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Corporate Governance Declaration

Corporate Governance Declaration

Corporate Governance Declaration in Accordance with section 289f of the Handelsgesetzbuch (HGB – German Commercial Code)

DECLARATION OF COMPLIANCE IN ACCORDANCE WITH SECTION 161 OF THE AKTIENGESETZ (AKTG – GERMAN STOCK CORPORATION ACT)

The Management Board and the Supervisory Board of TOM TAILOR Holding SE submitted a declaration of compliance in accordance with section 161 AktG in December 2019.

Text of the Declaration by the Management Board and the Supervisory Board of TOM TAILOR Holding SE on the German Corporate Governance Code in Accordance with Section 161 AktG (Declaration of Compliance)

TOM TAILOR Holding SE, Hamburg
ISIN: DE000A0STST2

Since submitting its most recent Declaration of Compliance in October 2019, TOM TAILOR Holding AG has complied with the recommendations of the Government Commission on the German Corporate Governance Code published by the Federal Ministry of Justice in the Federal Gazette, most recently in the version dated 7 February 2017, with the exception of section 4.1.3 sentence 2 (compliance management system), section 4.2.3 (remuneration of Management Board members), (section 5.4.1 (2) sentence 1, (4) sentence 1 (profile of skills of the Supervisory Board), section 5.4.6 (1) sentence 2 (remuneration of Supervisory Board members), and section 7.1.2 sentence 3 (financial statements):

  1. In April 2017, the Management Board began developing and introducing a specific Group-wide compliance management system within the meaning of section 4.1.3 sentence 2 of the German Corporate Governance Code (GCGC). This system provides the framework for taking suitable measures aligned with the Company’s risk situation to ensure that all statutory provisions and internal corporate guidelines are observed. This compliance management system was further expanded in 2019 again, with data privacy compliance remaining a focal point.
  1. The financial agreements reached with Dr Lenz and Mr Werner may differ from the requirements set out in section 4.2.3 (2) sentence 3 of the German Corporate Governance Code. Although the monetary remuneration elements comprise both fixed and variable components, the variable remuneration components are not measured on the basis of a forward-looking multi-year assessment, with a few exceptions. Instead, they are each tied to the achievement of financial targets for the years 2019, 2020 and 2021 as set out in the restructuring plan for the Group. However, it has been contractually agreed that once the restructuring plan has been implemented no later than 1 January 2022, this calculation basis will be replaced by criteria that fully meet the requirements of section 4.2.3 (2) sentence 3 of the German Corporate Governance Code. Until this point, the restructuring of the Group takes top priority in the view of the Supervisory Board.
  1. In the Supervisory Board’s assessment, its members possess all of the skills and expertise required for the Supervisory Board’s activities to be conducted efficiently. Hence, the Supervisory Board does not consider it necessary at this time to write up a special profile of skills and expertise as stipulated in the GCGC recommendation in section 5.4.1 (2) sentence 1. The candidates proposed by the Supervisory Board to the Annual General Meeting therefore cannot – as stipulated in section 5.4.1 (4) sentence 1 of the GCGC – aim to fill out a special profile of skills and expertise, and the status of implementation is not published in the Corporate Governance Statement as recommended in section 5.4.1 (4) sentence 2 of the GCGC.
  1. In a departure from the recommendation in section 5.4.6 (1) sentence 2 of the GCGC, the position of deputy chairman is not considered in the remuneration of the Supervisory Board members, since the deputy chairman does not currently fulfil any additional duties that would result in a greater burden on the deputy chairman than on a regular member of the Supervisory Board.
  1. In a departure from section 7.1.2 sentence 3 GCGC, the consolidated financial statements and Group management report were not made publicly accessible within 90 days of the end of the financial year. This was due to the additional organisational demand and time required for the capital increase carried out in February and the ongoing negotiations between the Company, the syndicate banks and the major shareholder Fosun regarding a final financing structure. The Management Board plans to meet the deadlines going forward.

TOM TAILOR Holding SE intends to comply with the recommendations of the German Corporate Governance Code in future as well – with the exception of the deviations listed above.

Hamburg, December 2019

This Declaration of Compliance and all previous Declarations of Compliance are published on TOM TAILOR Holding SE’s website at http://ir.tom-tailor-group.com.


DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES

RESPONSIBLE CORPORATE GOVERNANCE

TOM TAILOR Holding SE is the management holding company and parent of the TOM TAILOR Group. The various TOM TAILOR Holding SE subsidiaries conduct the operating business (the subsidiaries and TOM TAILOR Holding SE are also referred to jointly as “TOM TAILOR” or the “TOM TAILOR Group”). TOM TAILOR Holding SE and its governing bodies are committed to good, responsible corporate governance. This philosophy is shared by the entire TOM TAILOR Group.

In addition to compliance with these principles of good corporate governance, company specific guidelines and standards also contribute to good, sustainable business performance at TOM TAILOR.

WORKING PRACTICES OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD

TOM TAILOR Holding SE is a stock corporation established in accordance with European law. The legal framework for corporate governance is therefore provided by the provisions of Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for a European company (SE) and by German stock corporation law, particularly the provisions governing the Management Board and the Supervisory Board.

MANAGEMENT BOARD

The Management Board conducts TOM TAILOR Holding SE’s business and represents the Company in dealings with third parties. It manages the Company on its own responsibility and in the Company’s best interests with the aim of ensuring sustained value creation. The Management Board develops the corporate strategy, and manages and supervises its implementation. In addition, it ensures that all statutory provisions and applicable internal corporate guidelines are observed (compliance). The Management Board has also implemented an internal control and risk management system. This is an integral part of its business processes and a key element in corporate decisions. The planning system, internal reporting and risk reporting are key components of this.

The Supervisory Board has adopted by-laws for the Management Board, which set out the transactions and measures for which a resolution by the full Management Board is required, as well as the principles for decision-making within the Management Board as a whole. In addition, the Supervisory Board has listed a catalogue of transactions in the by-laws that may only be performed with the approval of the Supervisory Board. These include transactions and measures that have a material effect on the net assets, financial position and results of operations of the TOM TAILOR Group. As part of the implementation of the provisions of the by-laws, the full Management Board has adopted a schedule of responsibilities that assigns responsibility for specific areas of activity to individual members of the Management Board, without this affecting the overall responsibility of the Management Board.

The Management Board had the following members in the 2019 financial year:

  • Chairman of the Management Board (Chief Executive Officer/CEO): Dr Heiko Schäfer (until 31 October 2019); Dr Gernot Lenz (from 1 November 2019)
  • Chief Financial Officer (CFO): Thomas Dressendörfer (until 31 October 2019); Christian Werner (from 1 November 2019)
  • Chief Operating Officer (COO) Liam Devoy
  • Management Board member for BONITA: Karsten Oberheide

The members cooperate in a collegial manner and inform one another on an ongoing basis about important measures and events within their areas of responsibility. Generally speaking, the Management Board passes resolutions in regular meetings. Resolutions require a simple majority.

The Company’s Management Board therefore comprised the following members as at 31 December 2019; the member of the Management Board were appointed at different times:

Appointment of Management Board Members

 

 

 

 

 

 

First Appointment

 

 

 

Current Appointment

Dr Gernot Lenz

Born in 1974

Chief Executive Officer/CEO

 

 

Since 1 November 2019

 

 

 

Chief Executive Officer

 

 

Until 31 October 2022

 

 

 

Christian Werner

Born in 1976

Chief Financial Officer/CFO

 

Since 1 November 2019

 

 

 

Member of the Management Board

 

 

 

Until 31 October 2022

 

Liam Devoy

Born in 1962

Chief Operating Officer/COO

 

Since 1 August 2017

 

 

 

 

Member of the Management Board

 

 

 

 

Until 31 July 2020

 

 

 

Karsten Oberheide

Born in 1967

Management Board member for BONITA

 

Since 1 January 2019

 

 

Member of the Management Board

 

 

Until 31 December 2021

Dr Gernot Lenz has been Chief Executive Officer (CEO) of TOM TAILOR Holding SE since 1 November 2019 and is responsible for corporate strategy, product, sales, e-commerce, marketing and public relations.

Dr Lenz was most recently CEO of the s.Oliver Group. From January to October 2018, he served as Managing Director for various s.Oliver Group companies. Before that, he held the positions of COO Tommy Hilfiger Global and PVH Europe in Amsterdam, where his responsibilities included the digital transformation, omnichannel strategy and operational management of the European e-commerce business of the Tommy Hilfiger and Calvin Klein brands. While working for PVH Europe, Dr Lenz was Managing Director for several of its group companies from January 2014 to November 2017. Prior to his time with PVH Europe, Dr Lenz was a strategy consultant at Bain & Company.

