Good corporate governance forms the foundation for responsible management. The Executive Board and Supervisory Board are keen to bring the management and supervision of the Company into line with national and international standards. To achieve this, it is essential that the Executive Board and the Supervisory Board communicate efficiently by way of open and transparent corporate communication.
The declaration on management pursuant to section 289a HGB contains a Statement of Compliance with the recommendations of the German Corporate Governance Code, as well as further information on corporate governance practices and a description of the working methods of the Executive and Supervisory Boards.
The reporting elements of the management declaration in accordance with section 289a HGB are also avai-lable on the website of Bastei Lübbe in the “Investor Relations” section.
Statement of conformity
Statement of compliance of the Executive Board and the Supervisory Board of Bastei Lübbe pursuant to section 161 AktG on the recommendations of the “Government Commission on the German Corporate Governance Code”
The Executive Board and Supervisory Board of Bastei Lübbe herewith declare that:
The recommendations of the "Government Commission on the German Corporate Governance Code" pub-lished by the German Federal Ministry of Justice in the Official Part of the Federal Gazette (Bundesanzeiger) on 30 September 2014, in the version dated 24 June 2014, have been complied with and continue to be complied with by Bastei Lübbe with the following exceptions:
Ceiling on amount of compensation of the Executive Board in general and of the variable compo-nent of the compensation (No. 4.2.3 (2) sentence and 4.2.3 (4)):
Contrary to the recommendation in 4.2.3 of the GCGC, the remuneration of Executive Board members, as a whole and with regard to its variable remuneration elements, is not subject to limits on the amount of asset ceilings. Furthermore, no provision is made that payments to Executive Board members in the event of prior termination of their Executive Board mandates must not exceed the value of two annual salaries, including fringe benefits (severance payment cap). The reason for this is that, within the contractual negotiations, and particularly because of the previous management services at the general partner of Bastei Lübbe GmbH &
Co. KG, a ceiling on the amount of variable compensation as well as an agreement on severance payment cap could not be reached. When concluding future contracts with new Executive Board members, Bastei Lübbe intends to place limits on the amount of variable remuneration.
Diversity on the Executive Board (No. 5.1.2 (1) sentence 2)
When appointing members of the Executive Board, the Supervisory Board takes into consideration not only that the appointed members meet the personal and professional requirements and those with regard to experience that are necessary to exercise the office. Efforts are also made to ensure that the Executive Board is characterised by a diversity in opinion and experience amongst its members. The aspect that women should also be appropria-tely represented on such boards should be particularly considered when applicants are being selected.
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Information on corporate governance practices
Bastei Lübbe also voluntarily complies with the non-obligatory suggestions of the Code, subject only to the following exceptions:
The suggestions contained in No. 2.3.3 of the Code (option of following the Annual General Meeting via modern communication media (e.g. the Internet)) have not been implemented.
It is also suggested under No. 5.1.2 that the initial appointment term of five years for new Executive Board members should not be the rule. The Executive Board members of Bastei Lübbe have been appointed for five years. The reason for this is that a shorter appointment term was not achievable in the framework of negotiations, particularly given that previous management services had been provided to the general partner of Bastei Lübbe GmbH & Co. When appointing Executive Board members in future, it will be verified whether a shorter appointment term is expedient.
Working methods of the Executive and Supervisory Boards
As a German public limited company, Bastei Lübbe is subject to German company law, and therefore pos-sesses a dual management and control structure made up of an Executive Board and a Supervisory Board.
The tasks, competences and responsibilities of both of these bodies are clearly regulated by the law and separated in terms of personnel.
For Bastei Lübbe, the basic principle for responsible corporate governance is to guarantee that the Executive Board and Supervisory Board cooperate efficiently by way of responsible, transparent corporate governance and control structure. Thus a large number of issues were discussed in detail between the Executive Board and Supervisory Board in the 2014/15 financial year. The Supervisory Board regularly and carefully monitored the work of the Executive Board and continually supported it in an advisory capacity.
The Supervisory Board was always involved in all decisions in a timely and appropriate fashion. The Executive Board kept it informed, in written or oral form, on a regular basis and in a timely and comprehensive fashion about the performance of the business, earnings and financial position and employment situation and per-sonnel policy, as well as of the short- and long-term corporate and financial plans, and of the further strategic development of the Company and of its shareholdings. Any deviations from the plans were fully explained to the Supervisory Board. The risk situation and risk management were always carefully taken into account in this process. The Chair of the Supervisory Board was also in contact with the Executive Board or Chair of the Exe-cutive Board outside of regularly-scheduled meetings, discussing major events and pending decisions.
Allocation of responsibilities and working methods of the Executive Board
The Executive Board of Bastei Lübbe manages the Company with the aim of creating long-term growth under its own responsibility and in the interest of the Company, thus taking into account the interests of shareholders, of its employees and of other groups that are affiliated with the Company. The Executive Board therefore operates without instructions from third parties and in accordance with the law, the Articles of Association and the rules of procedure for the Executive Board issued by the Supervisory Board, as well as taking into consideration resolutions adopted in Annual General Meetings. When hiring new managerial staff in the Company, the Executive Board of Bastei Lübbe also takes diversity into account and aims in particular to give appropriate consideration to women.
