Corporate Governance Declaration
In this corporate governance declaration, we report, in accordance
with No. 3.10 of the German Corporate Governance Code
(DCGK) and Section 289a of the German Commercial Code (HGB)
on the principles of management and corporate governance. The
declaration contains the declaration of conformity, information
on corporate governance practices, a description of how the
Management Board and Supervisory Board work and key corporate
governance structures. The declaration is also available to
the public on our website at www.vonovia.de.
Corporate governance is the responsible management and
supervision of a company. The Management Board and the
Supervisory Board are committed to the principles of corporate
governance. The principles are the basis for the sustainable
success of the company and therefore guidelines for conduct in
the company’s daily management and business.
Good corporate governance strengthens the trust of our shareholders,
business associates, customers, employees and the
general public in Vonovia SE. It increases
the company’s transparency and strengthens our Group’s
credibility. With balanced corporate governance, the Management
Board and the Supervisory Board wish to safeguard
Vonovia SE’s competitiveness, strengthen
the trust of the capital market and the general public in the
company and sustainably increase the company’s value.
As a major housing company, we are aware of the particular significance
of our entrepreneurial actions for society at large. As
a result, we are also committed to the main aims and principles
of the corporate governance initiative of the German housing
industry, which we have been a member of since November
14, 2003. The initiative supplements the corporate governance
principles to include housing-specific aspects and is committed
to even greater transparency, an improved image and a more
competitive real estate sector.
Declaration of conformity with the German Corporate Governance
Code by the Management Board and Supervisory Board in
accordance with Section 161 of the German Stock Corporation
In February 2017, the Management Board and the Supervisory
Board declared compliance with the recommendations of the
German Corporate Governance Code in accordance with Section
161 of the German Stock Corporation Act (AktG) and made the
declaration publicly and permanently available on the company’s
Standards of corporate governance
Corporate governance, acting in accordance with the principles
of responsible management aimed at increasing the value of
the business on a sustainable basis, is an essential requirement
for the Vonovia Group, embracing all areas of the business. Our
corporate culture is founded on transparent reporting and corporate
communications, on corporate governance aimed at the
interests of all stakeholders, fair and open dealings between the
Management Board, the Supervisory Board and employees as
well as on compliance with the law.
The Code of Conduct provides the ethical and legal framework
within which we act and want to maintain a successful course
for the company. The focus is on dealing fairly with each other
but also in particular on dealing fairly with our tenants, suppliers,
customers and investors. The Code of Conduct specifies
how we assume our ethical and legal responsibility as a company
and is the expression of our company values.
Information on the company’s governing constitution
The designation Vonovia comprises Vonovia
SE and its Group companies. Vonovia is a European company (SE)
in accordance with the German Stock Corporation Act (AktG),
the SE Act and the SE Regulation. Its head office is in Düsseldorf.
It has three governing bodies: the Annual General Meeting
of Shareholders, the Supervisory Board and the Management
Board. The duties and authorities of those bodies derive from
the SE Regulation (SE-VO), the German Stock Corporation Act
and the Articles of Association. Shareholders, as the owners of
the company, exercise their rights at the Annual General Meeting.
According to the two-tier governance system, Vonovia SE has a Management Board and a
Supervisory Board. In the two-tier governance system, the
management of business and the monitoring of business are
strictly separated from each other. The duties and responsibilities
of these two bodies are clearly specified by law in the
German Stock Corporation Act.
In accordance with the governing laws, in particular the SE Regulation
and the German SE Employee Participation Act (SEBG),
the Supervisory Board is only made up of representatives of the
shareholders. The highest representative body of the employees
is the Group works council. In addition, an SE works council has
The Management Board and Supervisory Board of a company
listed in Germany are obliged by law (Section 161 of the German
Stock Corporation Act) to report once a year whether the officially
published and relevant recommendations issued by Government Commission German Corporate Governance Code, as valid
at the date of the declaration, have been, and are being, complied
with. Companies affected are also required to state which
of the recommendations of the Code have not been, or will not
be, applied and if not, why.