Between April 2019 and January 2020, Dr Lenz also served as a member of the Board of Directors of Zimmerli Textil AG, Aarburg, Switzerland.

Dr Lenz was born in Reutlingen in 1974. He studied business administration at the Catholic University of Eichstätt-Ingolstadt as well as the Universidad Autónoma de Madrid and received his doctorate in health sciences from the Technische Universität Dresden.

Christian Werner has been Chief Financial Officer (CFO) of TOM TAILOR Holding SE since 1 November 2019 and is responsible for finance and accounting, controlling, investor relations, human resources, internal audit, tax and legal affairs. Mr Werner joined the TOM TAILOR Group in February 2014 and most recently held the position of Vice President Finance. During this time he was responsible for implementing numerous financing and optimisation projects within the Company.

Christian Werner began his professional career as a trainee at Landesbank Baden-Württemberg in Mannheim and worked in senior roles in the Corporate Advisory division of Deutsche Bank as well as at NIBC Bank N.V. He previously spent several years as a management consultant at Arthur Andersen and Ernst & Young.

Mr Werner was born in Alzenau, Lower Franconia, in 1976. He studied business administration at the University of Mannheim and has many years of experience in finance, controlling and auditing.

Liam Devoy has been a member of the Management Board of TOM TAILOR Holding SE since 1 August 2017. As Chief Operating Officer (COO), he is the Management Board member responsible for operations with a focus on purchasing, logistics and IT. His appointment as a Management Board member runs until 31 July 2020.

Liam Devoy has logged more than 20 years of experience in the fashion and sportswear industry. He worked in operations roles for companies including Quicksilver, Marc Jacobs, The Children's Place and Reebok.

Most recently, Liam Devoy was responsible for the strategic focus of the worldwide supply chain of the adidas Group as Vice President Global Supply Chain Strategy. His responsibilities in earlier roles with adidas and Reebok also included setting up the global warehouse network.

Liam Devoy was born in 1962 in Massachusetts/United States. He studied English and Politics at Bridgewater State University.

Karsten Oberheide, born 1967, was appointed as a member of the Management Board with effect from 1 January 2019. He is responsible for the Bonita business.

Mr Oberheide has many years of experience in the fashion industry. He began his professional career as a trainee at Sinn AG before becoming a department head and buyer. After spending time as a managing director for Stuttgart, Neunkirchen and Trier with SinnLeffers GmbH, he became the managing director of SinnLeffers Marken Textil Vertriebs GmbH. Mr Oberheide then worked as a purchasing manager back at SinnLeffers GmbH and was subsequently promoted to managing director for purchasing, marketing, personnel, organisation and, temporarily, sales between January 2007 and July 2013. After the company was acquired by Wöhrl, he was appointed to the Management Board as Director of Purchasing and Marketing from August 2013 to July 2015. Following this, he was Managing Director Retail at Gerry Weber between November 2015 and August 2018 with responsibility for managing sales in the company's own channels.

Karsten Oberheide was born in Gehrden in the district of Hanover in 1967. He studied economics at Carl von Ossietzky University in Oldenburg.

With the exception of the aforementioned duties, the Management Board members of the Company neither hold currently nor held during the past five years any board of directors, management or supervisory board seats or partnerships on comparable boards in Germany or abroad outside of the TOM TAILOR Group.

SUPERVISORY BOARD

The Supervisory Board of TOM TAILOR Holding SE advises and supervises the Management Board in the management of the Company. The Supervisory Board is also responsible for appointing the members of the Management Board, for approving the annual financial statements and the consolidated financial statements, and for engaging the Company’s auditors.

The Management Board and the Supervisory Board of TOM TAILOR Holding SE work together closely and in an atmosphere of mutual trust for the benefit of the Company. The Management Board agrees the Company’s strategic orientation with the Supervisory Board and regularly discusses the status of the strategy’s implementation with it. The Management Board informs the Supervisory Board regularly, promptly and extensively on all issues related to strategy, planning, business development, the risk and opportunity position, the internal control and risk management system and compliance that are relevant for the Company. The Chief Executive Officer also regularly exchanges information with the Chairman of the Supervisory Board between the Supervisory Board meetings.

