Deutsche Bank

Annual Report 2017

Compliance with the German Corporate Governance Code

Declaration pursuant to Section 161 German Stock Corporation Act (AktG) (Declaration of Conformity 2017)

The Declaration of Conformity pursuant to Section 161 of the Stock Corporation Act, last issued by the Supervisory Board and Management Board on October 27, 2016, was reissued at the meeting of the Supervisory Board on October 26, 2017. The Management Board and Supervisory Board state according to Section 161 of the Stock Corporation Act:

(1) The last Declaration of Conformity was issued on October 27, 2016. Since then Deutsche Bank AG has complied and will continue to comply in the future with the recommendations of the “Government Commission’s on the German Corporate Governance Code” in the version of the Code dated May 5, 2015, published in the Bundesanzeiger on June 12, 2015, subject to the following deviations:

  • Relating to No. 5.3.3, according to which the Supervisory Board is to form a Nomination Committee composed exclusively of shareholder representatives. Section 25 (d) of the German Banking Act stipulates that the Nomination Committee of the supervisory body must take on additional tasks that should be performed not solely by the shareholder representatives on the supervisory board. For this reason, the Nomination Committee of the Supervisory Board of Deutsche Bank AG also comprises representatives of the employees. However, it will be ensured that the candidate recommendations for the election proposals to the General Meeting will be prepared exclusively by the Committee’s shareholder representatives.
  • Relating to No. 4.2.3 (2) sentence 6, according to which the amount of compensation for the Management Board members is to be capped, both overall and with regard to variable compensation components. The existing employment contracts (in conjunction with equity plan conditions) of the members of the Management Board of Deutsche Bank AG do provide for a limit (cap) in the awarding of total compensation and their variable compensation components. In this context, however, some hold the view that such limits would have to apply not only to the granting and awarding of the compensation components but also to their later payout. Although Deutsche Bank AG does not consider this view to be convincing, we state merely as a precautionary measure that a limit (cap) has not been set for the payout amount of deferred equity-based compensation and that therefore Deutsche Bank AG deviates from the recommendation in No. 4.2.3 (2) sentence 6 according to this interpretation.

(2) On February 7, 2017, the “Government Commission on the German Corporate Governance Code” submitted a new version of the Code, which was published in the Bundesanzeiger on April 24, 2017. Deutsche Bank AG has also complied and will continue to comply in the future with the recommendations of the new version of the Code subject to the deviations as stated in 1. above.

Statement on the Suggestions of the German Corporate Governance Code

Deutsche Bank voluntarily complies with the suggestions of the Code in the version dated February 7, 2017, with the following exceptions:

  • The representatives appointed by Deutsche Bank to exercise shareholders’ voting rights can be reached by those attending the General Meeting until just before voting commences. The representatives are reachable by those not attending until 12 noon on the day of the General Meeting using the instruction tool in the Internet (Code No. 2.3.2). In this manner, the risk of any technical disruptions directly before voting takes place can basically be excluded. The broadcast through the Internet also ends at the latest at this time, which means information useful for forming an opinion can no longer be expected after this point by shareholders who only participate through proxies.
  • Our broadcast of the General Meeting through the Internet (Code No. 2.3.3) starts with the opening of the General Meeting by the Chairman and covers the report of the Supervisory Board and the report of the Management Board. The shareholders then have the opportunity to hold their discussions with management. These take place without a public broadcast through the Internet.

Targets for the proportion of women in management positions/gender quota

As of the date of this Corporate Governance Statement, the percentage of women on the Supervisory Board of Deutsche Bank AG is 35 %. The statutory minimum of 30 % pursuant to Section 96 (2) of the German Stock Corporation Act (AktG) is thereby fulfilled.

On September 12, 2015, the Supervisory Board set a target for the Management Board of Deutsche Bank AG to have at least one female member by June 30, 2017. When the decision was made there were no women on the Management Board. As of June 30, 2017, two women were members of the Management Board of Deutsche Bank AG, Sylvie Matherat and Kimberly Hammonds, and this is still the case as of the date of this Corporate Governance Statement. On July 27, 2017, the Supervisory Board set a target for the percentage of women on the Management Board of Deutsche Bank AG of at least 20 % of the members by June 30, 2022.

On September 16, 2015, the Management Board set targets for the percentage of women at 17 % for the first management level and 21 % for the second management level, to be reached by June 30, 2017 (when the decision was made the percentage of women on the first management level was 14 %, and 18 % on the second management level). At the same meeting, the Management Board also set targets to be reached by December 31, 2020, for the percentage of women on the first management level at 20 % and on the second management level at 25 %.