The Management Board reports in its declaration, also on behalf
of the Supervisory Board, on important aspects of corporate
governance pursuant to Section 289a of the German Commercial
Code (HGB) and No. 3.10 of the German Corporate Governance
Annual General Meeting
The Annual General Meeting decides in particular on the appropriation
of profit, the ratification of the acts of the members of
the Management Board and of the Supervisory Board, the appointment
of the external auditor, amendments to the Articles of
Association as well as specific capital measures and elects the
shareholders’ representatives to the Supervisory Board.
The Supervisory Board
The Supervisory Board appoints, supervises and advises the
Management Board and is directly involved in decisions of
fundamental importance to the company. The Supervisory Board
performs its work in accordance with the legal provisions, the
Articles of Association, its rules of procedure and its resolutions.
It consists of nine members, who are each elected for terms of
four financial years. The Supervisory Board continuously oversees
the management and advises the Management Board.
The Supervisory Board shall include what it considers an adequate
number of independent members. A Supervisory Board
member is, in particular, not to be considered independent if
he/she has personal or business relations with the company,
its bodies, a controlling shareholder or a company associated
with such a shareholder which may cause a substantial and not
merely temporary conflict of interest.
The aforementioned rules are to be taken into account when
making proposals to the shareholders at the Annual General
Meeting for the elections of Supervisory Board members. Account
is also to be taken of diversity. Proposed candidates for the Supervisory
Board chair shall be announced to the shareholders.
The Supervisory Board examines and adopts the annual financial
statements and the management report. It assesses and
confirms the proposal for the appropriation of profit, as well
as the consolidated financial statements and the combined
management report, on the basis of the report prepared by the
Audit Committee. The Supervisory Board reports in writing to
the shareholders at the Annual General Meeting on the result of
The chairman of the Supervisory Board is an independent member.
The same applies to the chairs of the committees which the
Supervisory Board has set up (see p. 38 et seq.).
The chairman of the Supervisory Board chairs the meetings and
coordinates communications. The members of the Supervisory
Board have generally the same rights and obligations. Supervisory
Board resolutions are above all passed in the Supervisory Board
meetings but also, if necessary, using the written procedure or
by other communication means. At least three meetings are
held every half-year. In addition, if necessary and on the basis
of the rules of procedure of the Supervisory Board, a meeting of
the Supervisory Board or its committees can be convened at any
time at the request of a member or the Management Board. In
the 2014 financial year, the Supervisory Board had sixteen meetings,
including telephone conferences.
The Supervisory Board must be composed in such a way that its
members as a group have the knowledge, ability and specialist
experience required to properly complete its tasks. Each Supervisory
Board member shall ensure that he/she has enough time to
carry out his/her mandate. As a rule, nominations for election to
the Supervisory Board should only be for persons who have not
yet reached the age of 75 at the time of the election.
At least one independent member of the Supervisory Board
must have expertise in the fields of accounting or auditing (Section
100 (5) of the German Stock Corporation Act).
A Supervisory Board member, who is also a member of the
Board of a listed company, shall, in addition to
the Supervisory Board mandate in the company, not accept
more than two other supervisory board mandates in listed
companies or in supervisory bodies of companies which make
similar requirements and which do not belong to the Group of
the company for which he/she is on the Management Board.
Supervisory Board members shall not exercise directorships or
similar positions or advisory tasks for important competitors of
Supervisory Board committees
The Supervisory Board sets up an Executive and Nomination
Committee, an Audit Committee and a Finance Committee from
among its members. Further committees are set up as required.
Committees are made up of at least four members of the Supervisory
Board. The committees prepare subjects which are to be
discussed and/or resolved by the Supervisory Board. In addition, they pass resolutions on behalf of the Supervisory Board. The
basis for committee work was the transfer of tasks and responsibilities
within the scope of the legal provisions.
