Governance Information • Jul 3, 2024
Governance Information
Open in ViewerOpens in native device viewer
The actions of Cherry SE's Management and Supervisory Boards are defined by the principles of good and responsible corporate governance. The Management Board and the Supervisory Board of Cherry SE report below on corporate governance in accordance with Principle 23 of the German Corporate Governance Code (GCGC) in the currently applicable version and Sections 289 f and 315d of the German Commercial Code (HGB).
On January 13, 2024, the Management Board and the Supervisory Board of Cherry SE issued the following declaration pursuant to Section 161 AktG:
"The Management Board and the Supervisory Board of Cherry SE jointly declare pursuant to Section 161 of the German Stock Corporation Act (AktG) that since issuing its most recent Declaration of Compliance on December 28, 2022 Cherry SE has complied with the recommendations of the German Corporate Governance Code ("GCGC") as amended on April 28, 2022, which became effective by publication in the Federal Gazette on June 27, 2022 ("GCGC 2022"), and will continue to comply with them in the future, with the following exceptions:
The report of the Supervisory Board for the 2022 financial year states how many meetings of the Supervisory Board were held in person or as video or telephone conferences. This information is missing for the Supervisory Board committees. Due to an oversight, this information was not included when the Supervisory Board report was prepared. The Audit Committee held its six meetings in the 2022 financial year as video conferences. The Personnel and Compensation Committee held its five meetings in the 2022 financial year as video conferences. The Nomination Committee held its two meetings in the 2022 financial year as video conferences. In future, the Supervisory Board of Cherry SE intends to include this information in the report of the Supervisory Board.
Cherry SE attaches great importance to also taking sustainability-related objectives into account appropriately in the corporate strategy and corporate planning. The sustainability-related objectives require careful coordination between the Management Board and the Supervisory Board before they can also be included in the internal control system and the risk management system in a next step. In the 2022 fiscal year, the Management Board adopted a sustainability strategy as part of the corporate strategy, which is explained for the first time in Cherry SE's Sustainability Report 2022. Since the full implementation of the recommendation is time-consuming, it is not yet complied with. Nevertheless, the internal control system and the risk management system of Cherry SE are to be extended to sustainability-related goals in the future.
Munich, January 13, 2024
The Management Board
The Supervisory Board"
The Declaration of Compliance is available on the Company's website at https://ir.cherry.de/home/corporate-governance/#declaration-of-compliance.
The remuneration system for the members of the Management Board of the Company approved by the Annual General Meeting on June 8, 2022 pursuant to Section 87a AktG and the resolution adopted by the Annual General Meeting pursuant to Section 113 (3) AktG regarding the remuneration of the members of the Supervisory Board of the Company have been made publicly accessible on the Company's website at https://ir.cherry.de/home/corporate-governance/#remuneration. The remuneration report and the auditor's
report pursuant to Section 162 AktG will also be made publicly available at the same internet address.
Sustainability is a strategically relevant topic at Cherry SE, which is to be integrated in the business model with the respective impacts on the economic, ecological, and social environment. An ongoing dialog with sustainability stakeholders is considered both relevant and important. On the one hand, this involves requirements, expectations, and information flowing into the Company from the outside and, on the other hand, the Company itself communicating information to the outside.
In fiscal year 2022, a sustainability strategy was adopted by the Management Board as part of the corporate strategy. In the area of the environment, the strategic sustainability goals include in particular the reduction of greenhouse gas emissions, the use of renewable energies, the use of sustainable materials and the promotion of a sustainable supply chain. In the social area, the sustainability strategy is intended to meet the needs and expectations of the most important stakeholders. The second focus here is a comprehensive consideration of people, taking into account human rights, diversity, occupational safety, and corporate values and culture. Another focus is on product safety and product quality as well as data security and data protection. The governance area covers the focal points of compliance, risk management and corporate governance. These topics will be reported on separately in an annual non-financial report (referred to as a Sustainability Report). The sustainability reports are available on the company's website at https://ir.cherry.de/home/corporate-governance/ under Sustainability Reports.
From its humble beginnings as a family business founded by Walter Cherry in 1953, the Company has grown to become an international leader in the field of computer input devices. The Cherry brand is synonymous with outstanding quality, innovation, and technological expertise in a spirit of open, fair partnership.
