Declaration by the Executive and Supervisory Boards of IVU Traffic Technologies AG pursuant to Section 161 of the Stock Corporation Act (AktG) regarding compliance with the German Corporate Governance Code
The Executive Board and the Supervisory Board herewith declare in accordance with the provisions of Section 161 of the German Company Act that IVU Traffic Technologies AG has complied with and will continue to comply with the specifications and recommendations of the German Corporate Governance Code dated 7 February 2017, with the following exceptions:
(The numbers refer to the corresponding sections of the Corporate Governance Code.)
3.4 Information and reporting duties of the Executive Board
The Supervisory Board has not formally defined the information and reporting duties of the Executive Board, as the Executive Board is already legally obliged to comprehensively inform the Supervisory Board and the Supervisory Board has previously had no reason to object to the information policy of the Executive Board.
3.8 Excess in the event of Director’s and Officers’ liability insurance for the Supervisory Board
At the Annual General Meeting on 29 May 2019, the remuneration of the Supervisory Board was increased from 2019. These increases go along with the expansion of the scope of activities through the enlargement of the Board and the establishment of two committees. Accordingly, the remuneration of the Supervisory Board remains relatively low. The company therefore considers a significant deductible for the Supervisory Board to be unreasonable. Even without a deductible, there is a sufficient basis for the Supervisory Board to act in accordance with its duties.
4.1.3 Compliance management system, whistleblowing system
The Executive Board and Supervisory Board are in agreement that establishing an institutionalised compliance management system is not required based on the size and structure of the company as well as due to the lack of danger and risk potential for compliance-related violations. Such a system would be associated with disproportionately high costs for the company in relation to its usage. The company ensures that by using work and procedural instructions, among other methods, the regulations and standards within the company will be complied with.
According to section 4.1.3(3) of the code, employees should be given the opportunity to securely provide details on legal violations within the company in a suitable manner (establishment of a whistleblowing system). This recommendation is not complied with. The Executive Board and Supervisory Board are of the opinion that compliance within the company is guaranteed even without establishing such a system.
4.2.4 Disclosure of the emoluments of members of the Executive Board
The total compensation for the members of the Executive Board is not individualised in the Notes to the Consolidated Annual Report 2019. The company has not previously individualised the emoluments for its Executive Board members due to a decision taken by the General Meeting on 25 May 2016 in accordance with Section 286 Para. 5 German Commercial Code (HGB).
5.1.2 Age limits for Executive Board members, Diversity
The Supervisory Board will not specify an age limit for the Executive Board members. The company sees no cause to set an upper age limit for the Executive Board because the expertise of experienced Executive Board members should also be available to the company. Exclusion from the Executive Board solely on grounds of age does not seem purposeful.
In the interests of the company, the Supervisory Board pays attention when making appointments to the Executive Board primarily to the greatest possible specialist expertise and only then also takes other criteria into consideration. In view of the international operations of the company, value is attached to key qualifications, linguistic skills, and experience in the sector.
5.3.3 Nomination Committee
The Supervisory Board shall form a Nomination Committee composed exclusively of shareholder representatives which nominates suitable candidates to the Supervisory Board for its proposals to the Annual General Meeting for the election of Supervisory Board members.
The Supervisory Board has decided not to form a Nomination Committee, as the nomination is agreed between the four representatives of the capital side as a whole and therefore a committee is not required.
5.4 Composition of the Supervisory Board and emoluments for its members
The Code recommends in Subsection 5.4.1 that the Supervisory Board should specify objectives which, while considering the specifics of the company, also take into account the international activities of the company, potential conflicts of interests, the number of independent members of the Supervisory Board in accordance with Subsection 5.4.2, an age limit to be specified for members of the Supervisory Board, and diversity. These concrete objectives should, in particular, stipulate an appropriate participation of women.
Except for the targets set in accordance with the “Law for the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector”, the Supervisory Board has not previously specified concrete goals for its composition and after consideration of the specific situation of the company it does not at present envisage doing so. Regarding the composition of the Supervisory Board, in the interests of the company, emphasis is attached mainly to the greatest possible specialist expertise and international experience, and only subsequently are further criteria taken into consideration.
Regarding the composition of the Supervisory Board, the company pays attention to the independence of the members of the Supervisory Board.
The company dispenses further with the specification of an upper age limit for the Supervisory Board, since the expertise of experienced Supervisory Board members should be available to the company and exclusion only on the basis of age does not seem to be purposeful.
The Code further recommends in Subsection 5.4.5 that the company should support the members of the Supervisory Board with necessary training and further education measures as required for their tasks. The company supports the members of the Supervisory Board with necessary training and further education measures within the framework of the statutory reimbursement for expenses. However, since it is unclear which conditions must be met in order for the support to be necessary within the scope of the Code recommendations, an exception is declared in this case as a precaution.
Berlin, 13 February 2020
For the Executive Board
Martin Müller-Elschner (CEO)
For the Supervisory Board
Prof. Dr Herbert Sonntag (Chair)