The Supervisory Board has adopted by-laws for itself. These contain, among other things, detailed procedural rules for its meetings and how they are to be chaired by the Chairman of the Supervisory Board, as well as rules on committee work.

The term of office of two members of the Supervisory Board appointed by the court, Mr Andreas Karpenstein and Mr Michael Chou, concluded at the end of the Company’s Annual General Meeting held on 18 December 2019. Furthermore, Yun (Joann) Cheng resigned from her post as a member of the Supervisory Board effective that same day. The 2019 Annual General Meeting adopted a resolution to extend the term of office of Michael Chou for the period up to the end of the Annual General Meeting for the 2021 financial year, i.e., the regular Annual General Meeting taking place in 2022. The same applies for the term of office of Thomas Heymann, who was elected to the Company’s Supervisory Board to succeed Andreas Karpenstein, and Zhen Huang, who is the successor to Yun (Joann) Cheng.

Accordingly, the Supervisory Board of the Company is composed of the following members as at 31 December 2019:

The shareholder representatives are Dr Junyang (Jenny) Shao (Chairwoman of the Supervisory Board), Otmar Debald, Thomas Heymann, Zhen Huang and Michael Chou.

The employee representatives on the Supervisory Board are Barbara Pfeiffer (Deputy Chairwoman of the Supervisory Board), Stefanie Branahl, Kitty Cleijne-Wouters, Sven Terpe and Oliver Kerinnes.

As a general rule, their term of office is for a period of five years.

Dr Junyang (Jenny) Shao (Chairwoman of the Supervisory Board)

Vice President of the Fosun Fashion Group, Shanghai/China

Born in 1981, Dr Junyang (Jenny) Shao currently holds the position of Vice President at the Fosun Fashion Group. She has many years of experience working at various management consulting firms. From 2012 to 2016, she was a Director at Acxit Capital Partners in Frankfurt/Main and prior to that a Senior Consultant at PwC in Düsseldorf from 2011 to 2012.

Dr Junyang (Jenny) Shao studied business administration at Georg August University in Göttingen from 2001 to 2005. From 2006 to 2009, she subsequently completed post-graduate studies at the Supply Management Institute of EBS University of Business and Law in Oestrich-Winkel, ultimately receiving the academic title of Ph.D. (Doctor of Philosophy).

Barbara Pfeiffer (Deputy Chairwoman of the Supervisory Board)

Employee and Chairwoman of the Works Council at Tom Tailor GmbH, Hamburg, Chairwoman of the SE Works Council and member of the Group Works Council

Born in 1966, Barbara Pfeiffer has worked at TOM TAILOR GmbH in Hamburg since 2006. She was employed in various purchasing and CSR positions at the TOM TAILOR Group, most recently as Director Strategic Buying. Since 2014, she has been Chairman of the Works Council of TOM TAILOR GmbH in Hamburg and as such has been released from these duties. She has been Chairwoman of the SE Works Council since 2016 and a member of the Group Works Council since 2018.

Ms Pfeiffer began her career at Levi Strauss Germany in 1993, where her last position was Product Manager. From 1997 to 2006, she worked at Esprit Germany in various sourcing positions.

From 1987 to 1992, Barbara Pfeiffer studied apparel technology at Albstadt-Sigmaringen University and completed her studies with a Dipl. Ing. (University of Applied Sciences) qualification.

Otmar Debald

Independent management consultant, working under his own name and for his own company

Born in 1954, Otmar Debald was employed for 30 years in various positions at consumer goods company Procter & Gamble, most recently as Director of Finance in Germany with additional responsibility for logistics and customer service in Germany, Austria and Switzerland. Since 2013, he has been a Senior Advisor at Corfina AG, additionally acting as that company’s shareholder since January 2018.

Otmar Debald studied at the University of Freiburg, where he completed his degree in economics (Diplom-Volkswirt) in 1979.

Thomas Heymann

Lawyer and Senior Counsel at law firm Covington & Burling LLP, Frankfurt am Main

Thomas Heymann, born 1952, has held the position of Senior Counsel at the law firm of Covington & Burling LLP, Frankfurt am Main, since 1 October 2019. From 2017 to 2019 he was previously employed there as a lawyer and partner. In the period from 2005 to 2017 he was a partner in the law firm of Heymann & Partner, Frankfurt am Main (now Covington & Burling LLP). He has provided legal advice to various companies of the TOM TAILOR Group since 2005. This includes advising the Management Board and Supervisory Board of the Company on its IPO, the acquisition of the Bonita sub-group and the acquisition of the equity interest by the Fosun Group.