Legality is one of the Company's steadfast values and of elementary importance to society. Cherry SE expects its employees to comply fully with all legal requirements at all times and any violations of applicable law will not be tolerated. The principle of "zero tolerance" applies at all times. To underline the importance of this principle, Cherry SE has stated its position regarding legal requirements and ethical issues in its Code of Business Conduct. Cherry SE provides its employees with the Code of Business Conduct as a binding guide to ensure compliant behavior. It outlines the basic standards to which the employees of Cherry SE and the Group are expected to adhere. Should employees of Cherry SE have any doubts in individual cases as to whether a decision complies with the requirements of the Code of Business Conduct, they are requested to ask their manager or the Compliance Officer in their country for advice.
The Code of Business Conduct was published in December 2022 and is available on the Cherry SE website at https://www.cherry-world.com/code-of-business-conduct.
The Code of Business Conduct of Cherry SE defines the lawful conduct of all employees of the Cherry Group and the responsibility of each employee to protect the reputation of the enterprise as elementary principles. The Code of Business Conduct contains rules and explanations on the following topics:
Mutual respect and anti-discrimination
Human rights, child labor, and forced labor
The employees of the Cherry Group are regularly informed on current issues relating to the Code of Business Conduct and made aware of individual topics through suitable training.
If employees have any questions or suspicions, they can contact their line manager or the Compliance department at any time.
Corporate activity is constantly exposed to risks that can be detrimental to achieving the objectives of the enterprise. For this reason, Cherry has implemented a risk management system for the purpose of identifying and counteracting any risks potentially capable of negatively impacting or jeopardizing the enterprise as swiftly as possible.
Cherry also has an efficient planning and reporting system in place, as well as a tool for monitoring product and customer profitability. Monthly, weekly, and daily reports provide regular information on the Cherry Group's net assets, financial position, and results of operations. In order to assess risks, corporate planning considers alternative scenarios for the possible development of the Group's individual subsidiaries as well as for the enterprise as a whole. Liquidity and outstanding receivables are monitored on the basis of regular assessments and reports.
Analyses of the market and the competition serve to make risks more transparent. Moreover, regular internal meetings ensure that risks can be identified promptly and managed in an appropriate manner.
Business and financial developments as well as any potential risks and possible countermeasures are all discussed at regular fortnightly management meetings, monthly financial meetings with the Group's subsidiaries, and Supervisory Board meetings (at least at least twice every half calendar year), as well as at monthly meetings of the Audit Committee. In addition, regular conference calls (bi-weekly) are held between the Chairman of the Supervisory Board and the Chairman of the Management Board as well as between the Chairman of the Audit Committee and the CFO and monthly update calls are held between the Supervisory Board and the Management Board to discuss any undesirable developments and risks that may arise.
Internal control mechanisms include strict compliance regulations and the use of dual control principles. Further, the possibility to comprehensive risk limitation by means of appropriate hedging instruments is part of the internal control mechanisms; in the fiscal year 2023, Cherry SE engaged in suitable hedging transactions.
As a basic principle, the Cherry Group cultivates an open risk culture. Any potential risks, whether existing or anticipated, are dealt with in a timely manner, including in particular any threats resulting from the advance of digitalization. With this point in mind, Cherry places great emphasis on measures such as targeted training designed to mitigate cyber risks and defend against hacker attacks.
Since December 13, 2022, the Company has operated as Cherry SE and, pursuant to Art. 38 lit. b) of Council Regulation (EC) No. 2157/2001 dated October 8, 2001 on the Statute for a European company (SE) ('SE Regulation'), has a two-tier system consisting of the Management Board as the executive body and the Supervisory Board as the monitoring body. Tasks and responsibilities are clearly divided between the Management Board and the Supervisory Board.
The members of the Management Board are required to manage the business with the due care and diligence of a prudent and conscientious manager in accordance with applicable law, the GCGC, the Articles of Association and the Management Board's Rules of Procedure. The Management Board of Cherry SE comprised three members in the fiscal year 2023 appointed by the Supervisory Board. Oliver Kaltner serves as Chairman of the Management Board. The Management Board is governed by the Rules of Procedure issued by the Supervisory Board and the Schedule of Responsibilities for the allocation of duties attached thereto as an annex. The members of the Management Board are individually accountable for managing their areas of responsibility.
Notwithstanding the allocation of duties, a resolution of the full Management Board is required in matters for which the law, the Articles of Association of Cherry SE, or the Rules of Procedure require a decision by the full Management Board.
The Management Board is required to hold regular meetings, which are convened by the Chairman of the Management Board. Meetings must also be held if the welfare of the Company so requires or if a member of the Management Board requests that a meeting be convened, stating the subject matter of the meeting.
