Corporate Governance

Corporate Government Statement

CORPORATE GOVERNANCE STATEMENT PURSUANT TO SECTIONS 289A AND 315 PARA. 5 OF THE GERMAN COMMERCIAL CODE (HGB)

GERRY WEBER International AG is listed in the Prime Standard of Deutsche Börse and a member of the SDAX. As a listed family-run company, GERRY WEBER International AG attaches special importance to good corporate governance. We are therefore committed to responsible and transparent corporate governance aimed at increasing the value of our company in a sustainable manner and creating added value for our company. We strive to justify the confidence placed in us by investors, business partners, customers, employees and society and to constantly refine our transparent corporate governance.

We therefore attach importance to complying with the recommendations and suggestions of the German Corporate Governance Code. Our latest declaration of conformity pursuant to section 161 of the German Stock Corporation Act (AktG) and the declarations of conformity of the previous years can be found on our website at our website.


DECLARATION OF CONFORMITY PURSUANT TO SECTION 161 OF THE GERMAN STOCK CORPORATION ACT (AKTG)

In accordance with section 161 of the German Stock Corporation Act (AktG), the Supervisory Board and the Managing Board of GERRY WEBER International AG declare that the company has, since the publication of the last annual Declaration of Conformity on 24 November 2015, complied with the recommendations made by the Government Commission of the German Corporate Governance Code as amended on 5 May 2015 and published by the Federal Ministry of Justice in the official section of the Federal Gazette, save for the exceptions outlined below:

Code 4.2.3 – Compensation cap for the Managing Board: The amount of compensation shall be capped, both overall and for the variable compensation components. As a general rule, the variable compensation is capped in the Managing Board contracts of GERRY WEBER International AG as the parameters used to determine it are limited. The Supervisory Board may grant a special bonus and / or adjust the calculation of the variable performance-based compensation components only in exceptional cases because of special circumstances or achievements. This shall not result in an unreasonable advantage or disadvantage for the Managing Board.

Code 5.2 – Chairman of the Audit Committee: The Chairman of the Supervisory Board is also the Chairman of the Audit Committee, which means that GERRY WEBER International AG does not comply with the recommendation of the Code that these positions be held by two different persons. The company is of the opinion that the dual chairmanship makes supervision more efficient and improves communication within the Supervisory Board.

Code 5.4.1 – Age limit and regular limit of length of membership for members of the Supervisory Board: No age limit and no regular limit of length of membership have been defined for the members of the Managing Board and the Supervisory Board, as abilities, qualifications and experience are regarded as the relevant criteria for appointment to these bodies. The company is of the opinion that it only stands to benefit from the knowledge and the experience of older Supervisory Board members, regardless of the length of their Supervisory Board membership.

Code 5.4.6 – Compensation of the members of the Supervisory Board: Members of the Mediation Committee, the Human Resources Committee, the Nomination Committee and the Audit Committee receive no additional compensation, as the company is of the opinion that the regular Supervisory Board compensation is sufficient.

Code 7.1.2 – Consolidated financial statements: The consolidated financial statements were publicly accessible within 120 days of the end of the reporting period. The interim reports are publicly accessible within 45 days, which is in accordance with the recommendations of the German Corporate Governance Code. GERRY WEBER International AG aims to comply with the 90-day deadline for the consolidated financial statements recommended by the Code in future. So far, the company has not complied with the recommended deadlines in order to ensure a higher quality of the figures reported.

This declaration of conformity dated 22 November 2016 and the declarations of the previous years are also available on the company’s website.


RESPECT, TRUST, PERFORMANCE, COMMITMENT TO OUR CUSTOMERS AND CORPORAT RESPONSIBILITY

Compliance with legal provisions and internal rules is deeply rooted at GERRY WEBER. GERRY WEBER International AG has a Group-wide compliance organisation which aims to counteract and prevent illegal and unethical behaviour. Specific organisational measures and processes have been developed to prevent, identify and – if applicable – sanction individual misbehaviour. In addition to applicable legal provisions, the compliance programme of GERRY WEBER International AG is based on a code of conduct that is binding upon all employees.

