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Declaration on Corporate Governance December 2022

Declaration on corporate governance as per section 315d in conjunction with section 289f of the German Commercial Code (HGB)

Our guiding principle is “You are the customer”. A clear customer focus has taken us to the top. We recognise ourselves in our customers. Our employees are committed to this philosophy. We focus on consumer interests and not on maximum profit. We continuously strive to be better and offer lower prices than the competition. We are also fully aware of our social responsibilities. The actions we take have an effect on people and our environment. We therefore consider sustainability aspects and the related opportunities and risks in the governance and supervision of our company.  

For this reason, corporate governance at Fielmann stands for responsible corporate management and control geared to long-term value creation. Transparent leadership strengthens the trust of customers, employees and investors in the work of the company and its committees. In this context, efficient cooperation between the Management Board and the Supervisory Board, respect for shareholder interests, sustainability, and openness in corporate communications are the principles that guide our actions. 

The Management Board and Supervisory Board have pledged to ensure the continued viability of the company and sustainable value creation through responsible corporate governance over the long term. 

The cooperation between the Management Board and the Supervisory Board is governed by mutual respect and appreciation. A constant exchange of opinions forms the basis for this successful and trusting relationship. With regard to the topics and contents, we refer to the Supervisory Board report for the financial year 2021, which is published in the Annual Report. The Notes to this declaration also contain details on the composition of the Supervisory Board’s committees as well as the name of the Chairman. The Supervisory Board regularly conducts a self-assessment with regard to the effective fulfilment of tasks by the Supervisory Board and its committees. This is done on the basis of a questionnaire drawn up by the Supervisory Board and a joint discussion in the plenary session. 

The Supervisory Board is composed of six women (three of whom are shareholder representatives and three are employee representatives) and ten men (five of whom are shareholder representatives and five are employee representatives). The minimum ratio as per section 96(2) of the German Stock Corporation Act (AktG) of 30% was thus fulfilled in the reporting period. The Supervisory Board members contribute differing yet complementary forms of experience, not least due to the fact that several members work in international companies. Furthermore, the mixed age structure of the members are to the Supervisory Board's benefit. 

According to the shareholder representatives on the Supervisory Board, the appropriate number of independent shareholder representatives is two – also in consideration of the shareholder structure. The shareholder representatives on the Supervisory Board regard all shareholder representatives as being independent of the company, the Management Board and the controlling shareholder. This also applies to Chairman of the Supervisory Board Prof. Binz, as well as to Supervisory Board members Mr Frey, Mr Oltersdorf, Ms Ostermann and Mr Righi, despite their having been members of the Supervisory Board for over 12 years. This length of time is just one of several indicators set out in recommendation C.7 of the German Corporate Governance Code (GCGC), which in and of itself does not limit the otherwise existing independence of those Supervisory Board members as per the assessment of the shareholder representatives on the Supervisory Board, particularly as they have no personal or business relationship with the company or its Management Board that may cause a substantial – and not merely temporary – conflict of interest. We view the continuity in the composition of the Supervisory Board as an advantage when it comes to putting into context and evaluating specific company interests. The composition of the Supervisory Board therefore supports the company’s long-term strategy. 

The Audit Committee meets the statutory provisions of sections 107(4) sentence 3, 100(5) of the AktG. Both the Chairman of the Audit Committee, Mr Oltersdorf, and the Chairman of the Supervisory Board, Prof. Binz, who is also a member of the Audit Committee, both have expertise, knowledge and experience in the field of accounting, including in the application of accounting principles and internal control and risk management systems, as well as in the field of auditing. Mr Oltersdorf has decades of accounting experience with national and international Group companies, not least from having been responsible for many years for the finances and as CFO of Fielmann Aktiengesellschaft, meaning that he is and has been continuously involved with auditing issues. Prof. Binz has worked as a business lawyer for many years, studied law and business administration at various universities in Germany and abroad, and completed his PhD at the University of Cologne. In his professional career, Prof. Binz has advised a wide variety of large family-run businesses and their shareholders, has worked in many different supervisory bodies on their behalf and, as such, has been continuously involved with accounting and auditing issues. 