The Executive and Nomination Committee is made up of the
chairman of the Supervisory Board and three other members to
be elected by the Supervisory Board. The chairman of the Supervisory
Board is the chairman of the Executive and Nomination
Committee. The tasks of this committee are in particular to
prepare the appointment of Management Board members, to
advise on the remuneration system, to assign responsibilities
and to decide in cases of legal transactions with Management
Board members and conflicts of interest.
The Supervisory Board appoints one of the members of the
Audit Committee as the chairman of the Audit Committee.
When electing the committee members, the Supervisory
Board shall ensure that the chairman of the Audit Committee
knowledge and experience in the application of
accounting principles and internal control processes. The Committee
chairman should be independent and not be a former
member of the Management Board whose appointment ended
less than two years before his appointment as chairman of the
Audit Committee. The chairman of the Supervisory Board shall
not be the chairman of the Audit Committee.
The Audit Committee handles, in particular, the monitoring of
the accounting process, the effectiveness of the internal control
system, risk management system and internal audit system,
the audit of the annual financial statements, here in particular
the independence of the auditor, the services rendered additionally
by the auditor, the issuing of the audit mandate to the
auditor, the determination of strategic audit objectives and the
fee agreement, and – unless another committee is entrusted
therewith – compliance. The Audit Committee prepares the
resolutions of the Supervisory Board on the annual financial
statements (and, if applicable, the consolidated financial statements),
and the agreements with the auditor (in particular the
issuing of the audit mandate to the auditor, the determination
of strategic audit objectives and the fee agreement). The Audit
Committee takes suitable action to determine and monitor the
independence of the auditor. In place of the Supervisory Board,
the Audit Committee adopts resolutions on the approval of the
contracts with the auditor on additional consultancy services,
insofar as, according to the Articles of Association or the rules
of procedure for the Management Board, these contracts require
The Finance Committee prepares the resolutions of the Supervisory
Board on the following matters:
- Financing and investment principles, including the capital structure of the Group companies and dividend payments
- Principles of the acquisition and disposal policies, including the acquisition and disposal of individual shareholdings of strategic importance
In place of the Supervisory Board, the Finance Committee adopts
resolutions in particular on general guidelines and principles for
the implementation of this strategy, including the handling of
currency risks, interest, liquidity and other financial risks and
the handling of credit risks and the implementation of external
financing principles as well as on important transactions
regarding the sale of real estate, the granting of securities, the
acquisition and establishment of subsidiaries as well as on the
contracting of loans.
Cooperation between the Management Board and the Supervisory Board
The Management Board develops the strategy of the company
in cooperation with the Supervisory Board and discusses the
current status of its implementation with the Supervisory Board
at regular intervals. Furthermore, the Management Board regularly
informs the Supervisory Board in written or verbal reports
of topics including the development of business and the situation
of the company. In this way, the Supervisory Board receives
detailed documents from the Management Board without delay
and regularly on the economic development and the company’s
current situation as well as half-yearly a risk management report
which deals with the most important risks for the business
of Vonovia SE. On the basis of these
reports, the Supervisory Board monitors the company’s management
by the Management Board.
Avoidance of conflicts of interest
In the financial year, there were no conflicts of interest of Management
Board or Supervisory Board members which are to be
reported immediately to the Supervisory Board.
The Management Board members are jointly accountable for
independently managing the company in the company’s best
interests while complying with the applicable laws and regulations,
the Articles of Association and the rules of procedure. In
doing so, they must take account of the interests of the shareholders,
the employees and other stakeholders.
The Management Board, which must be made up of at least
two members, is appointed by the Supervisory Board, whereby
the term of office must not exceed six years. The Management
Board is monitored and advised by the Supervisory Board. It has adopted rules of procedure and resolved the allocation of duties
in consultation with the Supervisory Board. The Management
Board has a chairman who coordinates the work of the Management
Board and represents it in dealings with the Supervisory
Board. The chairman of the Management Board has the right to
veto Management Board resolutions.