The Management Board adopts resolutions by a simple majority of the votes of its members, unless otherwise required by law. In the event of a tie, the Chairman of the Management Board has the casting vote.
The members of the Management Board are required to act solely in the best interests of the Company. In making their decisions, they may neither pursue personal interests nor exploit business opportunities relating to the Company for themselves, for a natural person or legal entity closely associated with them, or for any other institution or association in which or for which they work.
Article 9 of the Articles of Association of Cherry SE stipulates that the Management Board may only undertake the following transactions and measures with the prior approval of the Supervisory Board:
Furthermore, in the Rules of Procedure for the Management Board, the Supervisory Board has defined additional matters, the implementation of which require the express prior approval of the Supervisory Board. These include the following transactions and measures:
The Supervisory Board of Cherry SE may also make further transactions or measures subject to approval (see also section D.III).
2. Composition of the Management Board
On December 31, 2023, the Management Board of Cherry SE comprised the following members:
Oliver Kaltner (born 1968)
Dr. Mathias Dähn (born 1967)
Dr. Udo Streller (born 1967)
The curricula vitae of the incumbent members of the Management Board are published and regularly updated on the Company's website at https://ir.cherry.de/home/equity-story/#management-board.
3. Age limit
The Rules of Procedure for the Management Board of Cherry SE stipulate that no member may be older than 67 years.
4. Long-term succession planning
Together with the Management Board, the Supervisory Board of Cherry SE ensures that a long-term
succession plan is in place. The planning is based on discussions with members of the Management Board and impressions of executives presented at meetings of the Cherry SE Supervisory Board. The method enables the Supervisory Board of Cherry SE to form an impression of potential successors within the Group.
The Supervisory Board of Cherry SE comprises seven members according to the Articles of Association. The Chairman of the Supervisory Board is Marcel Stolk. The Supervisory Board appoints the members of the Management Board of Cherry SE and advises the Management Board on the proper management of the Company. The Supervisory Board and the Management Board have jointly established Rules of Procedure.
The Supervisory Board of Cherry SE conducts its business in accordance with the law, taking into account the provisions of the Articles of Association and the Rules of Procedure. The Supervisory Board of Cherry SE and its individual members also follow the recommendations of the GCGC. The Supervisory Board works closely and in a spirit of trust with the Management Board in the best interest of the Company.
The Supervisory Board of Cherry SE convenes at least twice per calendar half-year. As a rule, resolutions are passed during these meetings. The Supervisory Board is quorate if at least half of the members of which the Board is required to consist, and in any event at least three members, participate in the adoption of resolutions. The resolutions of the Supervisory Board are adopted by a simple majority of the votes cast, unless otherwise required by law. Abstentions are not considered as votes cast in this context. If a vote within the Supervisory Board results in a tie, any Supervisory Board member is entitled to demand a new vote on the same issue. If the renewed vote also results in a tie, the Chairman of the Supervisory Board shall have the casting vote. The Deputy Chair of the Supervisory Board does not have this right.
Each member of the Supervisory Board is required to disclose to the Supervisory Board any existing and/or potential conflicts of interest, in particular those that may arise due to the exercising of a consulting or board function with customers, suppliers, lenders, or other business partners.
The Supervisory Board is required to form an Audit Committee, a Nomination Committee, and a Personnel and Compensation Committee from among its members.
The Supervisory Board's Rules of Procedure, which contain detailed provisions on convening and holding Supervisory Board meetings as well as on the formation of its committees, are available on the Cherry SE website at https://ir.cherry.de/home/corporate-governance/#rules-of-procedure-of-the-supervisory-board.
2. Composition of the Supervisory Board
In fiscal year 2023, the following people were members of the Supervisory Board of Cherry SE:
Marcel Stolk (born 1967)
James Burns (born 1964)
Joachim Coers (born 1965)
Heather Faust (born 1979)
Steven M. Greenberg (born 1970)
Tariq Osman (born 1978)
Charlotte Hovmand Johs (*1964)
Dino Sawaya (born 1983)
The curricula vitae of the incumbent members of the Supervisory Board are published and regularly updated on the Cherry SE website at https://ir.cherry.de/home/equity-story/#supervisory-board.
The Rules of Procedure for the Supervisory Board of Cherry SE stipulate that Supervisory Board members may not hold office for longer than the end of the Annual General Meeting following their 72nd birthday.