These principles (Code of Conduct) are based on our general values and provide guidance for our day-to-day activities. The code comprises all behavioural rules for dealing with colleagues, customers, suppliers and other external stakeholders. Besides the code of conduct, our compliance structure comprises rules relating to social compliance, competition and antitrust law, the avoidance of conflicts of interest, gifts and invitations, the capital market and communications as well as health, safety and the environment. We treat each other with respect and esteem. We are committed to respecting individual and cultural differences as well as to offering equal opportunities without making a distinction on the grounds of age, sex, religion, skin colour, nationality, ethnic origin, disability, civil status or other characteristics. Disrespectful actions towards the company, shareholders, customers, business partners or colleagues which may be detrimental to GERRY WEBER International AG cannot be tolerated. Our personal behaviour ensures that the name of our company deserves trust at all times.

For reasons of security and confidentiality, we attach great importance to the careful treatment, storage and use of data and information. GERRY WEBER respects the privacy of its customers, employees and business partners and aims to maintain the highest standards in the processing of data. The IT unit takes appropriate organisational and technical measures to ensure secure and protected access to electronic data.

Our actions are guided by performance and the satisfaction of our customers. We expect the executive bodies of our company and our employees to always deliver the best possible performance to the benefit of our customers and our company. We are committed to observing and complying with laws and legal regulations. Wherever laws and regulations are violated, we will immediately initiate disciplinary measures; this also applies to any violation of our principles of responsible behaviour. We expect our employees to always act in accordance with the highest professional standards.

GERRY WEBER is committed, without any restriction whatsoever, to fair and open competition as well as to fair contracts with all business partners.

All our activities are geared towards maximum customer satisfaction. We do everything to ensure that our customers always get the best possible performance together with the highest quality. To guarantee the best possible performance, we support and encourage the constant training and education of our employees, while always remaining committed to the benefit and satisfaction of our stakeholders.

As a global fashion and lifestyle company, as an important employer in the region but also on behalf of our customers, we are committed to responsible and sustainable corporate governance. We believe that corporate responsibility comprises a wide variety of environmental, economic and social aspects. We constantly strive to improve our respectful treatment of man and nature in all three areas. For more information on “social responsibility” and “sustainability”, see our Sustainability Report at www.gerryweber.com under Company / Sustainability.


WORK OF THE MANAGING BOARD AND THE SUPERVISORY BOARD

Headquartered in Halle/Westphalia, GERRY WEBER International AG is a company under German law. One of the fundamental principles of German Stock Corporation Law is the dual management system comprising a Managing Board and a Supervisory Board. The Managing Board and the Supervisory Board cooperate closely to ensure that our objectives are achieved.

Managing Board

Under the dual board system of GERRY WEBER International AG, the Managing Board is responsible for managing the company and to represent the company in transactions with third parties. The Managing Board defines the corporate objectives and the strategic positioning of the GERRY WEBER Group and controls and monitors the business units and subsidiaries. The Managing Board gears its activities and decisions to the interests of the company. In doing so, it is committed to creating sustainable value.

The members of the Managing Board manage the company in accordance with the applicable laws, the statutes, the rules of procedure of the Managing Board as well as all applicable internal rules and regulations. They undertake to implement the rules and recommendations of the German Corporate Governance Code within the scope of the company’s abilities and resources and to the extent that no declarations to the contrary were made in the Managing Board’s annual declaration pursuant to section 161 of the German Stock Corporation Act (AktG). For the latest declaration of conformity pursuant to section 161 of the German Stock Corporation Act (AktG) and the declarations of conformity of the previous years, visit our website at www.gerryweber.com.

