligence AG do not currently provide for such a deductible. However, the introduction of a deductible is being examined.
• Section 5.1.2: Age limit for members of the Management Board
“An age limit for members of the Management Board shall be specified.”
An age limit has not been included in the contracts of members of the Management Board in the past, nor does itelligence AG plan to implement such an age limit in the current or future contracts of members of the Management Board.
Contracts with members of the Management Board are always concluded for a limited term. The age of the respective member of the Management Board will be taken into account to a sufficient extent when determining the term of the contract. This makes the specification of an age limit in the respective contract unnecessary.
• Section 5.3.3: Formation of a nomination committee within the Supervisory Board
“The Supervisory Board shall form a nomination committee composed exclusively of shareholder representatives which proposes suitable candidates to the Supervisory Board for recommendation to the General Meeting.”
itelligence AG has not formed a nomination committee and does not intend to do so in future.
itelligence AG does not consider a nomination committee to be necessary on account of the size of its Supervisory Board.
• Section 5.4.1: Specification of concrete objectives regarding the composition of the Supervisory Board
“The Supervisory Board shall specify concrete objectives regarding its composition which, whilst considering the specifics of the enterprise, take into account the international activities of the enterprise, potential conflicts of interest, an age limit to be specified for the members of the Supervisory Board and diversity. These concrete objectives shall, in particular, stipulate an appropriate degree of female representation. Recommendations by the Supervisory Board to the competent election bodies shall take these objectives into account. The concrete objectives of the Supervisory Board and the status of the implementation shall be published in the Corporate Governance Report.”
From the Company’s perspective, the composition of the Supervisory Board complies with the requirements of the German Corporate Governance Code, particularly with regard to the aspect of diversity. The aforementioned objectives will be formally taken into account in future proposals for election.
• Section 5.4.3: Elections to the Supervisory Board
“Elections to the Supervisory Board shall be made on an individual basis.”
In the past, itelligence AG has made elections to the Supervisory Board on a block basis rather than on an individual basis, and does not intend to change this procedure in future.
Elections on a block basis are standard practice and have proved to be valuable in enabling the rapid completion of the General Meeting.
2. Disclosures on corporate governance practices
itelligence AG is an IT service provider whose success is based on a sustainable relationship of trust with its customers. To safeguard this, itelligence AG has issued the “Guiding Principles”, which define the rules of conduct for its Management Board, managers and employees. These “Guiding Principles” can be viewed on itelligence AG’s website (under Careers / Guiding Principles). They underline the aim of focusing all efforts on customers’ requirements as well as establishing and developing trust-based relationships. Assuming responsibility, team spirit, integrity and professionalism are also defined as key values of itelligence AG and its employees. These values also encompass innovation and lifelong learning. Furthermore, itelligence AG’s “Guiding Principles” place particular emphasis on ensuring that the Company’s managers demonstrate exemplary conduct.
3. Disclosures on the working methods of the Management Board and Supervisory Board
As a stock corporation under German law, itelligence AG has a two-tier management and supervisory structure consisting of the Management Board and the Supervisory Board. The Management Board is responsible for managing the Company. In addition to monitoring the Management Board, the Supervisory Board is responsible for appointing and dismissing members of the Management Board. These two bodies of itelligence AG work together in a trustful and efficient manner.
The Management Board continues to consist of two members: Herbert Vogel (founder and CEO) and Norbert Rotter (CFO). They develop corporate strategy and ensure that it is implemented in consultation with the Supervisory Board. There were no conflicts of interest within the Management Board in the year under review.
The principles on which the Management Board’s working methods are based are laid down in the Rules of Procedure for the Management Board. The Rules of Procedure govern the Management Board’s management of the Company and the allocation of duties between the members of the Management Board. According to these rules, Mr. Vogel is responsible for the business areas of SAP Consulting, Sales, Outsourcing & Services, Investor Relations, Public Relations and Human Resources. As CEO, Mr. Vogel is also responsible for coordinating the business areas and for representing the Company externally. Mr. Rotter is responsible for the business areas of Finance, Accounting, Controlling and Risk Management, IT, M&A, Legal and Purchasing. All other matters are reserved for the Management Board as a whole. The Rules of Procedure also state that certain transactions require the approval of the Supervisory Board. In particular, such matters include transactions exceeding a certain economic magnitude. In addition, the Rules of Procedure contain provisions on the procedure for Management Board meetings and resolutions. Additional information on the two members of the Management Board can be found on our website.
The Supervisory Board of itelligence AG advises and monitors the Management Board in its management of the Company. It is consulted on strategy and planning as well as on all matters of fundamental importance to the Company. The Supervisory Board consists of six members, including four representatives elected by the Annual General Meeting and two employee representatives elected in accordance with the provisions of the Drittelbeteiligungsgesetz (German One-third Employee Participation Act). When nominations are made for the election of the Supervisory Board members, particular emphasis is placed on the knowledge required to perform the relevant tasks as well as on skills and professional experience and ensuring diversity within the composition of the Board. The Supervisory Board is of the opinion that it has a sufficient number of independent members. No conflicts of interest arose within the Supervisory Board during the previous financial year.
The principles on which the Supervisory Board’s working methods are based are laid down in the Rules of Procedure for the Supervisory Board. In particular, these rules govern the duties and working methods of the Supervisory Board in compliance with the requirements of the German Corporate Governance Code, the formation of committees in order to increase efficiency and the procedure for passing resolutions in meetings.
In the year under review, the Management Board regularly, promptly and comprehensively informed the Supervisory Board about all material aspects of planning, business development and the position of the Group by way of written and verbal reports. This also included the risk situation, risk management and compliance issues. Further information on the cooperation between the Management Board and the Supervisory Board as well as the work of the Supervisory Board and its committees can be found in the Report of the Supervisory Board, which can be viewed on our website as part of the Annual Report.
4. Composition and working methods of committees
The six members of the Supervisory Board are listed on our website. The Supervisory Board currently has an Audit Committee, a Personnel Committee and a Strategy Committee which prepare and supplement the work of the Supervisory Board. The duties and powers of the committees are laid down in the Rules of Procedure for the Supervisory Board. The Audit Committee comprises the following members: Fritz Fleischmann (Chairman), Dr. Lutz Mellinger and Dr. Stephan Kremeyer. In particular, the Audit Committee handles issues of accounting, risk management and compliance, the necessary independence required of the auditor, the issuing of the audit mandate to the auditor, the determination of the focal points of the audit and the fee agreement.
The Strategy Committee comprises the following members: Dr. Lutz Mellinger (Chairman), Fritz Fleischmann and Dr. Britta Lenzmann. The Strategy Committee handles the business policy and orientation of the Company. This includes product and service strategy and acquisition matters.
The Personnel Committee comprises the following members: Dr. Lutz Mellinger (Chairman), Fritz Fleischmann and Dr. Britta Lenzmann. The Personnel Committee concerns itself with the staff policy of itelligence AG, particularly matters relating to the composition of the Management Board. This includes the regulation on long-term succession and remuneration issues.
You can find further information on the work of the Supervisory Board and its committees in the Report of the Supervisory Board contained in the Annual Report, which is available on our website.
