Henkel Annual Report 2011 - Henkel AG & Co. KGaA Annual Report ...

Henkel Annual Report 2011 Group management report
Corporate governance
29
Corporate governance
at Henkel AG & Co. KGaA
The Management Board, the Shareholders’ Committee
and the Supervisory Board are committed
to ensuring that the management and stewardship
of the corporation are conducted in a responsible
and transparent manner aligned to achieving
a long-term increase in shareholder value. In
keeping with this undertaking, they have pledged
themselves to the following three principles:
• Value creation as the foundation of our
management approach.
• Sustainability achieved through the application
of socially responsible management principles.
• Transparency supported by an active and
open information policy.
I. Corporate governance / Corporate management
report
The German Corporate Governance Code (Kodex)
was introduced in order to promote confidence
in the management and oversight of listed German
corporations. It sets out the regulations and also
the internationally and nationally recognized
standards of responsible corporate management
as applicable to the situation in Germany. The
Kodex, which is aligned to the statutory provisions
applicable to a German joint stock corporation
(“Aktiengesellschaft” [AG]), is applied analogously
by Henkel AG & Co. KGaA. For a better understanding
of the situation at Henkel, this report
describes the principles underlying the management
and control structure of the corporation
together with the special features, distinguishing
us from an AG, that derive from our specific legal
form and our Articles of Association. Also explained
in the following are the main rights granted to shareholders
of Henkel AG & Co. KGaA. The report takes
into account the recommen dations of the Kodex
and contains all the disclosures and explanations
required according to Sections 289 (4), 289a and
315 (4) of the German Commercial Code [HGB].
Legal form / Special statutory features of
Henkel AG & Co. KGaA
Henkel is a “Kommanditgesellschaft auf Aktien”
(KGaA). A KGaA is a company with its own legal
personality (i.e. it is a legal entity) in which at
least one partner assumes unlimited liability in
respect of the company’s creditors (personally
liable partner). The other partners participate in
the capital stock, which is split into shares, and
their liability is limited by these shares; they are
thus not liable for the company’s debts (limited
partners per Section 278 (1) German Stock Corporation
Act [AktG]).
• In terms of its legal structure, a KGaA is a
mixture of a joint stock corporation (AG) and a
limited partnership (KG), with the bias toward
stock corporation law. The differences with
respect to an AG are essentially as follows: The
duties of the executive board of an AG are performed
at Henkel AG & Co. KGaA by Henkel
Management AG – acting through its Management
Board – as the sole Personally Liable
Partner (Sections 278 (2) and 283 AktG in conjunction
with Article 11 of our Articles of Association).
• The rights and duties of the supervisory board
of a KGaA are more limited compared to those
of the supervisory board of an AG. In particular,
the supervisory board is not authorized to
appoint personally liable partners, to preside
over the associated contractual arrangements,
to impose procedural rules on the management
board or to rule on business transactions. A
KGaA is not required to appoint a director of
labor affairs, even if, like Henkel, the company
is bound to abide by Germany’s Codetermination
Act of 1976.
• The general meeting of a KGaA essentially has
the same rights as the shareholders’ meeting
of an AG. In addition, it votes on the adoption
of the annual financial statements of the
corporation; it further formally approves the
actions of the personally liable partner(s). In
the case of Henkel, it also elects and approves
the actions of the members of the Shareholders’
Committee. Resolutions passed in general
meeting require the approval of the personally
liable partner where they involve matters
which, in the case of a partnership, require the
authorization of the personally liable partners
and also that of the limited partners (Section 285
(2) AktG) or relate to the adoption of annual
financial statements (Section 286 (1) AktG).
According to our Articles of Association, in addition
to the Supervisory Board, Henkel also has a
standing Shareholders’ Committee comprising a
minimum of five and a maximum of ten members,
all of whom are elected by the Annual General
Meeting (AGM) (Article 27 of the Articles of Association).
The Shareholders’ Committee is required
in particular to perform the following functions:
• It acts in place of the AGM in guiding the business
activities of the corporation.
• It decides on the appointment and dismissal
of the personally liable partner(s).
www.corporategovernance-code.com