The Managing Board is currently composed of two members. The rules of procedure of the Managing Board show which Managing Board member is responsible for which business segment; amendments require the unanimous decision of the Managing Board and the approval of the Supervisory Board. As a general rule, the Managing Board takes its decisions by a simple majority. In the event of a tie, the Chairman has the casting vote.

The Managing Board informs the Supervisory Board regularly, without delay and comprehensively of all issues of importance to the company with regard to planning, business development, risk situation and risk management. It coordinates the company’s strategic approach with the Supervisory Board. The Managing Board must obtain the Supervisory Board’s prior approval for certain transactions which are defined in the statutes of GERRY WEBER International AG and in the rules of procedure of the Managing Board.

Supervisory Board

The Supervisory Board supervises and supports the Managing Board and is directly involved in decisions that are of fundamental importance for the GERRY WEBER Group. The Supervisory Board maintains a constant exchange with the Managing Board, which ensures that it is at all times informed of the business policy, corporate planning as well as the strategy. The Supervisory Board approves the annual budget and the financing framework and endorses the financial statements of GERRY WEBER International AG and the Group on the basis of the auditor’s reports.

The Chairman of the Supervisory Board coordinates the work on the Supervisory Board, leads its meetings and represents the body’s interests externally. The Supervisory Board has laid down its own rules of procedure, which also apply to the committees of the Supervisory Board. The Supervisory Board takes its decisions on the basis of resolutions passed by a simple majority of the voting Supervisory Board members. In the event of a tie, the Chairman has the casting vote. This procedure also applies to the appointment and dismissal of Managing Board members by the Supervisory Board. As a general rule, resolutions are adopted at meetings. To simplify the procedure, the Supervisory Board may stipulate that resolutions be passed by way of a circulation procedure.

The Supervisory Board of GERRY WEBER International AG is currently composed of twelve members, six of whom were elected as representatives of the workforce. In accordance with the recommendations of the German Corporate Governance Code, the six representatives of the shareholders are elected individually by the Annual General Meeting. The latest scheduled election of the Supervisory Board members was held at the Annual General Meeting on 16 April 2015. The representatives of the workforce were elected in February 2015. The term of office of all Supervisory Board members will end at the end of the Annual General Meeting resolving on discharging the Supervisory Board from liability for the financial year 2018/19.

With regard to the composition of the Supervisory Board of GERRY WEBER International AG, we make sure, at all times, that all members have the knowledge, skills and expert experience required to perform their tasks properly. Diversity is another aspect ensured in the composition of the Supervisory Board. The aim is to appoint the members of the Supervisory Board in such a way as to ensure the competent control and advice of the Managing Board as well as the proper exercise of the decision-making rights and other rights of the Supervisory Board.

The Supervisory Board has set itself objectives regarding its future composition, allowing itself sufficient lead time. The following objectives have been defined taking into account the size of the Supervisory Board, the company’s specific requirements as well as diversity:

  • Members of the Supervisory Board shall have experience in the fields of corporate governance, strategy and human resources. In addition, familiarity with the company and the markets in which it operates and/or specific knowledge of the customers’ industries are required.
  • At least one independent member must have knowledge of accounting, internal control procedures or auditing. This independent member of the Supervisory Board shall not be a former member of the Managing Board whose term of office ended less than two years ago.
  • At least one shareholder representative shall have several years of international experience from a professional activity or be a foreign national.
  • Supervisory Board members shall not sit on an executive body or perform advisory tasks at a material competitor of the company or a Group company.
  • No more than two former members of the Managing Board shall sit on the Supervisory Board. Managing Board members may not become members of the Supervisory Board of the company within two years after the end of their appointment unless they are appointed upon a motion presented by shareholders holding more than 25% of the voting rights in the company. In this case appointment to the chairmanship of the Supervisory Board shall be an exception to be justified to the Annual General Meeting.
  • Supervisory Board members shall have sufficient time to perform their mandate, so that they can fulfil their mandate with the required regularity and care. A Supervisory Board member who sits on the Managing Board of a listed company shall not accept more than a total of three Supervisory Board mandates in listed companies or in supervisory bodies of companies with similar requirements that are not members of the group of which the company for which the Managing Board activity is performed is a member.
  • The Supervisory Board aims for an appropriate degree of female representation. With a view to complying with the legal provisions that became effective on 1 January 2016, the company considers it appropriate if at least one third of the positions of the shareholder representatives and staff representatives are filled with women. This will be taken into account by the Supervisory Board in its election proposals for the next scheduled election of the Supervisory Board or when a Supervisory Board member departs prematurely.
  • At least three of six shareholder representatives on the Supervisory Board shall be independent.

