Corporate Governance

The Executive Board and the Supervisory Board view good, responsible management of the company geared to sustainable development as a prerequisite for the long-term success of the Salzgitter Group. This approach fosters the trust of employees, business partners, shareholders and investors. The management of our company is based on the provisions set out under German stock corporation law and the recommendations laid down in German Corporate Governance Code (www.corporate-governance-code.de).

The Executive Board and the Supervisory Board of Salzgitter AG submitted the following declaration in respect of the recommendations of the German Corporate Governance Code, pursuant to Section 161 of the German Stock Corporation Act, on December 18, 2012. more

Beyond the statutory requirements placed on managing companies and the recommendations of the Code, employees of the company developed a set of corporate guidelines and a corporate mission statement back in 2001 determining ethical standards for the entire Group that were subsequently approved by the Executive Board. The aspirations that the company has defined for itself and its employees are also formulated in these guidelines and mission statement and are available at the company's website at www.salzgitter-ag.de/en/Konzern/Leitbild_5P. As the Salzgitter Group has grown in recent years, in terms of its size as well as its international profile, and, at the same time, new megatrends determine the development of the economy and society, a new corporate mission is currently being defined.

The shareholders principally exercise their rights at general meetings of shareholders. Each shareholder of Salzgitter AG is entitled to participate in the General Meeting of Shareholders, which takes place at least once a year, and to address the Meeting about items on the agenda, to ask pertinent questions and submit relevant motions and to exercise their voting rights. Fundamental decisions affecting the company, such as changes to the Articles of Incorporation, the appropriation of annual profit, the election of shareholder representatives to the Supervisory Board, the raising or lowering of capital, or the selection of the annual independent auditor can only be carried out subject to approval by the General Meeting of Shareholders. The General Meeting of Shareholders also decides on the remuneration of the Supervisory Board. We facilitate the process of shareholders exercising their voting rights without having to personally take part in the General Meeting of Shareholders: they can appoint a proxy of the company and instruct this person on how they wish to exercise their voting rights.

You can find the results of the 2013 General Meeting of Shareholders here. more

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The Executive Board holds regular meetings and telephone conferences for the purpose of discussion and decision-making. At present, it has not formed any standing committees.

The Executive Board deploys the following instruments, among others, in its management and control of the subsidiaries and affiliates:

• rules and regulations on reporting duties and approval requirements in corporate guidelines and the articles of association of Group companies pertaining to specific areas of business,
• defining of the Group’s management principles in the policy entitled “Management and Organization”,
• obligation of all Group companies to prepare annual shipment and sales budgets as well as investment, financial and personnel planning,
• the regular monitoring of progress made throughout the year in all Group companies; if necessary, the taking of appropriate measures,
• regular audits and special audits performed by an internal audit department,
• operating of a groupwide monitoring system for the early detection of risks and a risk management system,
• agreeing of goals and deciding of a performance-oriented remuneration component for managers and senior executives of the Group companies.

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The Supervisory Board meets a minimum of four times a year, has the Executive Board report in detail, and discusses the development of business and the situation of the company with the Executive Board. It takes receipt of written reports submitted at regular intervals by the Executive Board on the course of business and the performance of the company.

The Supervisory Board deploys the following instruments in particular in performing its advisory and supervisory function:

• defining the allocation of duties at Executive Board level, with clear assignment of areas of competence,
• obligation of the Executive Board to submit regular, timely and comprehensive reports to the Supervisory Board,
• regular discussion of the planning, business development and the strategy with the Executive Board,
• determination of business activities and measures of the Executive Board that may only be carried out with Supervisory Board approval,
• obligation of the Executive Board to submit long-term corporate plans on an annual basis and to report on the execution of such plans and,
• when determining the remuneration of the Executive Board members, agreement on the variable components, geared toward the commercial success of the company and the overall performance of each individual Executive Board member.

In order to prepare its meetings and decisions the Supervisory Board has currently formed four standing committees:

The Presiding Committee undertakes the preparatory work in connection with the appointing of Executive Board members and, in place of the Supervisory Board plenum, makes decisions on business measures requiring urgent approval. The Presiding Committee confers whenever necessary in the form of meetings or telephone conferences.

The Audit Committee deals with the following in particular:

• the annual financial statements and the quarterly financial statements,
• the effectiveness of the internal control system, the internal audit system and the risk management system,
• issues relating to compliance with the provisions applicable to the company (corporate compliance) and
• the independence of the external auditor, the assignment of the audit mandate and the determination of key audit areas.

The Audit Committee meets at least four times a year and has the Executive Board report in writing and orally on the individual issues to be discussed, as well as having representatives of the independent auditor explain the report on their audit of the financial statements at company and at Group level.

The Strategy Committee is tasked with discussing the strategy of the company with the Executive Board in depth. It meets for this purpose whenever required.

The Nomination Committee, which is exclusively comprised of representatives of the shareholders, proposes suitable candidates to the Supervisory Board that, in turn, presents its proposals to the General Meeting of Shareholders for the election of shareholder representatives to the Supervisory Board. It becomes especially active in the run-up to the new elections to the Supervisory Board and advises in a suitable capacity.

The names of the members of the committees are listed in the section in the Group Management Reporton “Management and Control/Committees of the Supervisory Board”.

The Executive Board and the Supervisory Board view compliance with the statutory provisions applicable to the company’s activities and the corporate guidelines as an integral part of corporate governance. The Executive Board has expressly committed itself in our mission statement to observing and complying with legal framework conditions and ethical values. The obligation of managers at all levels also entails adherence to the relevant regulations in their respective areas of tasks and responsibilities. To this end, each superior must give his/her staff clear instructions as to their tasks and areas of responsibility and must document this accordingly. This responsibility includes ensuring that staff members have the competences necessary for fulfilling their compliance duties and the monitoring of this compliance. The regular requesting of appropriate reports is part of guaranteeing that compliance tasks are monitored. The Executive Board has defined this process in detail in a set of corporate guidelines. The Executive Board regularly reports to the Supervisory Board on compliance.

Along with the annual report, Salzgitter AG also publishes condensed interim accounts and an interim management report at the end of the first, second and third quarter of a financial year. This ensures that our shareholders are kept informed about the business performance and the situation of the company in as timely manner as possible. The dates of publication are announced in the financial calendar posted on the company's website. Furthermore, the Executive Board explains the results of each financial year ended at an annual results press conference, reported on by the media, which takes place directly after the meeting of the Supervisory Board when the financial statements are adopted.

In addition to this, we organize regular analysts' conferences for analysts and institutional investors in Frankfurt am Main and London. Finally, the Executive Board ensures that information which could have a considerable impact on the share price is published immediately in the form of ad-hoc releases disseminated simultaneously throughout Europe. All reports and statements are available in both German and English. more 

To the knowledge of the company, no member of the Executive Board or Supervisory Board owns a portion of the shares issued, either directly or indirectly, exceeding 1 %. There are currently no share option programs or similar security-based incentive systems implemented at the Salzgitter Group.