Corporate Governance Code
The "Deutscher Corporate Governance Kodex", the German corporate governance code (the Code), consists of three elements. At first it describes legal regulations for management and supervision of German listed companies (corporate governance), which are mainly referring to the "Aktiengesetz" (German Stock Corporation Act). Further elements are international and national acknowledged standards for good and responsible corporate governance, in the form of recommendations and suggestions. Recommendations are marked in the text by use of the word “shall” and suggestions of the word “should”.
Through the declaration of conformity pursuant to § 161 "Aktiengesetz" (Stock Corporation Act), the code has a legal basis. Accordingly, the recommendations and suggestions are not mandatory. However, deviations from the recommendations – not the suggestions – have to be explained and disclosed with the annual declaration of conformity (Comply or Explain). The recommendations and suggestions of the code become valid with the publication in the official section of the Federal Gazette.
Besides giving recommendations and suggestions that reflect the best practice of corporate governance, the Code aims at enhancing the German corporate governance system’s transparency and comprehensibility, in order to strengthen the confidence of international and national investors, clients, employees and the general public in the management and supervision of German listed companies.
The latest version of the Code is published on this internet page.
Declaration of Conformity
The Board of Management and the Supervisory Board of Brenntag SE are obliged to resolve a Declaration of Conformity in accordance with Article 9 para. 1 lit. c) ii) SE-VO in conjunction with Section 161 of the German Stock Corporate Act (Aktiengesetz).
The Board of Management and the Supervisory Board hereby declare that since their last Declaration of Conformity as of December 14, 2020, Brenntag has complied with the recommendations of the Government Commission “German Corporate Governance Code” as amended on December 16, 2020 (“GCGC 2020”), published by the Federal Ministry of Justice in the official section of the Federal Gazette (Bundesanzeiger), with the exception of the recommendation in number C.4 GCGC 2020. The exception is declared for the following reasons:
With regard to the Supervisory Board’s Chair Doreen Nowotne, there is a deviation from the recommendation in C.4 GCGC 2020. Ms. Nowotne holds positions at two non-group companies, one of which is listed, and one is non-listed. She is also Chair of the Supervisory Board at a further non-group, non-listed company. With her position as Chair of the Supervisory Board of Brenntag SE, her total number of seats amounts to six. Therefore, in accordance with the GCGC’s counting method, a deviation from C.4 GCGC 2020 is hereby declared. In any case, the Supervisory Board has ascertained that Ms. Nowotne has sufficient time available to discharge her duties.
Furthermore, the Board of Management and the Supervisory Board hereby declare that Brenntag complies and plans to continue to comply with the recommendations of GCGC 2020, with the exception of the recommendation in number C.4 GCGC 2020 as described above.
Essen, December 14, 2021
Implementation of the GCGC's suggestions
In addition to the principles and recommendations, the German Corporate Governance Code contains suggestions which are represented in the Code by the term "should". Companies may deviate from the suggestions without disclosure.
In the year 2021, Brenntag generally complies with all suggestions of the version of the Code published on March 20, 2020. The details are set out in the following overview:
|A.2||The Management Board shall institute an appropriate compliance management system reflecting the enterprise's risk situation, and disclose the main features of this system. Employees shall be given the opportunity to report, in a protected manner, suspected breaches of the law within the enterprise; third parties should also be given this opportunity.||Yes|
|A.3||The Supervisory Board Chair should be available – within reasonable limits – to discuss Supervisory Board-related issues with investors.||Yes|
|A.4||The Chair of the General Meeting should be aware that the General Meeting should be completed within four to six hours.||Yes|
|A.5||In the event of a takeover offer, the Management Board should convene an Extraordinary General Meeting at which shareholders will discuss the takeover offer and, if appropriate, decide on corporate actions.||Yes|
|D.8||Participation [in meetings of the Supervisory Board] by telephone or video conference also counts as attendance, but this should not be the rule.||Due to extraordinary constraints in 2021 caused by the COVID 19 pandemic, physical Supervisory Board meetings were only possible to a limited extent. Most of the ordinary meetings of the Supervisory Board were able to be held in physical form during this period. Most of the Supervisory Board meetings in total were held in virtual form in 2021.|
|G.14||Benefit commitments made in connection with the early termination of a Management Board member contract by the Management Board member due to a change of control should not be agreed upon.||Yes|
|G.18||Supervisory Board remuneration should be fixed remuneration. If members of the Supervisory Board are granted performance-related remuneration, it shall be geared to the long-term development of the company.||Yes|
|The information reflects the status at the time of publication of the statutory Declaration of Conformity 2021. The information may change at any time. Brenntag explicitly does not undertake to disclose any changes and/or to update the overview.|