When appointing Management Board members, the Supervisory Board always makes its decisions based on the best qualifications and suitability for the benefit of the company. The Supervisory Board does not consider any further-reaching diversity concept to be necessary. The membership rule stipulated in section 76(3a) of the AktG applies to the company, according to which at least one woman and at least one man must be appointed to the Management Board as of 1 August 2022. This numerical stipulation was met in the reporting period, with three male members of the Management Board and one female member thereof. No new appointments or reappointments of a member of the Management Board were due during this period.

The remuneration systems for the members of the Management Board and Supervisory Board were approved by the 2021 Annual General Meeting, and a resolution confirming the remuneration of the Supervisory Board members was also passed. The current remuneration system for the Management Board members as per section 87a(1) and (2) sentence 1 of the AktG and the most recent resolution on the Supervisory Board members’ remuneration as per section 113(3) of the AktG are publicly available on the website https://fielmann-group.com, as is the Remuneration Report for the last financial year after its approval by the Annual General Meeting along with the auditor’s report as per section 162 of the AktG. 

Fielmann is a modern company. The percentage of women working for us in Germany is over 70%, while the proportion of women in the top three management levels below the Management Board stands at over 30%. The proportion of women in the top two management levels below the Management Board, stipulated as per section 76(4) of the AktG and to be attained by 30 June 2022, of 21% was exceeded in the reporting period with a figure of 23%. We will aim to increase this figure in the future. Against this background, the target figure for the proportion of women in the top two management levels below the Management Board stipulated as per section 76(4) of the AktG and to be achieved by 30 June 2027 is 30%. We want to retain our competent and committed female managers over the long term and, where possible, develop further high-performing female managers internally as well as recruit more externally. We shall always do so in consideration of their individual abilities and in compliance with applicable legal stipulations. 

The principles of customer focus ensure the long-term success of the company. Customer focus is also reflected in the company’s organisation. This applies to the Compliance Management System too.

Fielmann respects law and order, both nationally and internationally. We expect the same of our employees and our business partners. Individual wrongdoing can cause enormous economic damage. However, the reputational damage that may result from breaking the law is just as serious. The mutual trust and shared responsibility of all our employees, the protection of nature and natural resources, and our business conduct define our company and assure our success. 

The Fielmann Group’s Compliance Management System is based on many different interconnected measures. The duty of each and every member of the Management Board is to organise and monitor the business activities for which they are responsible in such a way that these activities comply with the applicable laws. The development of the Compliance Management System and its active ongoing development is coordinated by the Management Board member responsible for compliance with the active support of the other Management Board members. 

Due to the large number of statutory provisions applicable to our business, the Management Board has identified the main risk areas in which rules of conduct are essential and serve as a guide for our employees. ln these risk areas, we have established binding guidelines for all employees of Fielmann Aktiengesellschaft and its subsidiaries which must be complied with in addition to the statutory provisions. These guidelines provide concrete guidance for the employees in their work and ensure individual compliance. We will continuously update and amend these guidelines. If the Management Board identifies new risk areas, we will adopt new guidelines and make them available to our employees. 

The Compliance Management System and Risk Management System are regularly checked by the internal audit team. The internal audit team chooses the main topics independently by way of a risk assessment. A report is then submitted to the Management and Supervisory Boards. The auditor considers the adequacy and effectiveness of the systems as part of the year-end audit.

Fielmann takes responsibility for its products, its employees, its customers and for the society we live in. Investing in society means investing in the future. Fielmann plants a tree for each employee every year and has so far planted more than 1.6 million trees and shrubs. We also finance long-term monitoring programs in organic farming, environmental protection, and medicine. Fielmann is committed to the preservation of historical monuments, and funds teaching and research. 

