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

Henkel Annual Report 2011 Group management report
Corporate governance
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staff in the Group. Because of their seniority, it is
particularly incumbent on them to set the right
example for their subordinates, to effectively
communicate the compliance rules and to ensure
that these are obeyed through the implementation
of suitable organizational measures.
The procedures to be adopted in the event of
complaints or suspicion of malpractice also constitute
an important element of the compliance
regime. In addition to our internal reporting
system and complaint registration channels,
employees may also, for the purpose of reporting
serious violations to the CCO, anonymously use
a Compliance Hotline operated by an external
service-provider. The CCO is mandated to initiate
the necessary follow-up procedures.
Our corporate compliance activities are focused
on the fields of safety, health and the environment,
antitrust law and the fight against corruption.
In our Code of Conduct, last revised in 2009, in
the corporate guidelines based upon this, and in
other publications, the Management Board clearly
expresses its rejection of all contraventions of
the principles of compliance, particularly antitrust
violations and corruption. For Henkel, bribery
and anticompetitive agreements are no way to do
business. We do not tolerate such violations of
the law.
A further compliance-relevant area relates to
capital market law. Supplementing the legal provisions,
internal codes of conduct have been put
in place to regulate the treatment of information
that has the potential to affect share prices. The
company has an Ad-hoc Committee comprising
representatives of various departments. In order
to ensure that all insider information is handled
as required by law, this reviews developments
and events for their possible effect on share prices,
determining the need to issue reports to the
capital markets on an ad-hoc basis. There are also
rules that go beyond the legal requirements, governing
the behavior of the members of the Board
of Management, the Supervisory Board and the
Shareholders’ Committee, and also employees of
the corporation who, due to their function or
involvement in projects, have access to insider
information. An insider register is kept, listing
the people involved.
For further information relating to the principles
guiding our corporate stewardship, please go to
our website at www.henkel.com/ir
Application of the German Corporate
Governance Code
Taking into account the special features arising
from our legal form and Articles of Association,
Henkel AG & Co. KGaA complies with the recommendations
(“shall” provisions) of the German
Corporate Governance Code (Kodex), with two
exceptions: (1) The executive contracts concluded
in 2008 with respect to those members of the
Management Board who were appointed in conjunction
with the establishment of Henkel Management
AG as the Personally Liable Partner in
2008 and whose mandate since that time has not
yet been extended for a period of more than two
years, contain no severance pay cap in the event
of premature termination of their tenure as executives
of the corporation without good cause or
reason, i.e. severance payouts may exceed the
formal maximum of two years’ emoluments.
Newly concluded post-2008 executive contracts
and executive contracts extended for a period of
more than two years do contain a severance pay
cap. (2) In order to protect the legitimate interests
and private spheres of the members of the corporate
management bodies who are also members
of the Henkel family, their individual shareholdings
are not disclosed unless required by law.
The Kodex requires disclosure of shareholdings
upward of 1 percent.
Henkel also complies with all the suggestions
(“may/should” provisions) of the Kodex in keeping
with our legal form and the special statutory
features anchored in our Articles of Association.
In accordance with Section 15 a of the Securities
Trading Act [WpHG] (Directors’ Dealings), members
of the Management Board, the Supervisory
Board and the Shareholders’ Committee, and
parties related to same, are obliged to disclose
transactions involving shares in Henkel AG & Co.
KGaA or their derivative financial instruments
where the value of such transactions attains or
exceeds 5,000 euros in a calendar year. In fiscal
2011 Henkel was informed of a total of 23 transactions.
In ten transactions conducted by members
of the Shareholders’ Committee and the Supervisory
Board, or parties related to same, a total
of 16,000 preferred shares were purchased and
431,327 preferred shares were sold. One member
of the Shareholders’ Committee conducted a total
of eight new put and call option transactions
involving a total of 785,717 preferred shares and
505,509 ordinary shares, and in 2010 completed
five put and call option deals involving a total of