Our Corporate Governance Code is based on internationally and nationally recognized standards of sound and responsible company management. These also include the highest possible degree of transparency. We therefore invite you to read the section below for information about our guidelines, our risk report, as well as our company management report.
- Transparency in the Capital market
- Shareholders
- Remuneration Report
- Company management declaration as per Section 289a of the Compliance Declaration of the German Commercial Code 2020
- Declaration by the Management and the Supervisory Board
- Company Management Practices
- Working Method of the Management and Supervisory Board
- Diversity
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Diversity Plan for the Management Board and Supervisory Board
The Supervisory Board of PVA TePla AG is pursuing the following plan for the composition of the Management Board, which currently (2020) consists of two people:
The Supervisory Board considers diversity, among other factors, when assessing which individuals would best complement the other members of the Management Board. For these purposes, the Supervisory Board defines diversity as the presence of different, mutually complementary skill profiles, ages and educational, professional and life experiences in the national and international arena as well as an appropriate representation of both genders. The Supervisory Board also considers the following criteria in particular:
- Management Board members should have extensive leadership experience.
- The Management Board as a whole should possess technical expertise, particularly knowledge and experience in the production and sale of all types of special-purpose machines and other technical products, as well as international experience.
- The Management Board as a whole should have extensive experience in research and development, production, sales, finance and personnel management.
- The Supervisory Board decides which individual should fill a specific Management Board position after having considered the Company’s interests and all the circumstances of each case.
Irrespective of individual criteria, the Supervisory Board firmly believes that the final decision for selecting a candidate to fill a position on the Management Board of PVA TePla AG must come from assessing each candidate as a whole person. The Supervisory Board considers the following criteria essential for the Management Board as a whole:
- Extensive leadership experience in technical, scientific and commercial areas of activity
- International experience based on background and/or career
- A balanced age structure to ensure smooth succession planning and continuity in the Management Board’s activities
The number of Management Board members reflects the areas of activity involved in managing a holding company with multiple subsidiaries. The Management Board comprises two members as of December 31, 2019.
Diversity Plan for the Supervisory Board
The Supervisory Board of PVA TePla AG, which currently (2020) comprises three people, aims for the composition of the Supervisory Board to give due consideration to the following aspects in light of the specific situation, object and size of the Company:
All members of the Supervisory Board should be shareholder representatives with no potential conflicts of interest, especially those that can arise due to a consulting or board function with customers, suppliers, creditors, or other third parties.
The Supervisory Board as a whole should possess experience in a multinational corporation, preferably one doing business in high-tech systems engineering. Furthermore, at least one member of the Supervisory Board must have expertise in financial reporting or auditing. The Supervisory Board members must collectively be familiar with the relevant markets in which the PVA TePla Group does business.
The Supervisory Board will consider the need for diversity of age, education, professional background, internationality and gender when proposing election candidates to the Annual General Meeting.
- Diversity targets
- Risk and opportunity strategy
The risk and opportunity strategy is embedded in the corporate strategy and is designed to secure the continuation of the company as a going concern and guarantee its further development. The resulting strategy assesses the risks and opportunities of business activities. In the core activities of the company/the Group, we make a conscious decision to enter into limited and containable risks, if they make appropriate compensation likely or are inevitable. In some cases, we allocate the risks to other parties. This mainly includes concluding suitable insurance policies. This process is conducted in close cooperation with an experienced and specialized insurance broker. It is regularly reviewed for efficiency and optimized where necessary.
Other risks, which are not related to core and support processes, are avoided as far as possible. A “Risk Manual” has been made available to the members of the Management Board and employees, which includes instructions on processes and a catalog of measures to safeguard appropriate and sustainable risk management. The manual details the specific processes involved in risk management. It aims at the completeness of all risk-related activities and measures, i.e. the identification, assessment, controlling, reporting and monitoring of risks. Based on defined risk categories, risks at divisions, operating units as well as central units are identified and assessed according to their likelihood and potential damage.