The population of the first management level comprises Managing Directors and Directors who report directly to the Management Board and managers with comparable responsibilities and the population of the second management level comprises Managing Directors and Directors who report to the first management level.

Implementing German gender quota legislation at Deutsche Bank AG

in %
(unless stated otherwise)

Status as of Dec 31,
2016

Status as of Jun 30, 2017

Target for Jun 30, 2017

Status as of Dec 31, 2017

Target for Dec 31, 2020

Target for Jun 30, 2022

1

Legal requirement.

2

For a Management Board size of between eight and 12 members, this corresponds two women.

Women on the Supervisory Board

35 %

35 %

30 %1

35 %

30 %1

-

Women on the Management Board

2

2

at least 1

16.7 %

-

20 %2

First management level below the Management Board

15.7 %

20.6 %

17 %

18.0 %

20 %

-

Second level below the Management Board

19.5 %

19.6 %

21 %

19.6 %

25 %

-

Key conditions have changed since the target was set for the percentage of women on the “Second level below the Management Board” in September 2015. These changes include the stronger integration of Infrastructure functions in the bank’s business divisions as well as our decisions regarding the partial IPO of our Asset Management subsidiary and the merging of our Private & Commercial Bank and Postbank. Furthermore, our extensive cost reduction program imposed restrictions on hiring and appointments at this level. In fact, the already relatively low number of employees on the “Second level below the Management Board” declined further in the period since September 2015, by nearly 17 %. Small changes in absolute numbers led to relatively high fluctuations in terms of percentages. Nevertheless, we maintained our target and continue to focus on increasing the percentage of women in management positions. Within this framework, our decisions on promotions and appointments are aligned, in particular, to the suitability of the candidates for the respective roles, their demonstrated performance and their future potential.

Diversity Concept

As an integral part of our strategy as a leading European bank with a global reach and a strong home market in Germany, Diversity is a decisive factor for our success. Diversity & Inclusion help Deutsche Bank in forming sustainable relationships with our clients and partners and in taking part in the societies where we do business.

Age, gender as well as educational and professional backgrounds have long been accepted as key aspects of our far more comprehensive understanding of Diversity at Deutsche Bank.

We are convinced that Diversity & Inclusion stimulate innovation, for example, and help us to take more balanced decisions and thus play a decisive role for the success of Deutsche Bank. Diversity & Inclusion are therefore integral components of the bank’s values and beliefs and its Code of Business Conduct and Ethics.

The Supervisory Board and Management Board strive to and should serve as role models for the bank, also with regard to Diversity & Inclusion. In accordance with our values and beliefs specified above, diversity in the composition of the Supervisory Board and the Management Board also facilitates the proper performance of the tasks and duties assigned to them by law, the Articles of Association and the Terms of Reference.

Based on Deutsche Bank’s understanding of Diversity & Inclusion, the values and beliefs and the measures described in the following for their implementation also apply – to the extent legally admissible – to the Supervisory Board and the Management Board of Deutsche Bank AG. The Supervisory Board considers diversity in the company, in particular, when filling positions on the Management Board and Supervisory Board.

Diversity Concept for the Supervisory Board

The Supervisory Board is to be composed in such a way that its members as a whole possess the expertise, skills and professional experience required to effectively monitor and advise the Management Board in its management of Deutsche Bank AG and Deutsche Bank Group – also with regard to the observance of the relevant bank supervisory regulations.

In light of the international operations of Deutsche Bank, care shall be taken, in particular, that the Supervisory Board has an appropriate number of members with many years of international experience.

Also in light of the legal requirements to be observed, the Supervisory Board shall be composed of at least 30 % women and at least 30 % men.

There is an age limit of 70, in principle, for members of the Supervisory Board and the maximum length of each individual Supervisory Board membership shall generally not exceed 15 years.

Implementation

It should be taken into account that the Supervisory Board can only influence the composition of the Supervisory Board through its proposals to the General Meeting for the election of the shareholder representatives.

Based on a proposal of the Nomination Committee, a profile of requirements was issued for the Supervisory Board and candidate profiles were issued for the Chairperson of the Supervisory Board, the members of the Supervisory Board and the chairpersons of each of the committees. The profiles summarize the knowledge, abilities and experience required to properly complete the tasks of the Supervisory Board of Deutsche Bank AG (collective suitability).

