Good corporate governance is and has always been part of our DNA.
Aareal Bank AG – Aareal Bank Group's parent company – published its own governance code in 1999, three years before the German Corporate Governance Code ("the Code") appeared. It welcomes and supports the Code's objectives and aims, and regularly observes the amendments and enhancements to the recommendations adopted by the government-appointed Commission on the German Corporate Governance Code. The Bank has updated its own code every year since 2002 in line with the amendments to the German Corporate Governance Code, using the annual declaration of compliance as a basis.
Many things go to make up good corporate governance; core elements definitely include a responsible approach to the interests of stakeholders and especially of shareholders, employees, creditors and the environment. Internal and external transparency; a sustainable dividend policy; efficient cooperation between the Bank's managing bodies based on constructive dialogue; and incentive and control mechanisms are further important aspects.
Our annual declaration of compliance explains whether and how we comply, or will comply in the future, with the most recent version of the recommendations made by the government's Commission on the German Corporate Governance Code.
We use our Annual Report to publish details of the remuneration system for our Management Board and Supervisory Board and to disclose the amount of remuneration paid to risk takers. This reporting complies with all the requirements of the German Public Limited Companies Act (Aktiengesetz – AktG), the German Commercial Code (Handelsgesetzbuch – HGB) and the German Corporate Governance Code, which we comply with as a listed public company, as well as the requirements of the German Banking Act (Kreditwesengesetz – KWG) and the German Remuneration Regulation for Institutions (Institutsvergütungsverordnung – InstitutsVergV), which we are bound to observe as a major institution.
Transactions in excess of €5,000.00 per calendar year conducted in relation to securities of the Company and associated financial instruments by members of the Management Board and Supervisory Board of Aareal Bank AG and by persons closely associated with them ("managers' transactions") shall be notified within 3 business days and published on the Company's website.
Shareholders are required by the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) to notify the Company and the Federal Financial Supervisory Authority if their holdings of ordinary shares or related instruments reach certain thresholds (3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the voting rights).
Changes in equity interests notified to Aareal Bank Group can be found here.
You can view the current version of Aareal Bank AG's Memorandum and Articles of Association here.
Integrity and responsible conduct are obligations that apply to all employees – regardless of their function or role. The Code of Conduct is an integral part of our system of responsible corporate governance. It contains binding rules requiring all employees to act in a lawful and ethical manner towards clients, business partners and colleagues.
“We consider respect for human rights to be an inalienable part of our responsibility as a global enterprise. Aareal Bank Group not only complies consistently with all applicable national laws but also sees voluntary undertakings as a key component of its business activities. This is why we have committed to resolutely supporting human rights within our sphere of influence.”
The Management Board
As a public limited company, Aareal Bank AG and the Group have a dual management system. The Supervisory Board controls and monitors, but also advises, the Management Board and in doing so helps it meet the challenges posed by a dynamic environment. The Management Board provides the Supervisory Board with comprehensive information on events and occurrences at the Company and on its security and back-up systems, and consults the Supervisory Board on material issues.
Between meetings, liaison is not confined to the Chairmen of the Management Board and the Supervisory Board; in addition, individual members of the Management Board and the Supervisory Board, and in particular the chairs of the committees, are in regular contact with each other.
Aareal Bank AG complies in full with the requirements of section 25d of the KWG and has therefore established the committees that are required by law. The Executive and Nomination Committee focuses primarily on the human resources policy for the Supervisory Board, the Management Board and senior management, and is in constant strategic dialogue with the Management Board. The Risk Committee monitors the Management Board with respect to risk-related issues and advises it on the design of the risk strategy and risk management system.
Reports by Internal Audit and all financial reports are submitted to the Audit Committee. This committee takes the lead in selecting and monitoring the auditors. The Remuneration Control Committee deals with remuneration issues relating to the Management Board and employees, particularly from a risk perspective.
In addition, a Technology and Innovation Committee was established in 2015; this focuses among other things on the information technology used at the Company as well as on IT products developed and distributed by Aareal Bank Group companies.
Further information on the Supervisory Board, its work and its committees can be found in the "Transparency" chapter of the Group's Annual Report.
When addressing the composition of the Supervisory Board and the Management Board, the Supervisory Board takes care to avoid the danger of "groupthink" and preconceptions as far as possible by ensuring adequate diversity on these governing bodies. In particular, the Supervisory Board has set itself targets for the participation of women on the Management Board and the Supervisory Board and has in fact exceeded them in the former case, giving it an above-average proportion of women on a management board in Germany.
In addition, it has set an age limit of 70 for Supervisory Board members and ensures, to the extent appropriate, that members come from a variety of different educational and professional backgrounds. The guidelines for selecting suitable candidates for the Management Board and the Supervisory Board can be found in the "Transparency/Corporate Governance Report" chapter of the Group's Annual Report.
The Supervisory Board has developed profiles for itself and the Management Board and for the individual functions within them, which allow it to assess potential candidates' personal reliability and professional qualifications, and to ensure that the individual candidates fit the bodies concerned as a whole. This means it can also react swiftly to any changes in composition that occur at short notice. The Executive and Nomination Committee starts preparing more than a year in advance for long-term changes such as the end of appointment periods or resignations for which prior notice has been given. In addition, the Management Board monitors the diversity of the ages and length of service of Supervisory Board members in order to prevent a large number of appointments expiring at once ‒ a situation that could lead to a loss of essential know-how.
The Executive and Nomination Committee assesses the structure, size, composition and performance of the Management Board and Supervisory Board at least once a year. In addition, it evaluates the knowledge, skills and experience both of individual members and of the Management Board and Supervisory Board as a whole.
Aareal Bank AG has been classed as a "major institution" and is therefore supervised directly by the European Central Bank in joint supervisory teams together with the Federal Financial Supervisory Authority and Deutsche Bundesbank. Aareal Bank AG takes care to ensure transparency with respect to all three institutions and makes open, constructive dialogue an extremely high priority. It frequently goes beyond the minimum requirements in this area, supplementing the supervisory authorities' expectations to reflect its own corporate governance objectives.
Find out more in our Group's Annual Report.
As already announced in February 2016, Aareal Bank Group has adopted a dynamic dividend policy. The goal is to successively increase the distribution ratio in the period up to 2018. Current plans provide for a supplementary dividend of up to 30 per cent on top of the base distribution ratio, which will continue to be approximately 50 per cent of earnings per share (EPS).
The change in dividend policy is connected with our strategic agenda, "Aareal 2020 – Adjust. Advance. Achieve.". This is our answer to the many challenges posed by the future – and to the opportunities that this testing environment nevertheless offers.
Wie im Februar 2016 verkündet, verfolgt die Aareal Bank Gruppe eine dynamische Dividendenpolitik. So soll die Ausschüttungsquote bis 2018 sukzessive steigen. Dabei soll die Basisdividende von weiterhin ca. 50 Prozent des Ergebnisses je Stammaktie (EPS) auf Basis der aktuellen Planungen um eine Zusatzdividende von bis zu 30 Prozent ergänzt werden.
Diese Änderung der Dividendenpolitik steht im Zusammenhang mit unserer strategischen Agenda „Aareal 2020 – Adjust. Advance. Achieve.“. Sie ist unsere Antwort auf die mannigfaltigen Herausforderungen der Zukunft – und auf die Chancen, die sich in einem herausfordernden Umfeld gleichwohl bieten.