Declaration on the company management
Transparency as well as good and responsible company management traditionally rank very highly for the Management Board and Supervisory Board of HAMBORNER REIT AG. The Management Board reports on the company management in this declaration – also on behalf of the Supervisory Board – in accordance with Section 3.10 of the German Corporate Governance Code, as well as pursuant to Section 289f Para. 1 of the German Commercial Code.
Declaration of compliance
The government commission published the German Corporate Governance Code for the first time on February 26, 2002. In addition to various statutory requirements, the code includes recommendations and suggestions for good and responsible company management. The Government Commission for the German Corporate Governance Code recently adopted various amendments or additions to the code on February 7, 2017. The current version, which was published in the German Federal Gazette on April 24, 2017, is available for download below.
HAMBORNER REIT AG declares its support for the German Corporate Governance Code published by the Government Commission for Corporate Governance and amended on February 7, 2017. Even before the first-time publication, HAMBORNER largely complied with the assessment guide for good company management specified in the code. Immediately after the coming into force of the Corporate Governance Code in August 2002, HAMBORNER introduced measures for the implementation of the code. These measures are supplemented on an ongoing basis and adjusted to the ever-changing requirements.
Since the coming into force of the German Corporate Governance Code, the Management Board and Supervisory Board of HAMBORNER REIT AG have always released a declaration of compliance annually in accordance with Section 161 of the German Stock Company Act. The declaration was updated in November 2019 and is available for download below.
Archive of the declarations of compliance
The declarations of compliance of previous years are available for download here as a PDF file.
Corporate Governance report
You can download the recent Corporate Governance report here as a PDF file.
Tasks for company management practices
Shareholders and general shareholders' meeting
The shareholders of HAMBORNER REIT AG exercise their rights at the general shareholders' meeting held at least once a year. The latter decides on all matters determined by the law with binding effect for all shareholders and the company. The Chairman of the Supervisory Board holds the Chairmanship at the Annual General Meeting. Each share confers one vote in the resolutions.
Each shareholder who has duly registered is entitled to participate in the general shareholders' meeting. Shareholders who are prevented from attending personally can have their voting right exercised by a shareholders' association, a bank proxies provided by HAMBORNER who are obliged to follow instructions or another representative of their choice.
The agenda of the general shareholders' meeting as well as all the documents necessary for voting are published in compliance with the requirements under company law and made available on HAMBORNER's website.
The Supervisory Board of HAMBORNER REIT AG consists of nine members in accordance with § 9 Para. 1 of the Articles of Association and is composed of six shareholder representatives and three employee representatives in accordance with Section 96 Para. 1 of the German Stock Company Act and Sections 1 Para. 1 and 4 Para. 1 of the German One-Third Employee Participation Act [Drittelbeteiligungsgesetz]. The six shareholder representatives are elected by the general shareholders' meeting and the three employee representatives in accordance with the provisions of the German Works Constitution Act [Betriebsverfassungsgesetz]. The term of office of the Supervisory Board amounts to five years. The tenure of office of the current Supervisory Board ends at the close of the general shareholders' meeting that adopts a resolution on the discharge of the Supervisory Board for the financial year 2019. Bärbel Schomberg was elected Chairwoman of the Supervisory Board and Dr. Andreas Mattner Deputy Chairman.
The Supervisory Board has issued procedural rules which take into account requirements of the German Corporate Governance Code. Some of the Supervisory Board activities take place in committees. The committees in existence in 2019 were the Executive Committee, the Audit Committee and the Nominating Committee.
In accordance with item 5.4.1 of the German Corporate Governance Code and section 298f (2) no. 6 HGB, the Supervisory Board has developed an expertise and diversity concept that forms the basis for its composition and the formulation of election recommendations to the Annual General Meeting. The aim of the diversity concept for the Supervisory Board is to actively harness diversity as a factor in the company’s success and ensure that different perspectives, skills and backgrounds are reflected in the activities of the Supervisory Board.
