HGB §289a
CORPORATE GOVERNANCE DECLARATION IN ACCORDANCE WITH SECTION 289a OF THE GERMAN COMMERCIAL CODE (HGB)
Declaration of compliance
The aim of Corporate Governance is to ensure the responsible management and control of companies with a focus on long-term value growth. Like many other public companies, XING AG adheres to the recommendations and guidelines set out in the German Corporate Governance Code (“Code”).
Since the last declaration of compliance was submitted, XING AG has complied and will comply with the recommendations of the “Government Commission Corporate Governance Code” in the version dated May 26, 2010, with the following exceptions:
3.8 (3) – D&O insurance deductible for Supervisory Board members
XING AG has taken out a D&O insurance for its Supervisory Board that does not include a deductible. The Executive Board and Supervisory Board take the view that a D&O insurance deductible does not constitute an adequate means of achieving the Code’s objectives. Deductibles of this kind are usually insured by the Executive members themselves, so that the actual purpose of the deductible is nullified.
4.2.3 (4) and (5) – Settlement cap for members of the Executive Board
The Code stipulates that contracts for Executive Board members must specify that settlement payments including bonuses to Board members in the event of a premature cessation of duties be capped at a maximum amount of twice the annual remuneration to said Executive Board member, except in cases of good cause (settlement cap), and that said payments be made for a term equal to or lesser than the remaining term of contract.
In one case, XING AG did not agree upon settlement caps in its Executive Board contracts. A settlement cap could not be enforced during contractual negotiations as it is at odds with the basic understanding of a regular Executive Board contract, which was agreed upon for the duration of the term and cannot be terminated without good cause. In this case, the Supervisory Board deliberately decided against offering a reduced contractual term in order to ensure management continuity over a longer period of time. In the case of a premature, amicable termination of the Executive Board contract and when concluding new Executive Board contracts, the Company will endeavor to accommodate the fundamental idea behind the recommendation.
Furthermore, the Code stipulates that a settlement due to premature cessation of Executive Board duties due to a change of control should not exceed three times the annual remuneration. One current Executive Board contract stipulates that in the event of a change of control under certain conditions, remuneration be paid at the contractual amount for the remainder of the term of contract or at least for a term of 1.5 years, whichever is greater. The same Executive Board contract stipulates that in the event of a change of control, a cash payment be made to the Board member at the amount of issued but not yet exercised stock options. This is aimed at excluding conflicts of interest in the event of an impending change of control. In certain situations, these agreements could lead to the recommended settlement cap being exceeded. The Supervisory Board was of the opinion, in view of the specified term of appointment of the Executive Board member, that compliance with the cap recommended by the Code is therefore unnecessary and that this cap shall be subject to individual rescission negotiations as and when appropriate.
5.3 - Formation of Supervisory Board committees XING AG’s Supervisory Board did not form any committees such as an Audit Committee (point 5.3.2 of the Code) or Nomination Committee (point 5.3.3 of the Code) as of July 2011 because the Supervisory Board only consisted of three people up until that date. In July 2011, the Supervisory Board was expanded to a total of six members. At its inaugural meeting, the newly formed Supervisory Board then created the committees recommended by the Code along with a Personnel Committee.
5.4.1 (2) and (3) – Composition of the Supervisory Board
The Supervisory Board has not specified concrete objectives regarding its composition which, whilst considering the specifics of the enterprise, take into account the international activities of the enterprise, potential conflicts of interest, an age limit to be specified for the members of the Supervisory Board and diversity. These concrete objectives shall, in particular, stipulate an appropriate degree of female representation (point 5.4.1 (2) of the Code). Should the objectives of point 5.4.1 (2) of the Code not be specified, they will not be taken into consideration when nominating suitable Supervisory Board candidates and the objectives and status of implementation will not be published in the Corporate Governance report (point 5.4.1 (3) of the Code). In the past, the Supervisory Board has already taken expertise into consideration along with an age limit, internationality, potential conflicts of interest, and diversity, and intends to do so in future.
5.4.6 (1) and (2) – Compensation of Supervisory Board members
The Vice Chairman of the Supervisory Board and the Chairman and members of committees have not been and will not be considered individually with regard to compensation of Supervisory Board members. Since the Vice Chairman already receives commensurate basic compensation, both the Executive Board and Supervisory Board believe separate compensation to be unnecessary. The compensation of Supervisory Board members has not and does not contain performance-related compensation components. In the interest of boosting the necessary independent function of the Supervisory Board, both the Executive Board and Supervisory Board wishes to avoid financial incentives connected with short-term success of the Company.
Cooperation between the Executive Board and the Supervisory Board
XING AG is of the opinion that good and transparent Corporate Governance forms an integral part of prerequisites for the success of the Company. Particular importance is placed here on a close and efficient working relationship between the Executive Board and the Supervisory Board. Open communication and active and ongoing risk management are also fundamental requirements in this regard while orderly accounting and auditing are key aspects for corporate management aimed at ensuring sustained corporate success.
