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 § 161 OF THE GERMAN STOCK CORPORATION ACT (AKTIENGESETZ / AKTG)
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
Since the last Declaration of Compliance was issued in October 2019, TOM TAILOR Holding SE has complied with the recommendations of the Government Commission on the German Corporate Governance Code published by the German Federal Ministry of Justice in the Federal Gazette recently in the latest version dated 07 February 2017 with the exception of clause 4.1.3 sentence 2 (Compliance Management System), clause 4.2.3 paragraph 2 sentence 3 (Remuneration for Members of the Management Board), clause 5.4.1 paragraph 2 sentence 1, paragraph 4 sentence 1 (Overall Profile of Skills and Expertise for the Supervisory Board), clause 5.4.6 paragraph 1 sentence 2 (Compensation for Members of the Supervisory Board) and clause 7.1.2 sentence 3 (Financial Reporting):
- Since April 2017 Management Board has started with the preparation and implementation of a specific Compliance Management System across the group within the meaning of clause 4.1.3 sentence 2 German Corporate Governance Code (GCGC). This system provides appropriate measures reflecting the company’s risks situation in order to ensure that all provisions of law and the company’s internal policies are complied with. This Compliance Management System has also been extended in the year 2019. Remaining issue in the focus was data protection compliance.
- The contracts for the Management Board members Dr. Gernot Lenz and Christian Werner provide financial arrangements which possibly deviate from the recommendation in clause 4.2.3 paragraph 2 sentence 3 of German Corporate Governance Code. Indeed, monetary remuneration comprises fixed and variable components. Though variable components have - with few exceptions - not a multiple-year assessment basis. Rather they are each bound by the achievement of the financial targets for the years 2019, 2020 and 2021 laid down in the restructuring concept. It is, however, contractually agreed that after implementation of the reorganization concept, at the latest by 1.1.2022, these calculation bases shall be replaced by criteria which fully comply with the requirements of the recommendation in clause 4.2.3 paragraph 2 sentence 3 of German Corporate Governance Code. Up to this point in time, restructuring the group is a top priority from the Supervisory Board's point of view.
According to appraisal of Supervisory Board its members fulfil all fields of competence which are required for an efficient activity of Supervisory Board. Currently, Supervisory Board has considered the determination of an overall profile of skills and expertise within the meaning of section 5.4.1 paragraph 2 sentence 1 GKGC as not required. Therefore, proposals by the Supervisory Board to the General Meeting for appointment of new Supervisory Board members will not aim at fulfilling the overall profile of required skills and expertise of Supervisory Board within the meaning of clause 5.4.1 paragraph 4 sentence 1 GCGC. In consequence, Corporate Governance Report does not publish information about the implementation status according to clause 5.4.1 paragraph 4 sentence 2 GCGC.
In deviation from the recommendation in clause 5.4.6 paragraph 1 sentence 2 GCGC, the position of Vice Chairman of the Supervisory Board of the Supervisory Board is not considered when setting compensation for Supervisory Board members. The Vice Chairman of the Supervisory Board does not currently undertake any additional duties which would represent a greater burden compared to those of a regular Supervisory Board member.
In deviation from clause 7.1.2 sentence 3 GCGC, the consolidated financial statements and the group management report have not been made publicly accessible within 90 days from the end of the financial year. Reason for that have been organizational and temporal additional expenses, which accrued through the capital increase in February as well as the continuous negotiations between the company and the consortium banks as wells as the majority shareholder Fosun with regard to the final financing structure. For the future management board plans to meet the deadlines again.
TOM TAILOR Holding SE intends to comply with the recommendations of the German Corporate Governance Code in future as well – with 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.
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 three members in the 2018 financial year: Dr. Heiko Schäfer (Chief Executive Officer, CEO), Thomas Dressendörfer and Liam Devoy.
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.
Karsten Oberheide was appointed as an additional member of the Management Board with effect from 1 January 2019. Mr. Oberheide has many years of experience in the fashion industry. After studying economics at Carl von Ossietzky University in Oldenburg, 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.
The Company’s Management Board therefore comprised the following members as at 31 December 2018; the member of the Management Board were appointed at different times:
Dr. Gernot Lenz
Born in 1974
Chairman of the Executive Board/CEO
since November 1, 2019
Chairman of the Board
until 31 October 2022
Born in 1976
Chief Financial Officer/CFO
since November 1, 2019
Member of the Management Board
until 31 October 2022
Born in 1962
Director of Procurement, Logistics and IT/COO
since 1 August 2017
Member of the Management Board
until 31 July 2020
Born in 1967
Executive Board BONITA Division
since January 1, 2019
Member of the Management Board
until 31 December 2021
Since 1 November 2019, Dr. Gernot Lenz has been Chief Executive Officer (CEO) of TOM TAILOR Holding SE, where he is responsible for corporate strategy, product, sales, digitalization and marketing.
