Information concerning the Corporate Governance Code of Aareal Bank
In 1999, three years before the German Corporate Governance Code (GCGC) became effective, Aareal Bank AG had already published its own Code,. The Bank´s code has since been updated according to the developments of the GCGC subject to the annual Declaration of Conformity. The Bank´s code is amended by so called "further principles" in a separate chapter III, which contains additional rules to prevent conflicts of interest.
Updating the Aareal Bank Code in parallel to the GCGC caused bureaucratic effort without improving transparency. Hence, in the Supervisory Board meeting of 16 September 2008, the Management Board and the Supervisory Board decided, to follow market usage, informing about the implementation of the GCGC rules exclusively in the context of the Declaration of Conformity. The Aareal Bank Code will not be continued in its previous form.
Nevertheless, the "further principles" as stipulated in chapter III of the Aareal Bank Code will, of course, continue to apply and will remain binding for the bank in the future. The principles are mentioned below:
Further Principles of Aareal Bank AG
The avoidance of conflicts of interest is of paramount importance for any enterprise and for a bank in particular. We have, therefore, adopted the following rules that go beyond the regulations contained in the German Corporate Governance Code:
- The rules regarding conflicts of interest pursuant to Clause 4.3 of the Corporate Governance Code of Aareal Bank AG also apply to senior group executives, subject to the proviso that any and all conflicts of interest must be disclosed, without delay, to the responsible supervisor instead of the Supervisory Board, and that any decisions in this regard will be made by the relevant supervisor.
- Members of the Management Board and senior group executives are also prohibited to transact business in their own name, or in the name of related parties, outside their work-related activities, which would conflict with the interests of the company or group companies. The rules and regulations of banks regarding employee transactions are directly applicable. In accordance with these rules and regulations, the members of the Management Board and group staff must abstain from transactions intended to achieve any benefits from the short-term price differences arising from the frequent execution of transactions and counter-transactions (speculative transactions).
- a) Management Board: All transactions between the enterprise and its staff members on the one hand, and Management Board members and their related parties, or companies they have a personal association with, on the other hand, require prior approval by the Supervisory Board. The extension of loans to members of the Management Board requires the approval of all other members of the Management Board as well as the approval of the Supervisory Board.
b) Senior group executives: The foregoing paragraph 3.a also applies accordingly to senior group executives, subject to the proviso that business transactions between senior group executives require the approval of the Management Board. The extension of loans to senior group executives requires the approval of all members of the Management Board as well as the approval of the Supervisory Board. Where staff are not deemed to be staff within the meaning of section 15 of the German Banking Act (loans extended by a financial institution to closely associated persons or companies), approval by all Management Board members will suffice.
- Supervisory Board members: Members of the Supervisory Board must disclose conflicts of interest to the Management Board as well as the Chairperson of the Supervisory Board or his/her Deputy. The Chairperson of the Supervisory Board or his/her Deputy will decide in cases of conflicts of interest.
- The members of the Management Board and the Supervisory Board shall, without delay, disclose to the company all purchases and sales of shares in the company and group companies, or options as well as other derivatives thereon by the Management or Supervisory Board following execution of these transactions. The company shall publish any such notifications without delay.