Source: http://report2016.puma-annual-report.com/en/group-management-report/corporate-governance-report/
Timestamp: 2018-06-19 02:40:20
Document Index: 739875337

Matched Legal Cases: ['Art. 9', 'Art. 9', '§ 161', 'Art. 9', 'Art. 43', 'Art. 9']

Corporate Governance Report – PUMA Annual Report
Effective implementation of the principles of corporate governance is an important aspect of PUMA‘s corporate policy. Transparent and responsible corporate governance is a key prerequisite for achieving corporate targets and for increasing the Company’s value in a sustainable manner. The Administrative Board and the Managing Directors work closely with each other in the interests of the entire Company to ensure that the Company is managed and monitored in an efficient way that will ensure sustainable added value through good corporate governance. In the following the Administrative Board and the Managing Directors report on the corporate governance at PUMA SE in accordance with Section 3.10 of the German Corporate Governance Code. This section also includes the Statement of Compliance in accordance with Art. 9(1)c(ii) of the SE Regulation (SE-VO) and Section 22(6) of the German SE Implementation Act (SEAG), in conjunction with Section 289a and Section 315(5) HGB.
Under Art. 9(1)c(ii) of the SE Regulation (SE-VO) and Section 22(6) of the German SE Implementation Act (SEAG), in conjunction with § 161 AktG the Administrative Board of a listed German SE is required to issue a statement at least once a year stating whether the German Corporate Governance Code has been and is being observed and which of the Code’s recommendations have not been or are not being applied and why. The Administrative Board of PUMA SE issued the following statement of compliance on November 9, 2016:
Statement of Compliance pursuant to Section 161 AktG for 2016
Pursuant to Art. 9(1)c(ii) of the SE Regulation (SE-VO) and Section 22(6) of the German SE Implementation Act (SEAG), in conjunction with Section 161 AktG, PUMA SE‘s Administrative Board declares that PUMA SE has been and is in compliance with recommendations issued by the „Government Commission on the German Corporate Governance Code“ (the „Code“) (in the versions dated June 24, 2014 and May 5, 2015) since the last Statement of Compliance of November 2014 in consideration of the particulars of PUMA SE‘s single-tier system described under item 1 with the exceptions mentioned under item 2, and where it is not in compliance, explains why not.
1st Particulars of the Single-Tier Corporate Governance System
According to Art. 43 – 45 SE-VO, in conjunction with Sections 20 et seqq. SEAG, under the single-tier system, management of the SE is the responsibility of a single company organ, the Administrative Board (see Para. 7 of the Code’s Preamble). The Administrative Board manages the Company, determines the Company’s basic business strategies and monitors the implementation of said strategies by the Managing Directors. The Managing Directors manage the Company’s business, represent the Company in and out of court, and are bound by instructions from the Administrative Board.
Basically, PUMA SE takes those parts of the Code that apply to the Supervisory Board and applies them to the Administrative Board and takes those parts of the Code that used to apply to the Board of Management and applies them to its Managing Directors. The following exceptions apply with respect to the legal framework for the single-tier system:
In derogation of No. 2.2.1 p.1 of the Code, the Administrative Board must submit the annual financial statements and the consolidated financial statements to the Annual General Meeting (Section 48(2) p. 2 SEAG).
In derogation of Nos. 2.3.1 p. 1 and 3.7(3) of the Code, the Administrative Board is responsible for convening the Annual General Meeting (Sections 48 and 22(2) SEAG).
The duties of the Board of Management listed in Sections 4.1.1 (Corporate Governance), and 4.1.2 in conjunction with 3.2 half-sentence 1 (Development of the Company’s Strategic Orientation) of the Code are the responsibility of the Administrative Board (Section 22(1) SEAG).
The powers of the Board of Management governed by Sections 2.3.2(2) (Proxy Bound by Instructions), 3.7(1) (Statement on a Takeover Bid) and 3.7(2) (Conduct during a Takeover Bid), as well as 3.10 (Corporate Governance Report), 4.1.3 (Compliance) and 4.1.4 (Risk Management and Controlling) of the Code are the responsibility of PUMA SE‘s Administrative Board (Section 22(6) SEAG).
In derogation of Nos. 5.1.2(2)(1 and 2) of the Code, Managing Directors, unlike members of the Board of Management, are not subject to a fixed, maximum term of appointment (Section 40(1)(1) SEAG).