A Supervisory Board member is considered independent if he/she has no personal or business relations with the company, its executive bodies, a controlling shareholder or a related party which may cause a substantial and not merely temporary conflict of interest. The existence of an employment relationship between a member of the Supervisory Board and a company of the GERRY WEBER Group or the existence of old-age pension commitments of one of these companies in favour of Supervisory Board members as such shall not be deemed to constitute a conflict of interest. In accordance with the recommendations of the Code, the Supervisory Board has subjected itself to an efficiency review. Two members of the Supervisory Board are former members of the Managing Board of GERRY WEBER International AG, who resigned from the company’s Managing Board more than eight years and more than two years ago, respectively. The Supervisory Board has three independent members, which is a sufficiently high number. There were no conflicts of interest of individual Supervisory Board members.

To ensure that its tasks are performed efficiently, the Supervisory Board has set up four committees, which prepare the decisions of the Supervisory Board as well as some of the topics addressed by the full Supervisory Board. The Supervisory Board has formed the following committees from among its members: a Mediation Committee, a Human Resources Committee, an Audit Committee and a Nomination Committee. The Chairman of the Supervisory Board currently also serves as the Chairman of the Human Resources Committee, the Audit Committee and the Nomination Committee, as the company and the Supervisory Board are of the opinion that this makes supervision more efficient and improves the communication within the Supervisory Board.


EQUAL PARTICIPATION OF WOMEN AND MEN IN LEADERSHIP POSITIONS

When it comes to appointing Managing Board members, nominating Supervisory Board members and filling executive positions, the Supervisory Board supports the company’s efforts to achieve an appropriate degree of female representation.

At the time the present Corporate Governance Statement was updated, the Managing Board of GERRY WEBER International AG was composed of two members – Ralf Weber (CEO) and Dr. David Frink (CFO). No women sit on the company’s Managing Board at present. Against this background and in view of the existing Managing Board contracts, it was not planned to appoint women to the Managing Board of GERRY WEBER International AG before the expiry of the statutory deadline on 30 June 2017. As at 30 June 2017, the degree of female representation was 36.8% (31 October 2016: 43.8%) at the first management tier below the Managing Board of GERRY WEBER International AG and 60.6% (31 October 2016: 53.3%) at the second management tier. Based on the assumption that the corporate structure will remain unchanged, the future aim is to have a minimum share of women of 30% at the first management tier below the Managing Board of GERRY WEBER International AG and of 50% at the second management tier. The shareholder representatives fulfilled the statutory female representation rate of 30% even before the coming into force of the “Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungspositionen” (Law on the Equal Participation of Women and Men in Leadership Positions) on 1 January 2016.

Based on the assumption that the corporate structure will remain unchanged, the share of women on the Managing Board and the first and second management levels below the Managing Board of GERRY WEBER International AG is to reach the above targets at the end of the current financial year 2016/17 (31 October 2017). The company will regularly report on the status quo and the achievement of the defined targets in the Group management report and the Corporate Governance Statement.

In addition to this Corporate Governance Statement, the Managing Board and the Supervisory Board publish a separate report on corporate governance at GERRY WEBER International AG in accordance with the recommendations in section 3.10 of the German Corporate Governance Code.

Halle/Westphalia, 30 June 2017

GERRY WEBER International AG