Most recently, Dr. Lenz was CEO of the s.Oliver Group. Previously he held the roles of COO Tommy Hilfiger Global and PVH Europe in Amsterdam and was responsible, among other things, for the digital transformation, the omnichannel strategy and operational management of the European e-commerce business of the Tommy Hilfiger and Calvin Klein brands. Prior to that, Dr. Lenz worked as a strategy consultant at Bain & Company.
Dr. Lenz was born in Reutlingen in 1974. He studied business administration at the Catholic University of Eichstätt-Ingolstadt as well as at the Universidad Autónoma de MaDr.id and received his doctorate at the Technical University of Dr.esden in Public Health.
Christian Werner has been Chief Executive Officer (CEO) of TOM TAILOR Holding SE since 1 November 2019, where he is responsible for finance and accounting, controlling, investor relations, human resources, auditing, taxes and legal affairs. Christian Werner joined the TOM TAILOR Group in February 2014 and most recently held the position of Vice President Finance. During this time, he was in charge of numerous financing and optimisation projects within the company.
He began his professional career as a graduate trainee with the Landesbank Baden-Württemberg in Mannheim and held executive positions in the Corporate Advisory unit of Deutsche Bank as well as at NIBC Bank N.V.. Prior to that, he worked for several years as a management consultant with Arthur Andersen and Ernst & Young.
Christian 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 in the areas of 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 ChilDr.en’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 studied English and Politics at Bridgewater State University.
As of 1 January 2019, Karsten Oberheide has been responsible for the BONITA division on the Management Board of the TOM TAILOR Group. Prior to this, he had been Chief Sales Officer for BONITA since September 2018, assuming responsibility for the company"s operating business.
As an experienced sales and purchasing expert, he has comprehensive knowledge of how to optimize operational structures and processes. Karsten Oberheide can Dr.aw on expertise acquired in his position as Managing Director Retail at Gerry Weber, where he was responsible for managing sales in his own channels since 2015. After his studies, Karsten Oberheide became familiar with the fashion business from the ground up: starting as a trainee at the former SinnLeffers AG, he developed over several positions from department head to managing director of SinnLeffer AG, which merged in 1997. From 2002, he also took over the management of the textile sales brand. From 2003, he was ultimately responsible for Sales and Purchasing in a managerial function and was promoted to Managing Director in 2007. Following the takeover by Wöhrl in 2013, he was appointed to the Management Board with responsibility for Purchasing and Marketing.
With the exception of the activities described above, the company"s Management Board members do not hold or have held any administrative, management or supervisory board mandates or partnerships with comparable domestic or foreign bodies outside the TOM TAILOR Group, either at present or during the last five years.
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.
On 28 May 2019, former Chairman of the Supervisory Board Dr. Thomas Tochtermann stepped down as Chairman and as a member of the Company’s Supervisory Board with effect from the time that a new Supervisory Board member is appointed by the court but no later than midnight on 25 June 2019. Hamburg Local Court appointed Michael Chou as a member of the Company’s Supervisory Board in his place with effect from 17 June 2019 and limited this appointment until the shortage of Supervisory Board members is rectified in accordance with Section 104 (6) of the Aktiengesetz (AktG – German Stock Corporation Act).
On 19 June 2019, the Supervisory Board of the Company elected Dr. Junyang (Jenny) Shao as its new Chairwoman.
Accordingly, the Supervisory Board of the Company is composed of the following members:
The shareholder representatives are Dr. Junyang (Jenny) Shao (Chairwoman of the Supervisory Board), Otmar Debald, Andreas Karpenstein, Yun (Joann) Cheng 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.
- 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 Chairwoman 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.
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 Altstadt-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.
- Andreas Karpenstein
Partner and Managing Director of Deloitte Legal Rechtsanwaltsgesellschaft mbH, Düsseldorf
Andreas Karpenstein (born in 1963) has been Partner and Managing Director at Deloitte Legal Rechtsanwaltsgesellschaft mbH, since 2002. His career as a lawyer began in 1995 at Andersen Luther Rechtsanwaltsgesellschaft mbH.
Andreas Karpenstein studied law at the Universities of Würzburg and Göttingen and was subsequently a lecturer in business and labour law at various universities.
- Yun (Joann) Cheng
Chairwoman of the Fosun Fashion Group, Shanghai/China
Born in 1976, Yun (Joann) Cheng currently holds the position of Chairwoman of the Fosun Fashion Group. Yun (Joann) Cheng has many years of experience in the financial sector. Between 2011 and 2015 she worked as Chief Financial Officer at various companies, namely DJI Innovation and the Allyes Group, prior to which she was a senior manager in the Auditing department at KPMG, among other things.
Yun (Joann) Cheng studied economics at Shanghai University of Finance & Economics from 1994 to 1998 before going on to do an Executive Master of Business Administration (EMBA) at the China Europe International Business School between 2011 and 2013.