The Executive Board provides the Supervisory Board with regular, prompt and comprehensive reports, in writing and also orally, concerning the development of the Company, business activities, financing and investment plans, and personnel planning. The Supervisory Board is also deeply involved in strategic and organizational decision processes that go beyond standard monitoring activities. The Supervisory Board also provides guidance and consultation to the Executive Board on issues relating to the international focus and organizational structure of the Company.
Supervisory Board
The Supervisory Board conducts its activities according to the letter of the law, the Company’s Articles of Incorporation, and the Company’s internal rules of procedure. It carefully monitors the activity of the Executive Board to the best of its ability and conscience. At present, the Supervisory Board is made up of six members, chosen at the Annual General Meeting solely from shareholders' representatives, and meets at least once every quarter in keeping with the Company’s Articles of Incorporation.
Executive Board
XING AG is subject to German law, and is bound to the German Corporate Governance Code with few exceptions. The Executive Board is aware of the high degree of responsibility it bears vis-à-vis employees, members, and the general public, and undertakes its activities with great care. The Executive Board manages the Company with the aim of bringing about long-term value growth. In consultation with the Supervisory Board, the Executive Board defines and develops the strategic alignment of XING AG.
The Group is led by an internationally experienced management team, and is currently made up of four members. As a management body, it directs the Company with the due diligence of a prudent and conscientious manager.
Dr. Stefan Gross-Selbeck is responsible for the Product, Corporate Strategy & Development, HR and Corporate Communications divisions along with the Company’s subsidiaries. As Chief Financial Officer (CFO), Ingo Chu is responsible for the areas of Accounting, Controlling, Investor Relations, Legal and Business Intelligence. Jens Pape (CTO) is responsible for the technological development of the Company and Project Management. In his capacity as Chief Commercial Officer (CCO), Dr. Helmut Becker oversees Strategic Business Development, Marketing, Advertising, Customer Management, Sales, Community and the Company’s activities in Austria and Switzerland.
The Executive Board reports regularly to the Supervisory Board on its activities, business development and the situation of the Group.
To this date, the Executive Board has not formed committees.
Transparency and information
XING AG maintains an Investor Relations website for all shareholders and interested parties, containing detailed information on the Company in German and English. Annual and interim reports are published here immediately after being released, for anyone who is interested in viewing them. The financial calendar for the Company can also be found here, as well as the Declaration of Compliance, Information on Directors’ Dealings and information related to Section 10 WpHG. Shareholders can also retrieve information on the price movement of the XING AG share on the website. Besides the conventional communication channels, the Investor Relations department at XING AG also set up separate Twitter accounts at the end of 2009, designed to communicate all investor-related information about XING. It includes regular updates for shareholders about the current share price trend and key corporate information. XING shareholders and interested parties can find information via the following options:
Twitter: xing_ir (topics and news related to the stock market)
Twitter: xing_de (topics and news about the Company in German)
Twitter: xing_com (topics and news about the Company in English)
XING Blog (the XING AG corporate blog in four languages)
http://corporate.xing.com/english/investor-relations/
Risk management
Comprehensive Corporate Governance also includes an active and continuous risk management policy. Permanent monitoring and management of risk is one of the key duties of every public company. For this purpose, the Company has implemented the early risk-recognition system required in accordance with Section 91 (2) AktG and continuously develops it within the context of current market and company developments. The Group auditors inspected the functionality of the system, and confirmed. A complete risk report for FY 2009 can be found in the Annual Report.
Data protection and IT safety
Our members entrust us with a great deal of personal data. XING AG stores this data on its servers in Germany. Members inside and outside of the European Union have access to this data. In addition, members can transfer personal data via XING around the world. XING AG is committed to upholding the strict German data protection regulations, and provides a series of security measures on its platform for all customers to prevent various security risks.
Within the Company, XING has assembled a team of employees to monitor the Company’s adherence to data protection regulations. Changes to data protection regulations are identified immediately, measures for monitoring and adhering to these regulations are analyzed and modified whenever necessary. The Company inspects new platform functionalities before they are launched for possible privacy concerns. These features are only approved once all applicable data protection regulations can be definitively met.
The Company strives to uphold these high standards, and submits to regular inspections from independent external institutes in order to cast a light into the various technical aspects of the platform.
Finally, the Company itself places high demands on its own systems - for the protection of its members, and to meet the requirements of inspectors and data protection laws as well.
Hamburg, February 2012
The Executive Board
Special distribution of funds 2012
Information about the specialdistribution of funds
Investor Relations - Contact
Gaensemarkt 43 20354 HamburgPhone: +49 (0)40 41 91 31 793
email: patrick.moeller@xing.com
Contact & Service
XING auf YouTube
XING AG - Full year results 2011
XING IR on twitter