Thomas Heymann studied economics, philosophy and law at the University of Frankfurt am Main from 1971 to 1981 before completing his legal clerkship in Hamburg between 1981 and 1984.

Zhen Huang

Executive President of Yuyuan Inc. Shanghai, China, and Global Partner of Fosun International Ltd., Shanghai, China

Zhen Huang, born 1971, is currently the Executive President of Yuyuan Inc. Shanghai, China, and Global Partner of Fosun International Ltd., Shanghai, China. Since 2018 he has served as Vice President of the Gems & Jewelry Trade Association of China, Beijing/China, and Deputy Chairman of the China Gold Association, Beijing/China. He has held various positions within the Fosun Group since 2017: He is currently Executive President of Yuyuan Inc. and Global Partner of Fosun International Ltd., Chairman of the Yuyuan Jewelry and Fashion Group, Chairman of the Yuyuan Beauty and Health Group and Chairman of the Fosun Cosmetics Group. From 2013 to 2017, he served as Deputy Managing Director of Shanghai Jahwa Inc, Shanghai/China and previously, from 2001 to 2017, as Managing Director of Shanghai Herborist Cosmetics Co, Ltd, Shanghai/China.

Zhen Huang earned a Bachelor of Economics from the University of Finance and Economics, Shanghai, China, from 1990 to 1994. He then obtained an MBA from Webster University, Webster Groves, Missouri, in the United States, from 1996 to 1998.

Michael Chou

Chief Financial Officer of the Fosun Fashion Group, Shanghai/China

Michael Chou, born 1982, has been the Chief Financial Officer of the Fosun Fashion Group since June 2018. He previously spent several years as the Finance Director of Royal FrieslandCampina, also in Shanghai, and worked as a senior manager in KPMG’s Corporate Finance, Mergers & Acquisitions division in locations including Sydney, Australia.

Michael Chou earned a Bachelor of Commerce (Accounting and Finance) at the University of Melbourne between 2001 and 2003. He then obtained an honours degree in finance between 2003 and 2004.

Sven Terpe

Employee of TOM TAILOR GmbH, Hamburg, in the Import department, Deputy Chairman of the SE Works Council and member of the Executive Committee of the SE Works Council

Born in 1980, Sven Terpe has worked in the Import department at Tom Tailor GmbH as an Import Specialist since 2005.

He began his career at Kube & Kubenz in 1999, where he completed vocational training as a forwarding agent in 2001. In the period from 2002 to 2004, he was employed at Nord-Süd-Transporte (NST).

Oliver Kerinnes

Employee of BONITA GmbH, Hamminkeln, in the position of Senior Specialist Buying; member of the BONITA GmbH Works Council, the Central Works Council of BONITA GmbH, the SE Works Council of TOM TAILOR Holding SE, and the Group Works Council of TOM TAILOR Holding SE.

Born in 1969, Oliver Kerinnes has been a Senior Specialist Buying at the TOM TAILOR Group since 2013. He has many years of experience in the procurement sector. Among other positions, he was previously a buyer at BONITA GmbH & Co KG, HOLTEX Edith Pohl e.K., EDUSCHO Versand GmbH & Co. KG, Annabell’s GmbH and Lloyd Textil Handelsgesellschaft mbH.

From 1987 to 1989, Oliver Kerinnes completed an apprenticeship as a wholesale and export merchant at Ospig Textil-Gesellschaft W. Ahlers GmbH & Co.

Stefanie Branahl

Employee of BONITA GmbH, Hamminkeln, in the position of Buyer, member of the Bonita GmbH Works Council and of the SE Works Council

Stefanie Branahl, born 1968, joined BONITA GmbH as a Buyer in January 2009.

From 1988 to 1991, she completed an apprenticeship as an industrial clerk at Klaus Steilmann GmbH & Co. KG.

