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Implementation of the recommendations of the German Corporate Governance Code

The Government Commission for the German Corporate Governance Code (GCGC) refrained from revising the GCGC in 2011 and the version of 26 May 2010 therefore remains valid. comdirect bank had already declared in the previous year that in accordance with the Code recommendations of the GCGC it will take diversity into consideration when filling Supervisory Board, Management Board and managerial positions in the company and strive to achieve an appropriate degree of female representation.

The first half of 2011 saw the launch of a project aimed at increasing the proportion of women in managerial positions in the comdirect group. The measures to support women include cooperation with women’s networks at universities, diversity training and mentoring programmes. At the end of 2011, the proportion of female managers stood at more than 20%; in the training programmes for junior specialists and executives, the share amounted to 30%. As these levels are already high and significantly above the average for German companies, we have decided not to introduce any fixed quota for women. Nonetheless, sections 4.1.5 (When filling managerial positions in the enterprise, the Management Board shall take diversity into consideration) and 5.1.2 (When appointing the Management Board, the Supervisory Board shall also respect diversity) continue to be implemented in full.

At its meeting in August 2011, the Supervisory Board revised the person specification for its members including its objectives for the composition of the executive body. This text now reads: “The aim is for the composition of the Supervisory Board to ensure the qualified supervision of and advice for the management of the bank by the Supervisory Board, whereby it cannot be expected that every single member of the Supervisory Board possesses all the necessary expertise and experience to the full extent. Nevertheless, at least one member of the Supervisory Board should be available as a competent contact partner for each aspect of Supervisory Board activity so that the extensive expertise and experience is reflected by the members of the Supervisory Board as a whole. However, certain indispensible general knowledge, expertise and experience is required of every member of the Supervisory Board. Taking into account the general age limit of 72 years set by the Supervisory Board, candidates are to be proposed who through their integrity, motivation, independence and character are in a position to perform the tasks of a Supervisory Board member of a modern retail bank and to maintain and enhance the reputation of comdirect bank in the public domain. Diversity is to be taken into account in the composition of the Supervisory Board; on the shareholder side, at least one woman must be represented on the Supervisory Board.“ As a result of the now included quantitative target for female representation on the Supervisory Board, comdirect bank now implements Section 5.4.1 clause 3 of the GCGC in full. The current composition of the Supervisory Board meets the objectives.

In contrast, a new deviation from the recommendations of the GCGC arises as a result of the adjustment to the compensation system for the Board of Managing Directors carried out in the year under review in implementation of the executive compensation regulation for banks (InstitutsVergV). The regulations collide with the recommendation in Section 4.2.3 of the GCGC, whereby retroactive changes to the performance targets or the comparison parameters should be excluded with regard to the variable compensation components for members of the Board of Managing Directors; a deviation from the GCGC is therefore unavoidable.

As in the previous year, the second deviation relates to Section 5.3.3 of the Code. According to this recommendation, the Supervisory Board should form a nomination committee which is composed solely of representatives of the shareholders and which suggests suitable candidates to the Supervisory Board for its election proposals to the annual general meeting. The Supervisory Board of comdirect bank comprises a total of six members, four of whom are shareholder representatives. Forming an additional committee from its membership would in our opinion be an “excessive structuring” of the Board. In addition, there are no apparent reasons as to why the full Supervisory Board should not itself be able to achieve the improved transparency of the selection procedure intended by the Government Commission through the introduction of nomination committees.