Accordingly, the Management Board and Supervisory Board of Fielmann Aktiengesellschaft declare in line with section 161 of the AktG:

 

Declaration of compliance with the German Corporate Governance Code


In the financial year under review, Fielmann Aktiengesellschaft complied with the recommendations of the Government Commission on the German Corporate Governance Code and shall continue to comply with it in future, provided nothing to the contrary is declared hereafter: 

Once the Whistleblower Protection Act (Hinweisgeberschutzgesetz – HinSchG) comes into force, Fielmann Aktiengesellschaft will introduce a system for reporting and disclosing breaches of the law that complies with the legal requirements. The system will not be introduced prematurely because the exact legal requirements will only be finalised when the new law is passed.

(A.4 GCGC) 

When appointing Management Board members, Fielmann Aktiengesellschaft always makes its decisions based on the best qualifications and suitability for the benefit of the company. If a position on the Management Board has to be filled at any point in the future, Fielmann plans to further increase the proportion of women but will not make this the single most important criterion in selection. 

(B.1 GCGC) 

Succession planning for members of the Supervisory Board shall be done on a case-by-case basis. 

(B.2 GCGC) 

There is no fundamental age limit for members of the Management and Supervisory Boards. We believe that competence and performance should not be determined by rigid age limits.

(B.5/C.2 GCGC) 

The Supervisory Board of Fielmann Aktiengesellschaft is composed of six women and ten men of different ages who bring different yet complementary forms of experience to the Supervisory Board. There are no further targets for the composition of the Supervisory Board, in particular with regard to the formal establishment of a skills profile in the form of a competence matrix for the Supervisory Board as a whole and a fixed limit on the length of membership, which means there is no need to disclose such a matrix in the declaration on corporate governance. Fielmann is a family business. With the support of the Nomination Committee, the Supervisory Board will therefore only propose the most suitable candidates to the Annual General Meeting for election, so that the Board as a whole covers all the areas of expertise important to the company, such as retail, industry expertise, fashion, production, logistics, HR, finances, the capital market, and sustainability – both today and in the future. All members of the Supervisory Board offer their support to the Management Board as competent partners and idea generators by virtue of their professional and business experience, their personal integrity and their loyalty to the company. 

(C.1 GCGC) 

All members of the Supervisory Board have sufficient capacities for fulfilling the obligations of their office. The appropriateness of the number of positions held is evaluated on a case-by-case basis and not by way of a fixed upper limit. The individual workload does not necessarily increase in proportion to the number of positions held.  

(C.4 GCGC) 

In order not to cause any delays during the Annual General Meeting, Fielmann Aktiengesellschaft shall forgo individual elections in future for Supervisory Board elections, unless mandatory statutory provisions dictate another procedure or the matter is settled of its own accord. 

(C.15 GCGC) 

The publication of the Supervisory Board’s rules of procedure on the website is, in the opinion of the Management and Supervisory Boards, not necessary, as these rules pertain to the internal affairs of the Supervisory Board and their publication would not offer significant added value to the shareholders or investors. 

(D.1 GCGC) 

The audited consolidated accounts, the audited annual accounts of Fielmann Aktiengesellschaft, the half-year financial report and the quarterly reports will be published within the statutory deadlines or those set by the stock exchange. 

(F.2 GCGC) 

Pursuant to the legal requirements of the Stock Corporation Act, the remuneration system as a whole must set a long-term behavioural incentive and be geared towards the company’s sustainable and long-term development. Fielmann Aktiengesellschaft’s remuneration system corresponds to these requirements. From the perspective of the Supervisory Board, it does not matter greatly if the long-term variable remuneration components exceed the short-term variable remuneration components.  

(G.6 GCGC) 

The Supervisory Board takes the view that share-based remuneration may create an incentive for improper behaviour. For this reason, Fielmann’s remuneration system makes no provision for share-based remuneration. 

(G.10 GCGC) 

Hamburg, December 2022

For the Management Board
Signed Marc Fielmann, Chairman of the Management Board

For the Supervisory Board 
Signed Prof. Dr. Mark K. Binz, Chairman of the Supervisory Board

 

Aufsichtsrat und Ausschüsse


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