Kitty Cleijne-Wouters

Employee of BONITA GmbH, Hamminkeln, in the position Area Manager Retail

Born in 1961, Kitty Cleijne-Wouters has been an employee of BONITA GmbH in the position of Assistant Senior Manager Retail since 2016. Her primary responsibility in this position is supporting the Human Resources department with regard to the BONITA GmbH stores in the Netherlands. Previously, she worked at BONITA GmbH for ten years as Area Manager and in the period prior to that as a store manager at various Netherlands-based companies, including fashion retailer Ter Horst van Geel and electronics wholesaler E.T.G. Zeddam B.V.

In the period from 1985 to 1999, she completed training in various fields such as computer science, bookkeeping and business and tax law.

Other Appointments of the Members of the Supervisory Board (as at 31 December 2019):

Dr Junyang (Jenny) Shao

-     Chairwoman of the Supervisory Board of Wolford AG, Bregenz/Austria

-     Managing Director Koller Beteiligungs-GmbH, Dietfurt

Otmar Debald

-     Member of the Advisory Board of POS Pulse/24 insights GmbH, Berlin

-     Managing Director of PP Picture Partners GmbH, Frankfurt am Main/Germany

-     Partner and Senior Advisor at Corfina AG, Frankfurt am Main/Germany

-     Member of the Advisory Board of Lintum GmbH, Frankfurt am Main/Germany

Thomas Heymann

None

Zhen Huang

-     Director of the International Gemological Institute (IGI), Antwerp/Belgium

-     Director of AHAVA - Dead Sea Laboratories Ltd, Tel Aviv/Israel

Michael Chou

-     Member of the Board of St. John Knits International Inc. in Irvine, California/United States

None of the employee representatives on the Supervisory Board are members of any other statutory supervisory boards and do not hold positions in comparable domestic or foreign corporate governing bodies.

Composition of the Supervisory Board

In December 2019 the Supervisory Board updated the objectives for its composition in accordance with section 5.4.1 (2) of the German Corporate Governance Code. Taking into account the following objectives, the Supervisory Board is to be composed in such a way that, taken as a whole, its members have the knowledge, skills and specialist expertise to duly carry out their tasks.

International Orientation

TOM TAILOR Holding SE is an international fashion company primarily active in the European market. The Supervisory Board takes this international orientation into account with respect to its composition.

For this reason, at least one member of the Supervisory Board should, if possible, be particularly qualified with respect to the Company’s international activities. This means, for example, that he or she should have long-term experience, preferably gained outside Germany, of international business – in particular in TOM TAILOR’s core markets (Austria, Switzerland, Benelux countries).

Diversity, in Particular an Appropriate Degree of Female Representation

The composition of the Supervisory Board reflects the interests of the Company and must ensure effective supervision of and advice to the Management Board. Consequently, when determining its composition, the Supervisory Board focuses particularly on the knowledge, skills and specialist expertise required to duly carry out these tasks. Additionally, the Supervisory Board believes that as a whole, its composition should comply with the principles of diversity. In this connection, the Supervisory Board is aiming in particular for an appropriate degree of female representation in compliance with the provisions of the German Act on the Equal Participation of Women and Men in Executive Positions in the Private and the Public Sector. A diversity plan with more extensive provisions regarding the composition of the governing and supervisory bodies of the Company is not currently being pursued. The goals aligned with the recommendations of the German Corporate Government Code for the composition of the Supervisory Board stipulate sufficiently specific requirements to ensure diverse Board membership overall. Individuals selected to fill a specific Management Board positions are chosen by the Supervisory Board in line with the Company’s interests and taking into account all of the circumstances of the particular situation.

According to section 17 (2) of the SE Implementation Act, the Supervisory Board of a stock exchange-listed company with a Supervisory Board with an equal number of shareholder and employee representatives must comprise at least 30% women and at least 30% men.

When examining potential candidates, the Supervisory Board should include qualified women in the selection process and take them into account appropriately when proposing candidates. Where multiple candidates are considered to be equally qualified, the Supervisory Board shall examine whether a female candidate should be preferred in order to facilitate an appropriate degree of female representation. The Supervisory Board considers this level of female representation to be appropriate with regard to the composition of the Company’s other managers and in view of other companies in the industry.

As at 31 December 2019 the Management Board of TOM TAILOR Holding SE did not have any female members. The Supervisory Board did not specify a minimum quota for the representation of women on the Management Board of TOM TAILOR Holding SE. The share of female executives on the two management levels below the Management Board of the TOM TAILOR Group as at 31 December 2019 was 30.43%. This share should not fall below 30%.