In derogation of Nos. 5.4.2 p. 2 and 5.4.4 of the Code, members of the Administrative Board may be appointed as Managing Directors, provided that the majority of the Administrative Board continues to consist of non-executive Managing Directors (Section 40(1) p. 2 SEAG).
2nd Exceptions to the Code’s recommendations
In derogation of No. 3.8(3) of the Code, members of the Administrative Board are provided with D&O insurance with no deductible. The Administrative Board feels that it can dispense with a deductible for members of the Administrative Board, because the D&O insurance is group insurance for people in Germany and abroad, and a deductible is fairly unusual abroad.
In derogation of No. 4.2.3(2)(6) of the Code, the compensation of the Managing Directors does not show the maximum amount limits in total or their variable compensation components. The employment contracts of the Managing Directors were concluded in accordance with the current version of the Code and are deemed to be proper and correct by PUMA SE.
In derogation of No. 4.2.3(5) of the Code, no limits on severance payments for premature termination as a Managing Director due to a change of control have been agreed to, because an agreement drawn up in advance would not be able to take into account the specific situation that gave rise to a premature termination or the other circumstances of the individual case of termination.
In accordance with the authorization by the Annual General Meeting on May 7, 2013, pursuant to Section 286(5) HGB, the Company shall not publish the amounts of compensation for individual Managing Directors until the authorization expires (Sections 4.2.4 and 4.2.5 of the Code). The Managing Directors shall adhere to the authorization when they prepare the annual financial statements. Based on the authorization of the Annual General Meeting, and in derogation of No. 4.2.5(3) of the Code, the information stated in this Section regarding the compensation of the Managing Directors is not included in the Compensation Report.
In derogation of No. 5.4.6(2) page 2 of the Code, members of the Administrative Board receive performance-based compensation that is not linked to the sustainable success of the Company. The compensation was authorized by the Annual General Meeting on April 14, 2011; it is stipulated in the Articles of Association and is deemed to be proper and correct by PUMA SE.
Deviating from Section 5.4.6(3) of the Code, the compensation of the Administrative Board members is not shown individually. In the opinion of PUMA SE, this additional information is not relevant to the capital market, as the respective remuneration regulations are in the public domain in the Articles of Association.
Herzogenaurach, November 9, 2016
On behalf of the Administrative Board
Jean François Palus
Relevant disclosures of corporate governance practices that are applied beyond the regulatory requirements
In order to fulfill our responsibility as a global sporting goods manufacturer, PUMA has developed guidelines on environmental management and on compliance with workplace and social standards (see http://about.PUMA.com under “SUSTAINABILITY”). The PUMA Code of Conduct and the PUMA Code of Ethics (see http://about.PUMA.com under „SUSTAINABILITY“) prescribe ethical and environmental standards with which both employees in the entire PUMA Group and suppliers are required to comply. The PUMA Code of Conduct was revised in 2016 and explicitly addresses PUMA‘s obligation and commitment in respect of human rights and combating corruption.
Compliance with laws and internal regulations and values are of key importance for PUMA’s corporate governance. For this reason, a revised version of the PUMA Code of Ethics (http://about.puma.com/de/nachhaltigkeit/standards/coe) was communicated company-wide in 2014. The communication of the PUMA Code of Ethics was made directly by the CEO of PUMA SE. To further reduce the risk of misconduct, the Code of Ethics is accompanied by guidelines governing selected risk areas in detail. Risk-based classroom training sessions in the areas of corruption and antitrust were also conducted.
In 2016, the CEO of PUMA SE expected all PUMA employees to complete an ethics e-learning training course. The focal points of the training course this year were: combating corruption, conduct in the workplace, confidentiality of business information, and environmental protection. In total, 97% of PUMA employees completed the ethics e-learning program in 2016.
The establishment and monitoring of the Group‘s compliance structure is carried out by the PUMA SE Risk & Compliance Committee. This consists of a specified group of executives, including PUMA SE‘s Managing Directors. The regular meetings of the Committee include the analysis of compliance risks and the establishment and approval of appropriate measures (guidelines, training courses, etc.). The Audit Committee of the Administrative Board of PUMA SE is informed regularly as to the status of the compliance structure implementation.
The employees of PUMA have access to a Group-wide integrity hotline for reporting unethical, unlawful and criminal activity.
