Declaration of conformity
(AS OF THE DATE OF THE RELEVANT DECLARATION)
The Board of Management and the Supervisory Board of Volkswagen AG issued the annual declaration of conformity with the German Corporate Governance Code as required by section 161 of the Aktiengesetz (AktG - German Stock Corporation Act) on November 21, 2014 with the following wording:
“The Board of Management and the Supervisory Board hereby declare that, in the period since the last declaration of conformity dated November 22, 2013 was issued, the recommendations by the Government Commission on the German Corporate Governance Code dated May 13, 2013 published by the German Federal Ministry of Justice in the official section of the Federal Gazette (Bundesanzeiger) on June 10, 2013 and the identical recommendations dated June 24, 2014 (German Corporate Governance Code) published in the official section of the Federal Gazette on September 30, 2014 have been complied with and will continue to be complied with, with the exception of the following articles for the reasons stated below.
- a) 4.2.3(4) (severance payment cap)
A severance payment cap is included in new Board of Management contracts. However, this is not the case for contracts entered into with members of the Board of Management commencing their third or subsequent term of office – provided that no cap was set in the first contract. Existing rights were protected in this respect.
- b) 5.1.2(2) sentence 3 (age limit for members of the Board of Management)
An age limit for members of the Board of Management is not deemed appropriate, as the ability to successfully lead the Company does not generally cease when a certain age is reached. A fixed age limit could also have a discriminatory effect. In the interests of the Company, it may be necessary to appoint someone beyond the age of 65. A fixed age limit therefore does not seem reasonable.
- c) 5.3.2 sentence 3 (independence of the Audit Committee Chairman)
Based on the wording of the German Corporate Governance Code, it is unclear whether the Audit Committee Chairman is “independent” as defined by article 5.3.2 sentence 3 of the German Corporate Governance Code. Any absence of “independence” could result from the Audit Committee Chairman’s membership of the Supervisory Board of Porsche Automobil Holding SE, his kinship with other members of the Supervisory Board of the Company and of Porsche Automobil Holding SE, his indirect minority interest in Porsche Automobil Holding SE and his business relationships with other members of the Porsche and Piëch families, who also hold an indirect interest in Porsche Automobil Holding SE. However, according to the Supervisory Board and the Board of Management, these relationships do not constitute a conflict of interest or impair the Audit Committee Chairman’s ability to perform his duties. As a precautionary measure, however, this exception is declared here.
- d) 5.4.1(4 to 6) (disclosure regarding election recommendations)
With regard to the recommendation in article 5.4.1(4 to 6) of the German Corporate Governance Code on the disclosure of particular circumstances for election recommendations of the Supervisory Board to the Annual General Meeting, the requirements of the Code are vague and their boundaries unclear. To this extent, the Board of Management and the Supervisory Board therefore declare a departure from the Code as a precautionary measure. Nevertheless, the Supervisory Board will endeavor to meet the requirements of article 5.4.1(4 to 6).
- e) 5.4.6(2) sentence 2 (performance-related remuneration of members of the Supervisory Board)
The remuneration of the Supervisory Board is determined by the shareholders in Article 17(1) of the Volkswagen AG Articles of Association by means of a link to the dividend, among other things. To this extent, we assume that the variable compensation component is linked to the “sustainable growth of the enterprise” in line with the provisions of article 5.4.6(2) sentence 2 of the German Corporate Governance Code. However, as differing interpretations of this cannot be ruled out, a departure from this recommendation of the Code is declared as a precautionary measure.”
The current declaration of conformity is also published on our website, www.volkswagenag.com/ir, under the heading “Corporate Governance”, menu item “Declarations”.
The suggestions of the current version of the German Corporate Governance Code, with the exception of the suggestion in article 5.1.2(2) sentence 1 (Appointment period for first-time appointments to the Board of Management), are complied with in full. The Supervisory Board decides the appointment period for each first-time appointment to the Board of Management on an individual basis, taking the best interests of the Company into account.
Our listed subsidiaries AUDI AG, MAN SE and Renk AG have also issued declarations of conformity with the German Corporate Governance Code.
At Scania AB, the management and supervisory functions are split between the Annual General Meeting, the Board of Directors, and the President and CEO. They are governed by the articles of association, Swedish company law and other laws and regulations.
The declarations of conformity of our listed subsidiaries can be accessed at the websites below. In addition, further information on corporate governance at Scania AB can be found at the address provided.
DECLARATION OF CONFORMITY OF VOLKSWAGEN AG
DECLARATION OF CONFORMITY OF AUDI AG
DECLARATION OF CONFORMITY OF MAN SE
DECLARATION OF CONFORMITY OF RENK AG
CORPORATE GOVERNANCE AT SCANIA AB