Public Corporate Governance Codex (PCGC)

FIZ Karlsruhe – Leibniz Institute for Information Infrastructure

Public Corporate Governance Report 2010

October 24, 2011

FIZ Karlsruhe is a not-for-profit organization with the mission1 to make sci-tech information publicly available and to provide related services in order to support the national and international transfer of knowledge and the promotion of innovation.

FIZ Karlsruhe is a member of the Leibniz Association (WGL) which consists of German scientific institutions2 that are jointly funded by the German Federal Government and the Federal States.

On July 1, 2009, the German Federal Government passed the Principles of Good Corporate Governance for Indirect or Direct Holdings of the Federation. The core of the recommendations outlined therein is the Public Corporate Governance Code (PCGC), Part A "Public Corporate Governance Code of the Federation" which contains essential statutory regulations as well as nationally and internationally recognized principles of good corporate governance. Compliance with the PCGC is obligatory for corporations in which the Federation owns a majority interest but also recommended for corporations over which the Federation is a minority partner (PCGC art. 1.3).

In its 69th meeting held on May 11, 2011, the Supervisory Board of FIZ Karlsruhe decided to implement the PCGC and asked the board of management to prepare a PCGC report for the business year 2010.

FIZ Karlsruhe concerned itself with the PCGC and its recommendations: We consider good and responsible corporate governance that is oriented towards value generation on the long term and complies with national and international standards an essential part of our self-image and a key factor for our success as an enterprise. FIZ Karlsruhe hereby submits the Public Corporate Governance Report 20103.

In accordance with art. 6.1. of the Public Corporate Governance Code, the President & CEO and the Supervisory Board of FIZ Karlsruhe hereby confirm that the recommendations of the PCGC were largely complied with in 2010. Cases where FIZ Karlsruhe proceed differently are explained in the report.

 

1. Management and Supervisory Bodies

1.1 Supervisory Board
Pursuant to art. 10 of the Articles of Association (as per April 28, 2009), the Supervisory Board consists of 16 members. The Federal Republic of Germany in its function as a shareholder delegates the chairperson and three more members. The Federal States delegate the deputy chairperson and three more members. Additional members of the Supervisory board are: five representatives of the other shareholders, one member of the Scientific Advisory Board and two members from FIZ Karlsruhe's scientific or technical staff. At present, in the Supervisory Board one seat of the shareholder Federal Republic of Germany is vacant. Three of the 15 Supervisory Board members, i.e., 20 %, are women. If new members are appointed, not only professional qualification but also equal opportunities for women have to be considered.

1.2 President & CEO
The company has a President & CEO who is authorized to act as the company's sole representative. This corresponds to the permissible lower limit as per art. 14, para. 1 of the Articles of Association. The President & CEO is supported by the Senior Management Team which consists of the Vice Presidents (division directors). Two Vice Presidents are Prokuristen (authorized signatories). This arrangement has proven successful in our business operations.

1.3 Collaboration of shareholders, Supervisory Board, and the President & CEO

Shareholders, Supervisory Board, and the President & CEO collaborate closely and trustfully in fulfilling their tasks for the benefit of FIZ Karlsruhe.

The President & CEO ensures that shareholders and Supervisory Board are informed regularly, comprehensively and in a timely manner about all relevant topics, in particular strategy, business development, risk management and current risks.


2. Financial accounting, audit of the annual financial statement

The annual financial statement and the report on the economic status of the FIZ Karlsruhe GmbH are prepared and examined in accordance with the provisions of the HGB (German Commercial Code) for large companies. The annual financial statement certified by the auditor is examined by the Supervisory Board. Upon recommendation by the Supervisory Board, the shareholders' meeting approves of the annual financial statement.

At present, the procedure for approval and disclosure of the annual financial statements follows the general standard for corporations according to which the annual financial statement has to be published within 12 months after completion of the business year (art. 325 para. 1 clause 2 HGB - German Commercial Code). Up to now, the period for approval of the annual financial statement by the shareholders' meeting, i.e., approval within 8 months from completion of the business year (art. 42a para. 2 GmbHG), has not been observed. However, the Supervisory Board committee that prepares the decisions of the Supervisory Board and the shareholders' meeting regarding the annual financial statement generally deals with the annual financial statement within 8 months.


3. Remuneration

3.1 Supervisory Board
The members of the Supervisory Board are not entitled to any remuneration or attendance money (art. 10 of the Articles of Association). They are only entitled to a refund of a reasonable amount of travel and other expenses incurred in connection with carrying out the duties of their office, in accordance with the rules for federal employees.

3.2 President & CEO
Publishing the salary of the President & CEO is not part of the employment contract, which was concluded before the Public Corporate Governance Code came into effect. Thus, for privacy reasons, they will not be published (art. 286 para. 4 HGB - German Commercial Code).


4.  Revision of the Articles of Association
Although FIZ Karlsruhe follows the recommendations of the PCGC set out in art. 2.3 (preparation and implementation of the general meeting of shareholders), 3.1.1 (collaboration of the management with the Supervisory Board), 3.1.3 (schedule for regular reports), 3.2.1 (confidentiality) and 5.2.3 (regulations governing representation of the Supervisory Board members), compliance with these recommendations has not yet been anchored explicitly in the Articles of Association.

It is planned to incorporate the requirement to comply with the PCGC in the course of the next revision of the Articles of Association. This will also ensure that the stipulations regarding severance payments (art. 4.3.2.), the first appointment of members of the board of management (art. 5.1.2), the appointment of new Supervisory Board members (art. 5.2.1), the participation in Supervisory Board meetings (art. 5.2.3), and examining the PCGC report within the scope of the audit of the annual financial statement (art. 7.2.3) will become applicable.

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1

Articles of Association, art. 2 (1)

2

Based on the  "Ausführungsvereinbarung zum GWK-Abkommen über die gemeinsame Förderung der Mitgliedseinrichtungen der Wissenschaftsgemeinschaft Gottfried Wilhelm Leibniz e. V. (AV WGL)" dated October 27, 2008.

3

The present report refers to the PCGC as of June 30, 2009.