Corporate Governance

One characteristic sets Haniel apart from many other family-owned companies: Since the start of the 20th ­century, managers from outside the family have been responsible for the Corporate Governance. No ­family members work in the Haniel Group. Entrepreneurial decisions can be made free from familial obligations. The family attaches importance to sustainable growth and value enhancement. The steps to be taken along the way are at the discretion of the Management Board, which confers with the board of the Company. The basic structure of Corporate Governance at Haniel thus adheres to the standards set out in the German law governing stock corporations.

The roughly 690 shareholders are organised in the Shareholders’ Meeting. It meets once a year and elects from its midst six shareholder representatives to serve five years on the Supervisory Board. The shareholder representatives and six employee representatives on the Supervisory Board help to shape the fundamental business policies of the ­Company and influence the corporate strategy. The Supervisory Board has equal representation as a co-determined monitoring body; it is always chaired by a member of the family. Shareholder and employee representatives jointly appoint and dismiss members of the Management Board, monitor their work and support them in an advisory capacity. Four members of the Supervisory Board form the Audit Committee, which also has equal representation. This committee monitors the accounting process and the effectiveness of the internal control system, the risk ­management system, the Internal Auditing office, and the compliance management system. Furthermore, the Committee discussed the independence and selection of the auditor and approved permitted non-audit services. In addition, there is a ­Personnel Committee which discusses the composition of the Management Board, Management Board ­remuneration and other matters relating to the Management Board. Details of the work of the Supervisory Board in the 2017 ­financial year are contained in the Report by the Super­visory Board. The Shareholders’ ­Meeting elects also from its midst 30 members for the ­Advisory Board, which facilitates communication between the executive bodies of the Company (Supervisory Board and Management Board) and the members of the family.

The Haniel Holding Company itself, as well as through its divisions, is active in many different economic and social systems, and thus encounters differing cultural and national standards as well as legal regulations. It is ­precisely this that makes it essential that all employees at every level of the Company share the same values of openness and integrity. Essential components of the ­Haniel culture are the principles of legality, ­incorruptibility and fair competition. Haniel expressly commits itself to fair competition in its Code of Conduct. The Code also contains principles of conduct for employees of the Holding Company, pursuant to which they neither offer nor accept favours, reject all forms of discrimination, and disclose conflicts of interest between their business and private affairs. Such principles of conduct are in place Group-wide. In addition, all previous divisions have a compliance management system that assists in preventing, detecting and eliminating abuses. At the recently acquired companies ROVEMA and Optimar, the structure of an appropriate compliance system is in planning.

For Haniel as a family-equity company, a solid equity base plays an important role. In addition, Haniel also uses borrowed capital in its financial strategy. To gain the trust of potential investors and to maintain the appreciation of its current investors, Haniel focuses on transparency and fairness in its financial communication: Every capital market participant, including banks, investors and analysts, are provided with the same information needed to assess the Company’s performance. This applies in equal measure to the family shareholders as providers of equity. The corporate website represents a broad information platform where, among other things, the corporate group’s portfolio and strategy are elucidated. Haniel also ­publishes its annual and half year financial reports there, as well as the latest press releases. In addition, presentations, information on the investment ­strategy and additional separate and consolidated subgroup financial statements can be accessed online under the “Creditor Relations” heading. A financial calendar contains early announcements of important events for the Holding Company and the divisions. Moreover, Haniel publicly declares how the Holding Company is rated by the credit rating agencies Standard & Poor’s, Moody’s and Scope. Haniel submits itself to external ratings voluntarily in order to be able to use all the available financing options. For Haniel, transparent and fair financial communication is ­inseparably connected with continuity. The Company ­informs its partners at regular intervals and in a consistent manner about current developments. Thus, financial reports are always published in the customary place and in the customary form in order to make it easier for the reader to find and analyse the information. Haniel draws attention to any deviations from the preceding years.