Notwithstanding the principle of joint responsibility, according to which all members of the Executive Board
are jointly responsible for the management of the Company, every member of the Executive Board heads the department allocated to him/her under his/her own responsibility and has sole executive powers in the area of responsibility assigned to him/her. All members are therefore entitled to present envisaged issues to the entire Executive Board in order that they be resolved upon.
However, all issues that have been assigned to the entire Executive Board by law are dealt with and resolved on jointly by all members. The members of the Executive Board take all fundamental decisions on business policies and strategy in close cooperation with the Supervisory Board. With this in mind, the Executive Board informs the Supervisory Board on all issues and priority topics that are relevant to the Company as a whole. The corres-ponding information and reporting requirements of the Executive Board are determined in detail by the Supervi-sory Board in the Executive Board’s rules of procedure. The Chair of the Executive Board is responsible for the overall management and business policies of the Company. He ensures that coordinated and unified business management is achieved on the Executive Board, and represents the Company in public.
The Executive Board of Bastei Lübbe meets once a week as a rule. In the 2014/15 financial year it is made up of Mr Thomas Schierack, who as Chair is responsible for commercial management as well as for the seg-ments law, investor relations, personnel, IT and the novel booklet and puzzle magazines segment; Mr Klaus Kluge, who is responsible for sales and marketing and for “non-books”, “merchandising” and “gift books”; Mr Felix Rudloff, who is responsible for programme and PR; and Mr Jörg Plathner, who has been responsible for the entertainment (digital media) section since September 2014. Thomas Schierack, Klaus Kluge and Felix Rudloff were appointed to the Executive Board on 9 July 2013 for a term of five years, thus until 8 July 2018.
Jörg Plathner was appointed on 1 September 2014, also for a term of 5 years, that is until 31 August 2019.
Working methods of the Supervisory Board
The Supervisory Board is charged with advising and monitoring the Executive Board in its management of the Company. Given that important Company decisions require the approval of the Supervisory Board, it is involved in any decisions that are fundamental for the Company. The Company’s Articles of Association and the Supervisory Board’s rules of procedure contain comprehensive guidelines for the work of the Supervisory Board.
The Supervisory Board of Bastei Lübbe is made up of three members. In making nominations for the election of Supervisory Board members, particular attention is paid to the necessary knowledge, skills and experien-ce in the industry required to undertake these duties. This ensures that Supervisory Board members possess highly-effective corporate governance skills and can appropriately advise the Executive Board on strategic orientation.
The Supervisory Board included three shareholder representatives in the 2014/15 fiscal year.
Its members are
1. Dr. Friedrich Wehrle (Chair of the Supervisory Board and signatory), 2. Prof. Dr. Michael Nelles and
3. Prof. Dr. Gordian Hasselblatt.
Dr. Friedrich Wehrle, Prof. Dr. Michael Nelles and Prof. Dr. Gordian Hasselblatt were appointed to the Super-visory Board of Bastei Lübbe by resolution of the founders of Bastei Lübbe until the conclusion of the Annual General Meeting which will discharge the Supervisory Board for the financial year ending 31 March 2018.
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Dr. Wehrle was appointed as Chair in the first constituent meeting of the Supervisory Board.
The Chair of the Supervisory Board coordinates the work of the Supervisory Board, conducts its meetings and upholds the interests and representation of the Board vis-à-vis third parties. He is in constant and regular contact with the Executive Board, particularly with the Chair, including outside meetings, and discusses major events and pending decisions affecting the Company. No members of the Bastei Lübbe Supervisory Board are former members of the Executive Board.
The German Corporate Governance Code recommends that Supervisory Boards form qualified commit-tees. Given the unavoidable personal identity of committee and Supervisory Board members inherent in a three-member supervisory body, the Supervisory Board of Bastei Lübbe has not currently formed any com-mittees. The members of the body are thus jointly responsible for all issues to be resolved on. If the Supervi-sory Board is enlarged in future, a decision will be made with regard to the formation of committees.
Avoidance of conflicts of interest
No conflicts of interest arose in the previous financial year between members of the Executive Board and the Supervisory Board of Bastei Lübbe that would have needed to be disclosed to the Supervisory Board without delay. No Executive Board members were members of a Supervisory Board of non-affiliated trading companies.
Transparency
Our aim at Bastei Lübbe is to guarantee the highest levels of transparency and to make the same information available to all target groups at the same time. All our target groups can find out more about current Compa-ny developments on the Internet. Ad-hoc CompaCompa-ny notifications are published on the Bastei Lübbe website.
Press releases and other Company news are also made available here. The current as well as all previous Statements of Compliance with the German Corporate Governance Code will also be made available on the Company website.
Pursuant to section 15a WpHG, members of the Executive Board and Supervisory Board of Bastei Lübbe as well as certain managerial employees and closely associated persons must disclose the acquisition and sale of Company shares and related financial instruments.
All directors’ dealings pursuant to section 15a WpHG are published on the Company website at https://www.luebbe.
com/en/investor-relations/corporate-governance/directors-dealings.
Financial accounting and auditing
The annual financial statements of Bastei Lübbe as well as the interim reports conform to International Finan-cial Reporting Standards (IFRS) pursuant to the provisions of the International Accounting Standards Board.
At the general meeting held on 17 June 2014, KPMG AG Wirtschaftsprüfungsgesellschaft, Cologne, was chosen as auditor for the financial year 2014/15.
Cologne, May 2015
For the Supervisory Board For the Executive Board
Dr. Friedrich Wehrle Thomas Schierack
Chair Chair