Description of the working practices of the Administrative Board and the Managing Directors and the composition and working practices of their committees
PUMA SE has a single-tier management and control structure. According to Articles 43 – 45 SE-VO, in conjunction with Sections 20 et seqq. SEAG, under the single-tier system, management of the SE is the responsibility of a single body, the Administrative Board. The Managing Directors manage the Company’s daily business. Another corporate body is the Annual General Meeting.
The Administrative Board of PUMA SE manages the Company, determines the Company’s basic business strategies and monitors the implementation of said strategies by the Managing Directors. It appoints and dismisses the Managing Directors, decides on the compensation system and establishes the compensation. In accordance with the Articles of Association, the Administrative Board consists of at least three members. At least one independent member of the Administrative Board must have expertise in the areas of finance, accounting or auditing. The members of the Administrative Board are appointed by the Annual General Meeting, a third of them pursuant to the German Codetermination Act based on binding nominations by employee representatives. The members of the Administrative Board are appointed for a period up to the close of the Annual General Meeting that adopts the resolution approving the actions of the Board for the fourth financial year after the term of office began (the financial year in which the term of office begins is not counted) and no later than six years after the respective Administrative Board member was appointed. Administrative Board members may be reappointed.
In 2016 the Administrative Board consisted – almost continuously – of nine members. Only in the period between Ms. Belén Essioux-Trujillo’s resignation on April 11, 2016 and the election of Ms. Béatrice Lazat by the Annual General Meeting on May 4, 2016 there were eight members of the Administrative Board. The regular period of office of all members of the Administrative Board ends at the close of the Annual General Meeting in 2017. Details of the members of the Administrative Board can be found in the Notes to the Consolidated Financial Statements (last chapter).
Meetings of the Administrative Board must be held at least every three months. Meetings must also be held if required for the Company’s well-being or if a member of the Administrative Board demands that a meeting be convened. The Administrative Board held four regular meetings in 2016.
The Administrative Board has established five committees to perform its duties and receives regular reports on their work. The principles of cooperation of the Administrative Board of PUMA SE and the duties of the committees are set out in the Rules of Procedure for the Administrative Board, which can be viewed at http://about.PUMA.com under „Corporate Governance“.
The Executive Committee consists of three members. It is responsible for organizing meetings of the Administrative Board and for making decisions when instructed by the Administrative Board to do so on its behalf.
The Personnel Committee consists of three members. The Personnel Committee is responsible for entering into and making changes to Managing Directors’ employment contracts and for establishing policies for Human Resources and personnel development. The entire Administrative Board decides on issues involving the Managing Directors’ compensation based on recommendations from the Personnel Committee.
The Audit Committee consists of three members. The Chairman of the Audit Committee must be an independent shareholder representative and must have expertise in the fields of accounting and auditing in accordance with Section 100(5) AktG. In particular, the Audit Committee is responsible for accounting issues and monitoring the accounting process, the effectiveness of the internal control system, the risk management system, internal audits, compliance and the statutory audit of the financial statements, with particular regard to the required independence of the statutory auditors, issuing the audit mandate to the statutory auditors, defining the audit areas of focus, any additional services to be performed by the auditors and the fee agreement. The recommendation of the Administrative Board on the selection of the statutory auditors must be based on a corresponding recommendation by the Audit Committee. Once the Annual General Meeting has appointed the statutory auditors, and the Administrative Board has issued the audit assignment, the Audit Committee shall work with the statutory auditors to specify the scope of the audit and the audit areas of focus. The statutory auditors shall attend the meeting to review the annual financial statements and the consolidated financial statements and shall report on the key findings of their audit. They shall also inform the Committee about other services they have provided in addition to auditing services and shall confirm their independence. Each month, the Audit Committee shall receive financial data on the PUMA Group, which will allow the tracking of developments in net assets, financial position, results of operations and the order books on a continual basis. The Audit Committee shall also deal with issues relating to the balance sheet and income statement and shall discuss these with Management. In addition, when the internal audit projects are completed, the Audit Committee shall receive the audit reports, which must also include any actions taken.
The Sustainability Committee consists of three members and is responsible for promoting business sustainability as well as awareness of the need to act fairly, honestly, positively and creatively in every decision made and every action taken.
The Nominating Committee has three members, who may only be representatives of the shareholders on the Administrative Board. The Nominating Committee proposes suitable shareholder candidates to the Administrative Board for its voting recommendations to the Annual General Meeting.