Potential Conflicts of Interest

In selecting Supervisory Board members, the focus is on their knowledge, ability and specialist expertise; these qualities shall be given priority during the evaluation process. In addition, the Supervisory Board shall take potential conflicts of interest among its members into account when determining its composition. Therefore, no persons should be on the Supervisory Board who could probably have a material and more than temporary conflict of interest. In order to avoid from the start any potential conflicts of interest that could arise during their term of office, members of the governing bodies of the Company’s major competitors should not be proposed.

Number of Independent Members of the Supervisory Board

A Supervisory Board member is not considered to be independent within the meaning of the Code as amended on 7 February 2017 in particular if he or she has personal or business relations with the Company, its governing bodies, a controlling shareholder, or an enterprise associated with a controlling shareholder, that could give rise to a material and more than temporary conflict of interest. In view of this and given the size of this governing body, the Supervisory Board should have at least two independent members.

In accordance with section 5.4.2 of the German Corporate Governance Code, the Supervisory Board discloses that Dr Junyang (Jenny) Shao, Zhen Huang and Michael Chou hold executive positions at companies of the FOSUN Group. FOSUN International Ltd., a company of the FOSUN Group, is a shareholder holding a material indirect interest in the Company. The Supervisory Board is of the opinion that the persons mentioned above otherwise have no personal or professional relationships with the Company or Group member companies, the bodies of the Company or a shareholder holding a material interest in the Company which would have to be disclosed pursuant to section 5.4.2 of the German Corporate Governance Code.

In the Supervisory Board's opinion, there are no personal or business relationships between the employee representatives and the Company, the Company's governing bodies or a shareholder holding a material interest in the Company, the disclosure of which is recommended by section 5.4.2 of the German Corporate Governance Code.

The Supervisory Board currently considers seven of its members to be independent within the meaning of the German Corporate Governance Code, including two shareholder representatives (Otmar Debald and Thomas Heymann) and five employee representatives (Barbara Pfeiffer, Stefanie Branahl, Kitty Cleijne-Wouters, Sven Terpe and Oliver Kerinnes).

Implementation of the Objectives

The Company’s interests must always be given preference when implementing all of the objectives mentioned. The Supervisory Board considers all of the above-mentioned objectives to be met at this time.

The Supervisory Board has four female members – Dr Junyang (Jenny) Shao, Barbara Pfeiffer, Stefanie Branahl and Kitty Cleijne-Wouters – and six male members – Michael Chou, Zhen Huang, Otmar Debald, Thomas Heymann, Oliver Kerinnes and Sven Terpe. This means that the statutory quota of 30% each has been met.

The members of the Supervisory Board also include finance experts (Otmar Debald and Michael Chou), a representative of the legal profession (Thomas Heymann) and representatives with professional expertise in relation to the fashion industry and Dr Junyang (Jenny) Shao).

The major shareholder Fosun International Limited is committed to the long-term strategy of the Company, and its interests are represented by Supervisory Board members Dr Junyang (Jenny) Shao, Vice President of the Fosun Fashion Group, Zhen Huang, Executive Vice President of Yuyuan Inc. and Global Partner of Fosun International Ltd., and Michael Chou, Chief Financial Officer of the Fosun Fashion Group.

MANAGEMENT BOARD AND SUPERVISORY BOARD COMMITTEES

The Management Board has not currently established any committees.

The Supervisory Board has established three standing committees to efficiently perform its tasks: an Executive Committee, an Audit and Finance Committee and a Personnel Committee. In addition, the Supervisory Board temporarily established a Restructuring Committee in June 2019 and decided to temporarily suspend the Executive Committee’s activities while the Restructuring Committee exists.

The Audit and Finance Committee is tasked with monitoring the Company’s accounting and financial reporting and the accounting process, the effectiveness of the internal control system, internal risk management system and internal audit system, as well as compliance and the financial statements audit. To this end, it may exercise the inspection and audit duties to which the Supervisory Board is entitled in accordance with section 111 (2) AktG. The Audit and Finance Committee also issues a recommendation to the Supervisory Board for its proposal to the Annual General Meeting on the election of the auditors. In the place of the Supervisory Board, it adopts a resolution on the agreement with the auditors (especially the audit engagement, determination of the areas of emphasis for the audit and the fee agreement). It takes suitable measures to determine and monitor the independence of the auditors. Prior to publication, the Audit and Finance Committee and the Management Board discuss the quarterly and half-yearly reports and other interim reports, if these are prepared for specific reasons. The Audit and Finance Committee additionally prepares the meetings and decisions of the Supervisory Board relating to the annual budget and three-year planning of the TOM TAILOR Group.