- Michael Chou
Chief Financial Officer of the Fosun Fashion Group, Shanghai/ China
Michael Chou has been the Chief Financial Officer of Fosun Fashion Group since June 2018. He previously spent several years as the Finance Director of Royal FrieslandCampina, also in Shanghai, China, 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 of Assistant Senior 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:
Dr. Junyang (Jenny) Shao
- Chairwoman of the Supervisory Board of Wolford AG, Bregenz/Austria
- Managing Director Koller Beteiligungs-GmbH, Dietfurt
- Member of the Advisory Board of POS Pulse/24 insights GmbH, Berlin
- Managing Director of PP Picture Partners GmbH, Frankfurt am Main/Germany
- Member of the Supervisory Board (Deputy Chairman) of Trusted Advice AG, Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Düsseldorf/Germany
Yun (Joann) Cheng
- Member of the Supervisory Board of Wolford AG, Bregenz/Austria
- Chairman of the Board of JEANNE LANVIN S.A., Paris/ France
- Member of the Board of St. John Knits International Inc. in Irvine, California/USA
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 2018 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.
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 2018 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 2018 was 36%. 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, Yun (Joann) Cheng 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 proposed for election 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 Andreas Karpenstein) und 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 five female members – Dr. Junyang (Jenny) Shao, Barbara Pfeiffer, Yun (Joann) Cheng, Stefanie Branahl and Kitty Cleijne-Wouters – and five male members – Dr. Thomas Tochtermann (until 17 June 2019), Michael Chou (since 17 June 2019), Otmar Debald, Andreas Karpenstein, 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 (Andreas Karpenstein) and representatives with professional expertise in relation to the fashion industry (Yun (Joann) Cheng 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, Yun (Joann) Cheng, Chairwoman of the Fosun Fashion Group, 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. It also set up a Nomination Committee in March 2019. 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 Executive Committee is responsible for preparing the Supervisory Board meetings and coordinating the work of the Supervisory Board. The Executive Committee lays the groundwork for corporate governance-related decisions by the Supervisory Board and, in the place of the Supervisory Board, resolves amendments to the annual Declaration of Compliance to adDr.ess changes in circumstances. It also checks compliance with the Declaration of Compliance.
- Thomas Tochtermann (Chairman of the Executive Committee), Andreas Karpenstein and Barbara Pfeiffer (as at 31 December 2018).
- Junyang (Jenny) Shao (Chairwoman of the Executive Committee), Andreas Karpenstein and Barbara Pfeiffer (since June 2019 - committee memberships currently inactive).
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.
- Otmar Debald (Chairman of the Audit and Finance Committee), Yun (Joann) Cheng (until 12 November 2018), Dr. Junyang (Jenny) Shao (since 12 November 2018) and Kitty Cleijne- Wouters (as at 31 December 2018).
- Otmar Debald (Chairman of the Audit and Finance Committee), Michael Chou and Kitty Cleijne-Wouters (since June 2019).
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.
- Dr. Thomas Tochtermann (Chairman of the Personnel Committee), Dr. Junyang (Jenny) Shao and Sven Terpe (as at 31 December 2018).
- Dr. Junyang (Jenny) Shao (Chairman of the Personnel Committee), Michael Chao and Sven Terpe (since June 2019).
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 presentation in the management report on pages 50 ff. The annual report 2018 can be downloaded here: HTTP://IR.TOM-TAILOR-GROUP.COM / Publications / Annual Reports.
SHAREHOLDINGS OF THE MEMBERS OF THE MANAGEMENT BOARD
Dr. Heiko Schäfer (CEO) directly held 57,000 shares of the Company as at 31 December 2018, corresponding to 0.15% of the Company’s shares. Thomas Dressendörfer (CFO) directly held 35,000 shares of the Company as at 31 December 2018, corresponding to 0.09% of the Company’s shares. Both Dr. Heiko Schäfer and Thomas Dressendörfer have accepted the voluntary public takeover offer of Fosun International Limited dated 1 April 2019 and each sold their entire shares at a price of EUR 2.31 per share; neither of them currently holds any shares in TOM TAILOR Holding SE.
Liam Devoy (COO) and Karsten Oberheide (Management Board member responsible for BONITA) held no shares of the Company as at 31 December 2018.
Dr. Gernot Lenz (CEO since 1 November 2019) held no shares of the Company as at 1 November 2019. Christian Werner (CFO since 1 November 2019) has bought shares of the Company before his assignment as a member of the Management Board and directly held 5.595 shares of the Company as at 1 November 2019, corresponding to 0,01 % of the Company’s shares.
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 2018, corresponding to 0.00% of the Company’s shares. Ms. Pfeiffer still holds the share after the voluntary public takeover offer by Fosun International Limited.
MANAGERS’ TRANSACTIONS (formerly 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 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.com.
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, December 2019