GERMANY Law and Practice Contributed by: Eva Nase and Kay-Uwe Neumann, POELLATH
the management board and the management boards for second/third line management, as well as dead - lines for when such percentages are to be reached. If the set target is zero, the management board must justify this in a clear and comprehensive manner. If the percentage of women on the management board is below 30% at the time of the determination, the target percentage may not be lower than the present percentage. These corporations must include a declaration on corporate governance in their management reports. The DCGK recommends taking diversity into account In AGs, SEs and KGaAs that are parity codetermined and listed on a stock exchange, the supervisory board (or, in the case of a single-tier system SE, the admin - istrative board) must be composed of at least 30% women and at least 30% men. The minimum percent - age must be complied with by the shareholder and employee representatives on the board in its entirety. Furthermore, corporations that need to fulfil the afore - mentioned gender criteria must include information on whether the company has complied with the portion requirements for the appointment of women and men as supervisory board members in their declaration on corporate governance. With respect to the supervisory board of an AG and to a two-tier system SE or an administrative board of a single-tier system SE that are listed on a stock exchange or codetermined, the supervisory board must also set a target for women on the supervisory board, as well as deadlines for such target is to be achieved. With regard to a target of zero or below 30%, the same applies to the supervisory board as to the management board, as described above. when composing the management. Composition of Supervisory Boards At least one member of the supervisory board must have expertise in the field of accounting, and at least one other member of the supervisory board must have expertise in the field of auditing. Sufficient expertise can, for example, be assumed for: • financial directors;
• expert employees from the fields of accounting and controlling analysts; and • long-standing members of audit committees or works council members who have acquired this ability in the course of their work through further training. The DCGK recommends, among other matters, that the supervisory board determines concrete objectives regarding its composition and prepares a profile of skill and expertise for the entire board, while taking diversity into account. The profile of skill and expertise shall also comprise expertise regarding sustainability issues. It is recommended that both are taken into account for the supervisory board’s proposals to the general meeting. The DCGK further recommends that a cer - tain number of members of the supervisory board as well as certain members – eg, the chairperson – are independent (see 3.5 Independence of Directors ). The implementation status of the objectives and the profile of skill and expertise, as well as the number of independent members deemed to be appropriate by the supervisory board, are to be disclosed in the corporate governance report in the form of a qualifi - cation matrix. 3.4 Appointment and Removal of Directors/ Officers In an AG and an SE, the respective supervisory or administrative board is responsible for appointing and generally dismissing the members of the management board or the managing directors. The maximum term of office is five years in an AG and six years in an SE; a reappointment or extension is principally permitted. The members of the supervisory and administrative board are appointed by the general meeting, for a maximum term of office of approximately five years in an AG and six years in an SE. Reappointment is permitted. Dismissal could happen by resolution of the general meeting with a majority of at least three quarters of the votes cast, unless the articles of asso - ciation provide otherwise. Employee representatives on the supervisory board in the case of codetermina - tion are generally appointed by employee elections.
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