Members:

Otmar Debald (Chairman of the Audit and Finance Committee), Thomas Heymann and Kitty Cleijne-Wouters.

At least one independent member of the Supervisory Board has expertise in accounting or auditing, in the person of the Chairman of the Audit and Finance Committee.

The Personnel Committee prepares the decisions of the Supervisory Board on appointment of Management Board members, the election of the Management Board chairman and determination of the remuneration structure of the Management Board as well as the remuneration, including target agreements, of the individual Management Board members. The Supervisory Board by-laws confer on this Committee the authority to pass resolutions on the following issues:

— 
Signing, amending and terminating employment contracts with the members of the Management Board with the exception of the decisions which are the domain of the Supervisory Board pursuant to section 87 (1) and (2) sentence 1 and sentence 2 AktG (prepared by the Personnel Committee);

— 
other legal transactions with respect to Management Board members or their affiliated companies (sections 15ff. AktG) or their related parties as defined in section 15 of the Abgabenordnung (AO – German Fiscal Code);

— 
extending loans to the persons named in sections 89, 115 AktG;

— 
approving other activities of Management Board members as per section 88 AktG;

— 
approving contracts with Supervisory Board members in accordance with section 114 AktG.

Members:

Dr Junyang (Jenny) Shao (Chairwoman of the Personnel Committee), Thomas Heymann and Sven Terpe.

The Restructuring Committee is responsible for providing advice on the Company's planned restructuring measures and making recommendations to the full Supervisory Board on decision-making in this context.

Members: Dr Junyang (Jenny) Shao (Chairwoman of the Restructuring Committee), Michael Chou and Barbara Pfeiffer.

REMUNERATION OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD

Designing remuneration systems for the Management Board and the Supervisory Board members that provide incentives and reward performance in an appropriate manner is a key component of responsible corporate governance.

We refer to the detailed information in the management report.

SHAREHOLDINGS

SHAREHOLDINGS OF THE MEMBERS OF THE MANAGEMENT BOARD

Dr Gernot Lenz, Chief Executive Officer (CEO), directly held 16,000 shares of the Company as at 31 December 2019, corresponding to 0.04% of the Company’s shares. Christian Werner, Chief Financial Officer (CFO), directly held 5,595 shares of the Company as at 31 December 2019, corresponding to 0.01% of the Company’s shares. Liam Devoy and Karsten Oberheide did not hold any shares in the Company as at 31 December 2019.

SHAREHOLDINGS OF THE MEMBERS OF THE SUPERVISORY BOARD

One member of the Supervisory Board, Barbara Pfeiffer (Deputy Chairwoman) directly held 1 share of the Company as at 31 December 2019, corresponding to 0.00% of the Company’s shares.

DIRECTORS’ DEALINGS

In accordance with section 19 of the Market Abuse Regulation (MAR), the members of the Management Board and the Supervisory Board of TOM TAILOR Holding SE as well as certain employees with managerial responsibilities and any persons closely associated with these employees must disclose the acquisition and sale of TOM TAILOR shares and any related financial instruments. This duty of disclosure exists if the value of the transactions by a person belonging to the above-mentioned group of persons amounts to or exceeds EUR 5,000 (from 1 January 2020: EUR 20,000) until the end of a calendar year. Further details as well as the individual transactions disclosed can be found at http://ir.tom-tailor-group.com­tailor­group.com under Corporate Governance/Directors’ Dealings.

SHAREHOLDERS

In the 2019 reporting period, TOM TAILOR Holding SE received voting right notifications in accordance with section 33 (1) of the WpHG from institutional investors in China, France, the United Kingdom, Switzerland, the Netherlands and the United States.

ACCOUNTING AND TRANSPARENCY

Information is regularly provided to the shareholders and the public, in particular via the annual report containing the consolidated financial statements, and the interim reports. Our Group financial reporting is prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the EU, ensuring a high degree of transparency and international comparability.

Hamburg, March 2020

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