Effective corporate governance in accordance with high international standards is a matter of course for us. The essential framework for this is provided, first and foremost, by the German Stock Corporation Act and the German Corporate Governance Code. As our share is also listed on the New York Stock Exchange, we are also subject to the relevant U.S. capital market laws as well as the rules of the Securities and Exchange Commission (SEC) and New York Stock Exchange.
Our system of corporate governance provides the basis for the responsible management and control of Deutsche Bank, with a focus on sustainable value creation. It has four key elements: good relations with shareholders, effective cooperation between the Management Board and Supervisory Board, a performance-based compensation system with a sustainable and long-term focus, as well as transparent and timely reporting.
As required by law, our shareholders participate in decisions of material importance to the bank, including amendments to the Articles of Association, the appropriation of profit, the authorization to issue new shares and important structural changes. Moreover, shareholders are able to vote on a non-binding basis on the remuneration system for the Management Board. Deutsche Bank has only one class of shares, with each share carrying one voting right. To make it easier for our shareholders to exercise their voting rights, we offer absentee voting and support the use of electronic media for the Annual General Meeting. For example, shareholders can issue authorizations and voting instructions to Deutsche Bank’s proxies through the Internet.
The Management Board is responsible for managing the company and exercises control over Deutsche Bank Group companies. It ensures compliance with all provisions of law and company internal policies. In appointing people to management functions in the company, the Management Board takes diversity into account. The members of the Management Board together with the heads of the bank’s core businesses who are not members of the Management Board as well as the heads of the Americas and Asia-Pacific (excluding Japan) form the Group Executive Committee (GEC). This committee analyzes the development of markets, discusses the status of the business divisions, examines issues relating to Group strategy and the competitive environment and prepares recommendations for decisions taken by the Management Board.
The Supervisory Board oversees and advises the Management Board in its management of the business. Major decisions affecting the bank require Supervisory Board approval. It specifies the information and reporting duties of the Management Board, appoints the members of the Management Board and draws up long-term plans for their succession together with the Management Board. The Supervisory Board reviews the efficiency of its work on a regular basis. In addition to the Mediation Committee required by law, the Supervisory Board has established a Chairman’s Committee, Audit Committee, Risk Committee and Nomination Committee.
To carry out its tasks, the Supervisory Board takes care to ensure that it has a balanced composition and that together its members possess the required knowledge, ability and expertise. Furthermore, the Supervisory Board respects diversity in the company, in particular when appointing members to the Management Board and making proposals for the election of the Supervisory Board. In light of the bank’s global business activities, the Supervisory Board has an appropriate number of members with long-term international experience. The Supervisory Board also has a sufficient number of independent members.
The compensation system for the Management Board is intended to ensure, above all, its appropriate and sustainable remuneration. Variable compensation is based on Deutsche Bank’s overall results while taking the risks assumed into account, along with the relevant unit’s contribution to results and individual performance. Major factors for determining the performance-related compensation components are the achievement of a return on equity target and the bank’s total shareholder return compared to the corresponding figure for a selected peer group, in each case based on a multiple-year average. The variable compensation is mainly granted on a deferred basis and is subject to certain conditions of forfeiture. At least 50 % of the total variable compensation is equity-based and thus reflects both the positive and negative performance of Deutsche Bank’s share price.
The Supervisory Board members’ compensation is made up of fixed and variable components. In accordance with the Articles of Association, the variable compensation component is subject to exceeding pre-defined minimum targets related to the dividend and the three-year average earnings per share. The chair and the deputy chair of the Supervisory Board as well as the chair and members of the Supervisory Board committees, with the exception of the Nomination Committee, receive additional compensation.
Shareholders and the public are regularly kept up to date through the Annual Report, including the Consolidated Financial Statements, as well as the Interim Reports. The reporting of Deutsche Bank Group is in accordance with International Financial Reporting Standards (IFRS). This provides for a high degree of transparency in financial reporting and facilitates comparability with our international peers.
Declaration of Conformity
On October 25, 2011, the Management Board and Supervisory Board published the annual Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act. This states that Deutsche Bank AG acts in conformity with the recommendations of the German Corporate Governance Code in the version dated May 26, 2010, although as a precautionary measure one exception is specified regarding No. 5.5.3 sentence 1, which addresses the disclosure of conflicts of interest in the report of the Supervisory Board to the General Meeting.
Our detailed Corporate Governance Report, along with the Corporate Governance Statement for 2011 and other documents on our corporate governance, such as the terms of reference for the Management Board, the Supervisory Board and its committees, are available on the Internet at .
We continuously check our system of corporate governance in light of statutory requirements as well as domestic and international standards, and make the appropriate adjustments.