The current composition of the committees can be found in the Notes to the Consolidated Financial Statements (last chapter).
The Managing Directors manage the Company’s business with the goal of creating sustainable value with shared responsibility. They implement the guidelines and targets issued by the Administrative Board. The Board currently consists of three members and has a chairman. The Managing Directors inform the Administrative Board regularly, comprehensively, and in a timely manner regarding all company-related issues with respect to planning, business development, the risk situation, risk management and compliance. They provide details on and reasons for deviations of business performance from established plans and objectives.
The Managing Directors are required to disclose conflicts of interest to the Administrative Board immediately and inform the other Managing Directors about any such conflicts. They are permitted to carry out additional activities, especially Supervisory Board or similar mandates outside the PUMA Group, only with the prior approval of the Administrative Board. In the past year, Managing Directors of PUMA SE had no conflicts of interest.
The principles of cooperation of the Managing Directors of PUMA SE are laid down in the Rules of Procedure for the Managing Directors, which can be viewed at http://about.PUMA.com under „Corporate Governance“.
Objectives for the composition of the Administrative Board
The members of the Administrative Board as a group possess the appropriate knowledge, skills and professional experience necessary for the proper fulfillment of their duties. Relevant qualifications, in compliance with diversity and appropriate involvement of women, are the key factors for the composition of the Administrative Board. Based on Section 5.4.1 of the Code, the Administrative Board has set targets for his composition that have been fulfilled. In detail:
• The members of the Administrative Board as a group have the experience and knowledge in the field of management and/or monitoring market-oriented companies as well as in the business segments and sales markets of PUMA.
• A sufficient number of members have strong international backgrounds.
• Including the employees‘ representative on the Administrative Board, the Administrative Board has an appropriate number of independent members.
• The Chairman of the Audit Committee has specialist knowledge and experience in the application of accounting principles and internal control procedures and is independent.
• The members have sufficient time to perform his/her mandate in the Administrative Board.
• The Administrative Board prevents potential significant and not only temporary conflicts of interest of its members by regularly monitoring and critically scrutinizing its members‘ other activities.
• According to Section 1(4) of the Rules of Procedure for the Administrative Board, Administrative Board members may, in principle, not be over 70 years of age and their maximum term of office may not exceed three terms.
Regarding its target to reach a women’s proportion of 30% the Administrative Board has set an implementation deadline until June 30, 2017.
Members of PUMA SE‘s Administrative Board, its Managing Directors and senior staff have the opportunity to attend appropriate training and continuing education programs.
Commitments to promote the participation of women in management positions in accordance with Art. 9(1)c(ii) of the SE Regulation (SE-VO) and Section 22(6) of the German SE Implementation Act (SEAG) in connection Section 76(4), Section 111(5) AktG
The targets for the proportion of women on the Administrative Board, at the level of the Managing Directors and the two management levels below the Managing Directors were set on time by September 30, 2015.
For the Administrative Board of PUMA SE a target of 30 % women was set and for the level of the Managing Directors a target of 20 %, on the condition that PUMA SE has five or more Managing Directors. The Administrative Board adopted targets of 20% for the first management level and 30 % for the second management level.
All implementation deadlines initially run until June 30, 2017.
In the future, the inclusion of women among the Managing Directors shall be guaranteed in the event of a new appointment, in particular by giving special consideration to women from among several equally qualified applicants. If a position must be filled by outside candidates, special care should be taken to consider properly qualified female candidates. The same applies when filling management positions. In order to include even more women in management positions in the future, PUMA SE is using part-time and half-day models, as well as flexible working hours and the provision of more childcare places to promote a better balance between work and family life.
In the reporting year, the Managing Directors and the members of the Administrative Board have acquired no PUMA shares. No sales were reported to us.
Shareholdings of the Administrative Board and the Managing Directors
According to the notification dated August 3, 2011 pursuant to Sections 21 and 22 of the German Securities Trading Act (WpHG), on this date Messrs. François-Henri Joseph Pinault (Administrative Board member) and François Jean-Henri Pinault indirectly held 75.12 % (11,330,446 voting rights) of the voting rights in PUMA SE, of which 1.15 % of the voting rights (173,377 voting rights) were treasury shares of PUMA SE.
Regarding the Affirmation pursuant to Section 315(1)(6) of the German Commercial Code (HGB) (Responsibility Statement/Bilanzeid), please refer to the Notes.