The Supervisory Board of Cherry SE regularly assesses the efficiency of its work. In addition to the qualityrelated criteria defined by the Supervisory Board, the efficiency assessment focuses primarily on the Supervisory Board's procedures and the provision of sufficiently detailed information to the Supervisory Board in a timely manner. A self-assessment with the support of external advisors was performed in 2022 and completed in 2023.
The Supervisory Board conducts the self-assessment in an open discussion at a meeting of the full Supervisory Board. A company-specific questionnaire covering the essential aspects required for a selfassessment serves as a basis for the discussion.
The results of the self-assessment and any measures to be derived from it were discussed in detail by the Supervisory Board in 2023. Overall, the structure and composition of the Supervisory Board, including the structure of its committees, were assessed as effective and efficient. The organization and conducting of the meetings were judged to be efficient and the number of meetings was considered adequate. Further, the governance of the Supervisory Board and delegation to the committees were considered effective. A fundamental need for change was therefore not apparent. However, to further improve its efficiency and procedures, the Supervisory Board agreed to implement new digital solutions for the preparation and consummation of the meetings while also promoting in-person meetings. In addition, the Supervisory Board is committed to further improve diversity and retain an adequate overall mix of experience, skills and professional background in the Supervisory Board.
To increase the efficiency of its activities and in accordance with the statutory provision of Section 107 (4) sentence 1 AktG and the requirements of the GCGC, the Supervisory Board of Cherry SE has established an Audit Committee. In fiscal year 2023, the Audit Committee of Cherry SE comprised the four members James Burns, Heather Faust, Dino Sawaya and Joachim Coers. The Chairman of the Audit Committee is James Burns. Thus, the Supervisory Board ensured, taking into account the principles of modern governance and the expectations of institutional investors, that the Audit Committee of Cherry SE consists of a majority of independent members.
James Burns has expertise in financial accounting and auditing due to his Bachelor's degree in accounting and his years as an auditor with Ernst \& Young where he earned his title as Certified Public Accountant (CPA), as well as a controller and CFO of both public and private companies. He has also been actively involved in sustainability reporting as part of his previous roles and regularly participates in the Silicon Valley Director Exchange in order to keep informed of current developments. In this context, James Burns has, among other things, participated in several workshops on sustainability in relation to environmental, social and governance (ESG) aspects. James Burns has vast experience in internal controls and risk management from his roles at Hewlett-Packard and Silver Spring Networks. Heather Faust holds a Master's degree in Business Administration and, due to her many years of experience as a managing partner and investment professional at various private equity firms, also has expertise in financial accounting. Dino Sawaya has expertise in the field of financial accounting and auditing due to his many years of experience as an analyst in investment banking at Deutsche Bank, where he was regularly involved in interpreting, auditing and analyzing in detail complex financial statements for multi-national corporations. Dino Sawaya built upon this accounting expertise subsequently as a global private equity investor at both CHAMP Private Equity and Argand Partners, where he also gained specialized expertise in assessing and improving internal control regimes, risk management protocols and internal reporting processes, particularly in complex companies with international operations. Until his departure, Joachim Coers was a further member of the Audit Committee with expertise in the fields of financial accounting and auditing.
The Audit Committee is responsible for monitoring the financial reporting process, the effectiveness of the internal control system, the risk management system, the internal audit system, and the audit of the financial statements, including in particular the selection and independence of the auditor and the additional services provided by the auditor. The Audit Committee discusses the assessment of audit risk, the audit strategy and audit planning, and the audit findings with the Auditor. The Chairman of the Audit Committee, James Burns,
also regularly discusses the progress of the audit with the auditor outside meetings and reports to the Committee accordingly. The Audit Committee regularly confers with the auditor, also without the participation of the Board of Management, and may make recommendations or suggestions to ensure the integrity of the financial reporting process. Furthermore, the Audit Committee monitors and reviews the compliance management system and the compliance measures taken by the Management Board and deals with any compliance cases in which the Management Board is personally involved. Moreover, it makes decisions on behalf of the Supervisory Board regarding the approval of contracts (with the exception of employment or service contracts), other legal transactions, and investments up to the limit of twice the amount that can, in certain cases, trigger the approval requirement under the Management Board's Rules of Procedure.