Risk and Opportunity Management
The risk strategy includes the same companies as those included in the PVA TePla Group. Due to the organizational structure, risk management is carried out locally in the PVA TePla AG, in the subsidiaries and business processes. The Management Board members and Managing Directors are therefore responsible for central processes of the risk management system. The main objective of the risk management system is the early recognition of risks, in order to regularly provide the Management Board with up to date information on the current risk situation within the PVA TePla Group. The duties of those in charge include developing and, where necessary, installing measures to prevent, mitigate and hedge against risks. The main risks as well as the implemented measures are regularly monitored.
The risk reports are regularly compiled and analyzed by central risk management and checked and discussed by the Management Board and Supervisory Board. In addition to regular reporting, a reporting system has been installed within the Group to immediately report the occurrence of unexpected risks. The system also includes an annual risk inventory, in which all of the risks relevant to the Group are reported and their relevance and possible effects are assessed. Measures to reduce identified risks are defined and their implementation is monitored.
The risk management system which also includes the compliance management system enables the Management Board to identify material risks at an early stage and to implement countermeasures. The key features of the risk management system described above are applied throughout the Group. As far as processes in financial disclosure are concerned, this means that identified risks are reviewed and assessed, particularly for their potential impact on disclosures in the respective financial reports. The idea is to provide important information at an early stage about potential changes in the fair value of assets and liabilities, possible impairments and important information to assess the necessity of forming and reversing provisions.
The adequacy and efficiency of the risk management system is reviewed on a regular basis at Management Board level and adjusted where necessary. The Management Board and the Supervisory Board regularly determine the areas where the PVA TePla Group is to be subject to an internal audit. Where necessary, external companies are engaged for these audits.
Opportunity management is also an integral part of Group management. The strategy process identifies and assesses the individual areas for opportunity. Just like risks, opportunities are reported and managed locally. Frequent reporting is carried out in order to identify at an early stage whether the market or the competition has developed in such a way or whether there have been occurrences within the Group that make reassessment necessary.
Accounting-Related Internal Control and Risk Management System
The objective of the methods and measures we have put in place is to secure the assets of the company and enhance operating efficiency. The internal control system that has been implemented is intended to ensure the reliability of accounting and reporting and to ensure compliance with internal rules as well as legal regulations and the Articles of Association. We assure the adequate separation of functions and have also implemented appropriate spans of control. Furthermore, we make sure that responsibilities do not overlap and that tasks, expertise and responsibilities are pooled. We have also integrated controls into the workflows. Key components of these structures and controls include strict compliance with the system of checks and balances for all essential accounting processes, effective and precisely defined access rights for our IT systems, spot checks of employees at all levels by the respective superior, and control over the structural and process organization including the key operational company processes within the scope of our certified quality management system. The essential features of the internal control system described above apply to all functional areas. In the accounting process, the implementation of the structural and process organization controls within the internal control system assures data integrity for the information that flows into financial reporting.
In addition to these controls implemented in the organization, the individual functional areas are also monitored by superiors and, if applicable, the internal audit department. In this case, the internal audit department is responsible for reviewing the functioning and effectiveness of the internal control system. In order to conduct the audit, the internal audit department has comprehensive information and review rights.
Consolidation and the Group accounting process are based on the decentralized preparation of financial statements by each of the Group companies. These financial statements are prepared and submitted according to uniform Groupwide standards and data formats. The central accounting system is connected with the ERP system through numerous interfaces.
The entire process is controlled and verified by the central Group Accounting and Controlling department. Here, the data is also verified with regard to form and content. All of the employees involved in the process receive training at regular intervals. The parts of the internal control system relevant to financial reporting are reviewed in terms of effectiveness by the auditor as part of a risk-oriented approach.
In conclusion, we would like to point out that neither an ICS nor a risk management system can ensure with absolute certainty that the related objectives will be achieved. Like all discretionary decisions, resolutions to implement suitable systems can also be incorrect in principle. Controls may not be adequate on a case by case basis due to simple errors or mistakes, or changes to environment variables may be recognized too late in spite of corresponding monitoring.
- Auditor
- Articles of Incorporation