The concept states that, in addition to personal and professional suitability, the following aspects in particular must be taken into account in the composition of the Supervisory Board:
· Different career and educational backgrounds
· Appropriate gender representation
· Balanced age structure
· Majority of independent members
· Criteria of internationality
The Supervisory Board has defined a profile of skills and expertise within the meaning of the Code. This profile states that the Supervisory Board must be composed in such a way that its members collectively have the knowledge, skills and professional expertise required to properly perform their supervisory duties. The Supervisory Board must collectively cover all of the areas of expertise that are relevant to HAMBORNER’s business activities. This includes sector-specific knowledge of the real estate industry and expertise in the areas of accounting, auditing, controlling, financing, capital markets, risk management, technology/digitalisation, and legal, compliance and corporate governance. Within this, the individual skills of the individual members may complement each other. The Supervisory Board in its current composition satisfies all of the defined objectives and collectively covers the entire profile of skills and expertise. The Supervisory Board members have different career and educational backgrounds and all have the necessary professional and personal qualifications.
In accordance with the German Act on the Equal Participation of Women and Men in Leadership Positions in the Public and Private Sectors, a target gender quota of 30% has been defined for the composition of the Supervisory Board. The Supervisory Board currently has a total of nine members including three women, meaning it meets the defined quota in full.
To meet the requirements concerning a balanced age structure, the Rules of Procedure of the Supervisory Board define a regular limit of 15 years for membership of the Supervisory Board. In addition, no one may be recommended for election if they are more than 75 years of age. The above criteria are currently met and the Supervisory Board has a balanced age structure.
In accordance with a recommendation in item 5.4.2 of the German Corporate Governance Code, the Supervisory Board should include what it considers to be an appropriate number of independent members. Within the meaning of this recommendation, Supervisory Board members are considered to be non-independent in particular if they have a personal or business relationship with the company, its governing bodies, a controlling shareholder or a company affiliated with the controlling shareholder that may cause a substantial and not merely temporary conflict of interest. All of the shareholders’ representatives on the Supervisory Board in its current composition are considered to be independent. The Supervisory Board will continue to have a majority of independent members in future.
In addition, the Supervisory Board as a whole must have sufficient international experience. The majority of the current Supervisory Board members have extensive experience and expertise from international activities and meet the requirements in full The composition of the Supervisory Board, its committees and the remuneration can be found here.
The Management Board of HAMBORNER REIT AG currently consists of two members. The Management Board runs the company on its own responsibility. The members of the Management Board are appointed by the Supervisory Board. The procedural rules govern the division of responsibilities and co-operation on the Management Board. After the coming into force of the German Corporate Governance Code in 2002 - and taking into account the consequences resulting from the amendments/additions approved by the government commission at any one time - the procedural rules applicable to the Management Board have also been adjusted accordingly in each case.
The Supervisory Board has also developed an expertise and diversity concept for the Management Board that takes into account personal and professional expertise as well as a balanced gender and age structure. The current Management Board members have the necessary career and life experience to ensure the successful and proper management of the company and have professional profiles that complement each other. The Supervisory Board has also defined a target gender quota of 30% for the Management Board to be met by 30 June 2022. This quota is not met at present.
Management Board Remuneration
The members of the Management Board, the departmental allocation and the remuneration structure can be found here.
Share Ownership by the Management Board and Supervisory Board
The total holding of all the shares in HAMBORNER REIT AG directly or indirectly held by the Management Board and Supervisory Board was above the limit determined for individual disclosure of 1% of the issued shares with none of the officers at the end of the financial year 2019.
Notifiable purchase and sale transactions were reported to HAMBORNER as follows in 2019:
Announcements can be found here.
Consistent, comprehensive and up-to-date information ranks very highly at HAMBORNER. For this reason, we regularly, promptly and comprehensively inform our shareholders, all other capital market participants, financial analysts as well as the relevant media, but also our employees, about the position of the company and significant changes.