In fiscal year 2023, the Cherry SE Nomination Committee comprised three members until May 17, 2023, and since then generally two members. The Chairman of the Nominating Committee is Steven M. Greenberg and the other members were Dino Sawaya and Tariq Osman until May 17, 2023. By resolution of the Supervisory Board in October 2023, the Nomination Committee was temporarily expanded to five members until the next Annual General Meeting in order to avoid the appearance of conflicts of interest. Charlotte Hovmand Johs, Joachim Coers and Heather Faust were elected as temporary members of the Nomination Committee.
The Nomination Committee meets as often as required and proposes suitable candidates to the Supervisory Board for its election proposals to the Annual General Meeting. Any proposals take into account the Company's international operations, any potential conflicts of interest, and diversity. The Nomination Committee also prepares the regular efficiency assessment of the Supervisory Board and assists the Chairman regarding internal matters of the Supervisory Board.
In fiscal year 2023, the Cherry SE Personnel and Remuneration Committee comprised four members, namely Heather Faust (Chairwoman), Marcel Stolk, Joachim Coers, and Tariq Osman until May 17, 2023, since June 6, 2023, Charlotte Hovmand Johs. The Supervisory Board thus ensures that, in addition to the Audit Committee, the Personnel and Compensation Committee also comprises a majority of independent members.
The Personnel and Compensation Committee meets as often as required, determines and assesses the remuneration systems for the members of the Management Board, and proposes them to the shareholders for approval. The Personnel and Compensation Committee proposes specific targets and reviews the annual achievement of the short-term incentive and long-term incentive targets. These targets for the Management Board also include environmental, social and governance targets (ESG targets) to ensure that the supervision of the Supervisory Board includes sustainability aspects in accordance with the requirements of the German Corporate Governance Code. The Personnel and Compensation Committee reviews and, if necessary, proposes adjustments to the remuneration of the members of the Management Board. Furthermore, the Personnel and Compensation Committee proposes internal and external candidates for the potential succession of Management Board members and oversees any selection process for the appointment of further or new Management Board members. The Personnel and Compensation Committee decides on behalf of the Supervisory Board on the granting of approval to appoint new senior executives of the Cherry Group with an annual remuneration up to the limit of twice the amount that can, in certain cases, trigger the approval requirement under the Rules of Procedure for the Management Board.
The Supervisory Board of Cherry SE endeavors to achieve sufficient diversity in terms of personality, gender, internationality, professional background, expertise, experience, and age.
In the process of selecting and nominating candidates for Supervisory Board membership, the Supervisory Board and the Nomination Committee take into account both the composition targets and the requirements set out in the competence profile and the diversity concept. In the opinion of the Supervisory Board, its current composition meets the composition targets and fulfills the requirements of both the competence profile and the diversity concept. The members of the Supervisory Board possess all the professional and personal qualifications deemed necessary. In their entirety, they are familiar with the sector in which Cherry operates and possess the knowledge, skills, and experience essential to both the Company and the Group, including in the area of sustainability. A considerable proportion of Supervisory Board members either work internationally or have many years of international experience.
More than half of the shareholder representatives on the Supervisory Board are required to be independent of the Company and the Management Board as defined in the GCGC. Furthermore, at least two shareholder representatives are required to be independent of a controlling shareholder as defined in the GCGC. In the opinion of the Supervisory Board of Cherry SE, all its members are independent of both the Company itself and the Management Board. Moreover, Marcel Stolk, James Burns, Steven M. Greenberg, and Charlotte Hovmand Johs constitute four members of the Supervisory Board who are independent of a controlling shareholder. The Supervisory Board is therefore composed of what it considers to be an appropriate number of independent members. The Chairman of the Audit Committee, James Burns, is independent of the Company, the Management Board, and the controlling shareholder, and the Chairwoman of the Personnel and Compensation Committee, Heather Faust, is independent of the Company and the Management Board as defined in Recommendation C. 10 GCGC. Furthermore, the Supervisory Board takes into account the expectations of institutional investors and the principles of modern governance in that both the Audit Committee and the Personnel and Compensation Committee of the Supervisory Board of Cherry SE comprised a majority of independent members until the departure of Joachim Coers from the Supervisory Board. The Supervisory Board is seeking to fill the vacant Supervisory Board position with an independent member.
In accordance with Recommendation C. 1 GCGC, the Supervisory Board is required to specify concrete objectives for its composition and develop a competence profile for the entire body, paying due attention to the topic of diversity. The competence profile should also include expertise regarding sustainability issues of importance to the Company. Taking into account Recommendation C. 1 GCGC, the Supervisory Board of Cherry SE has drawn up corresponding objectives for its composition and developed a competence profile.