The members of the Management Board are Rolf Buch (chairman)
as well as Klaus Freiberg and Dr Stefan A. Kirsten. Further
information is to be found in the 2014 Annual Report on page 215
The Management Board informs the Supervisory Board regularly,
in due time and comprehensively in line with the principles of
diligent and faithful accounting in accordance with the law and
the reporting duties specified by the Supervisory Board.
The Management Board develops the company’s strategy, coordinates
it with the Supervisory Board and implements it. The
Management Board ensures that all statutory provisions and the
company’s internal policies are complied with. The Management
Board also ensures appropriate risk management and risk controlling
in the company.
It submits the corporate planning for the coming year to the
Supervisory Board as well as the mid-term and strategic planning.
The Management Board informs the Supervisory Board
chairman without delay of important events which are essential
for the assessment of the situation and development or for the
management of the company as well as of any shortcomings
which occur in the monitoring systems.
The Management Board requires the approval of the Supervisory
Board for certain important transactions. Transactions and
measures which require Supervisory Board approval are submitted
to the Supervisory Board in good time.
The Management Board members are obliged to disclose any
conflicts of interest to the Supervisory Board without delay and
to inform the other Management Board members accordingly.
The Management Board members are subject to a comprehensive
non-competition obligation. Management Board members
may only take up sideline activities, in particular supervisory
board mandates outside the Group, with the approval of the
Important transactions between the company, on the one hand,
and the Management Board members as well as persons they
are close to or companies they have a personal association
with, on the other hand, require the approval of the Supervisory
Board. Reference is made to such relations in the remuneration
Shareholders can obtain full and timely information about
our company on our website and can access current as well as
historical company data. Among other information, Vonovia regularly posts all financial reports, important information
on the company’s governing bodies, its corporate
governance documentation, information requiring ad-hoc disclosure,
press releases as well as directors’ dealings notifiable
pursuant to Section 15a of the German Securities Trading Act
(WpHG). Our shareholders can exercise their voting rights at the
meeting or instruct a proxy of their choice or one of the proxies
provided for that purpose by the company. Our shareholders are
also able to vote by postal ballot. The details are in the invitation
to the Annual General Meeting. The entire documentation for
the Annual General Meeting and opportunities to authorise, and
issue instructions to, the company’s proxies, as well as opportunities
for postal ballots, are available to shareholders at all times
on the website.
Accounting and financial statement auditing
The Annual General Meeting elected KPMG AG Wirtschaftsprüfungsgesellschaft
as auditor for the annual financial statements
and consolidated financial statements. We prepare the annual
financial statements of Vonovia SE in accordance with the German
Commercial Code (HGB) and the consolidated financial statements
in accordance with the International Financial Reporting
Standards (IFRS) to be applied in the EU. In addition, we prepare
a combined management report as required by the German
Commercial Code and the German Stock Corporation Act (AktG).
The Management Board is responsible for financial accounting.
The Supervisory Board examines and adopts or approves the
annual financial statements, the consolidated financial statements
and the combined management report.
In addition to our annual financial statements, we also prepare
quarterly reports for the first, second, and third quarters. Our
quarterly reports comply with the German Securities Trading Act
and are discussed with the Audit Committee of the Supervisory
Board before they are published. Under German stock corporation
and commercial law, there are special requirements for
internal risk management that apply to Vonovia. Therefore, our risk
management system covers risk inventory, analysis, handling
and elimination. In accordance with Section 317 (4) of the German
Commercial Code applicable to listed companies, KPMG
assesses in its audit the risk early warning system as part of the
risk management system.
Furthermore, we maintain throughout the Group standard documentation
of all our internal control mechanisms and continually
evaluate their effectiveness. Our auditor has not reported any
material weaknesses in the accounting-related internal control
system detected in its audit to the Management Board and the
In the combined management report, we provide comprehensive
information on the main features of the internal control and risk
management system with regard to the accounting process and
the Group accounting process in accordance with our reporting
duties pursuant to Sections 289, para. 5, and 315, para. 2, No. 5 of
the German Commercial Code.