The reporting of HAMBORNER REIT AG is carried out in the annual report, at press and analyst conferences, in the interim reports and the half-yearly financial report. In addition, information is published regarding press or ad-hoc announcements. In the process we primarily use the Internet for the distribution of information.
Declaration of voluntary commitment to the Institute for Corporate Governance in the German property business (ICG)
The ICG has developed "Principles of value-based management in the property business" as a comprehensive guiding principle independent of the legal form. The principles form the basis for value-based, professional and sustainable management. HAMBORNER has declared its support for these principles in a declaration of voluntary commitment.
Financial reporting and audit of financial statements
HAMBORNER REIT AG prepares both financial statements in accordance with the International Financial Reporting Standards (IFRS) and in accordance with German commercial law. Both financial statements are prepared by the Management Board, audited by the statutory auditor and the Supervisory Board and published within 90 days of the conclusion of the financial year. The interim reports and the half-yearly financial report are discussed with the Management Board by the Audit Committee before publication occurring within 45 days after the end of the reporting period. Moreover, it was agreed with the statutory auditor that it notifies the Supervisory Board immediately about possible grounds for exclusion and lack of impartiality that arise as well as about significant findings and incidents during the audit. There was no reason for this in the context of the audits for the financial year 2019.
Control measurements and risk management
HAMBORNER REIT AG has filed its strategic objectives with value-orientated ratios. The control system is geared to making a contribution to the attainment of objectives. It ranges from standardised capital expenditure accounts for individual properties through to an integrated budget and medium-term plan at the company level. Key ratios in each investment decision are the internal rate of return (IRR) as well as annual earnings and cash flow contributions. The two most important control measurements at the company level are the FFO and the NAV per share. The company's responsible treatment of risks is one of the principles of good Corporate Governance. Systematic risk management within the framework of our value-oriented company management ensures that risks are recognised and assessed early and risk positions are optimised. HAMBORNER's early risk detection system is also subject to review by the statutory auditor. It is continuously enhanced and adjusted to the changing economic conditions. The Management Board advises the Supervisory Board at regular intervals on existing risks and their development. The risk report reproduced in the annual report contains details on risk management.
Working practices of the Management Board and Supervisory Board
The German Stock Company Act applies to HAMBORNER REIT AG as a company under German law. A fundamental principle of German corporation law is the dual management system with the executive bodies of the Supervisory Board and Management Board, both of which have independent responsibilities in each case. The Management Board and Supervisory Board work closely together on a basis of trust in managing and monitoring the company.
The two-person Management Board manages the business of the company with the objective of sustainable value enhancement and in the interests of the company.
The Management Board advises the Supervisory Board promptly and comprehensively in writing and verbally at the regular meetings about business developments, the position of the company - including risk management - as well as the short and medium-term plans. Use is only made of the possibility of passing resolutions in the written circulation procedure in cases of particular urgency. This is mainly the case with property purchases and sales.
In particular, the Chairman of the Supervisory Board is in regular contact with the Management Board in order that they can inform each other about the current development of the business environment, significant business transactions and upcoming decisions.
The company has concluded a pecuniary loss liability insurance policy (D&O liability insurance) for members of the Management Board and members of the Supervisory Board. This covers pecuniary losses from the work as a member of the executive bodies and supervisory bodies of HAMBORNER REIT AG. The sum insured is €15.0 million per claim and not more than €30.0 million per insurance year. In accordance with section 93(2) AktG and item 3.8 of the Code, deductibles for members of the Management Board and Supervisory Board have also been agreed, amounting to at least 10% of the claim and up to at least one and a half times the annual fixed renumeration of the officer. The insurance cover does not apply in the event of wilful intent, such that cover previously granted lapses retroactively were applicable in the event of (subsequent) discovery and benefits provided must be reimbursed to the insurer. The annual insurance premium currently amounts to around €24 thousand plus insurance tax.
The current report of the Supervisory Board is reproduced in the annual report in each case.