For the election proposals to the General Meeting, the Supervisory Board takes into account the legal requirements according to which the Supervisory Board shall be composed of at least 30 % women and at least 30 % men (joint fulfilment by shareholder and employee representatives).

The Nomination Committee also supports the Supervisory Board with the periodic assessment, to be performed at least once a year, of the knowledge, skills and experience of the individual members of the Supervisory Board as well as of the Supervisory Board in its entirety.

Results achieved in the 2017 financial year

Throughout the 2017 financial year, 13 men and 7 women (35 %) were members of the Supervisory Board. The statutory minimum quota of 30 % was thus exceeded.

The age structure is diverse, ranging from 33 to 70 years of age at the end of the financial year and spanning three generations, according to the general definition of the term.

The length of experience as member of the Supervisory Board of Deutsche Bank ranged from under one year to around 17 years. Three of the 20 members of the Supervisory Board joined the Supervisory Board in the 2017 financial year.

In accordance with our objectives specified above, all of the shareholder representatives on the Supervisory Board have many years of international experience in various companies and functions.

The diverse range of the members’ educational and professional backgrounds includes banking, business administration, economics, law, history and information technology.

The bank transparently reports on Supervisory Board diversity in addition to the information presented above in this Corporate Governance Report / Corporate Governance Statement in the section “Management Board and Supervisory Board: Supervisory Board” as well as on the bank’s website: www.db.com (Heading “Investor Relations”, “Corporate Governance”, “Supervisory Board”).

Diversity Concept for the Management Board

Through the composition of the Management Board, it is to be ensured that its members have, at all times, the required knowledge, skills and experience necessary to properly perform their tasks. Accordingly, when selecting members for the Management Board, care is to be taken that they collectively have sufficient expertise and diversity within the meaning of our objectives specified above.

By way of resolution of the Supervisory Board, there was to be at least one woman on the Management Board by June 30, 2017, and the Management Board is to be composed of at least 20 % women by June 30, 2022. For a Management Board size of between eight and 12 members, this corresponds two women.

For the Management Board members, the age limit is reached, in general, when a member reaches the retirement age, according to the rules of the German statutory pension insurance scheme, for the long-term insured to claim an early retirement pension (“Renteneintrittsalter zur vorzeitigen Inanspruchnahme der Altersrente für langjährig Versicherte”). This is currently at 63 years of age.

Implementation

In accordance with the law, the Articles of Association and Terms of Reference, the Supervisory Board adopted candidate profiles for the members of the Management Board, based on a proposal from the Nomination Committee. These profiles take into account an “Expertise and Capability Matrix”, specifying, among other things, the required knowledge, skills and experience to perform the tasks as Management Board member, in order to successfully develop and implement the bank’s strategy in the respective market or the respective division and as a management body collectively.

In identifying candidates to fill a position on the bank’s Management Board, the Supervisory Board’s Nomination Committee takes into account the appropriate diversity balance of all Management Board members collectively. Furthermore, it also considers the targets set by the Supervisory Board in accordance with statutory requirements for the percentage of women on the Management Board.

The Nomination Committee supports the Supervisory Board with the periodic assessment, to be performed at least once a year, of the knowledge, skills and experience of the individual members of the Management Board and of the Management Board in its entirety.

Results achieved in the 2017 financial year

Throughout the financial year, two women were members of the Management Board. The target adopted for June 30, 2017 of at least one woman on the Management Board was thus clearly fulfilled. As of the end of the year, there were 10 men and two women on the Management Board.

The age structure is diverse, ranging from 47 to 63 years of age at the end of the financial year and spanning two generations, according to the general definition of the term.

The length of experience as member of the Management Board of Deutsche Bank ranged from under one year to around 5 years. Two of the 12 members of the Management Board joined the Management Board in the 2017 financial year.

Also with our strategy in mind of being a leading European bank with a global reach and a strong home market in Germany, half of the Management Board members have a German background. However, the ethnic diversity of the Management Board does not currently reflect the diversity of the markets where we do business or the diversity of our employees.

The diverse range of the members’ educational and professional backgrounds includes banking, business administration, economics, law and engineering.

The bank transparently reports on Management Board diversity in addition to the information presented above in this Corporate Governance Report / Corporate Governance Statement in the section “Management Board and Supervisory Board: Management Board” as well as on the bank’s website: www.db.com (Heading “Investor Relations”, “Corporate Governance”, “Management Board”).