The Supervisory Board as a whole is required to have competences that are deemed essential in view of Cherry SE's activities, including in particular in-depth experience and knowledge in the following:
In addition, pursuant to Art. 9 (1) lit. c) SE Regulation in conjunction with Section 100 (5) AktG, at least one member of the Supervisory Board of Cherry SE must have expertise in the area of accounting and financial reporting and at least one other member of the Supervisory Board must have expertise in the area of auditing. Moreover, the members of the Supervisory Board in their entirety must be familiar with the sector in which Cherry SE operates. The Chairman of the Audit Committee, James Burns, has expertise in both accounting/financial reporting and auditing. The members of the Audit Committee also have relevant expertise, namely Heather Faust in the areas of accounting/financial reporting and Dino Sawaya in the areas of both accounting/financial reporting and auditing.
The following qualification matrix shows the implementation status of the competence profile:
| Marcel Stolk |
James Burns |
Heather Faust |
Steven-M. Greenberg |
Charlotte Hovmand Johs |
Dino Sawaya |
|
|---|---|---|---|---|---|---|
| Management of a large or medium- sized international company |
$\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | |
| Industrial business and along the value chain |
$\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ |
| Research and development | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ |
| Production, marketing, sales, and digitalization |
$\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ |
| Major markets | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ |
| Accounting/financial reporting, audit of financial statements |
$\checkmark$ | $\checkmark$ | $\checkmark$ | |||
| Controlling and risk management | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | |
| Governance and compliance | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ |
| Sustainability (environmental and social) |
$\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ | |
| Independence | $\checkmark$ | $\checkmark$ | $\checkmark$ | $\checkmark$ |
In accordance with statutory provisions, the Articles of Association and the Rules of Procedure of the Supervisory Board and the Management Board, the Management Board is required to report to the Supervisory Board of Cherry SE as well as at the request of the Supervisory Board in certain cases. Management Board reports must be prepared with due care and provide a true representation of the situation.
At least once a year, the Management Board is required to report on its intended business policy and other fundamental issues of corporate planning for both the Company and the Group as a whole. This also includes aspects of the sustainability strategy and its implementation, in particular with respect to the targets set forth by the Personnel and Compensation Committee for the remuneration of the Management Board.
In connection with the Supervisory Board's resolution on the annual financial statements and the consolidated financial statements (the so-called "balance sheet meeting"), the Management Board is required to report on the profitability of both the Company and the Group, in particular on the return on equity.
The Management Board is required to report regularly, at least quarterly, on the course of business, in particular on revenue and the situation of the Company and the Group. This includes reporting on the current development of the results of operations, financial position and net assets, personnel development, significant risks to the Group and individual Group units, and compliance.
The Management Board is also required to report to the Supervisory Board on other key matters in a prompt manner. The Management Board's Rules of Procedure also set out further requirements regarding its reporting to the Supervisory Board.
The Management Board is required to report on all transactions that may be of significance regarding the profitability or liquidity of the Company and/or the Group. As a rule, these reports are to be submitted in text form and, to the extent possible, in sufficient time to give the Supervisory Board the opportunity to comment on them before the business is transacted.
Article 9 of the Articles of Association of CherrySE stipulates that the Management Board may only undertake certain transactions and measures with the prior approval of the Supervisory Board. In the Management Board's Rules of Procedure, the Supervisory Board of CherrySE has determined further transactions or types of transaction that require the prior approval of the Supervisory Board (for transactions requiring approval, see the above section D.I.1). The Supervisory Board may grant approval for a specific category of transactions on a revocable basis in general, or in advance if an individual transaction meets certain requirements.
I. Gender-related composition of the Supervisory Board, the Management Board, and executive levels below the Management Board
Pursuant to Section 111 (5) AktG, on June 14, 2021, the Supervisory Board set a target of at least 20\% for the proportion of female members on the Supervisory Board by no later than June 13, 2026. On June 14, 2021, the Supervisory Board also set a target of at least $20 \%$ for the proportion of female members on the Management Board by no later than June 13, 2026.
Pursuant to Section 76 (4) AktG, the Management Board has set a target for the proportion of women in the first executive level below the Management Board at a minimum of 10\% (this currently corresponds to 2 women), which must be achieved by the end of 2026. Cherry SE does not have a second executive level below the Management Board.
II. Diversity concept regarding the composition of the Management Board and the Supervisory Board of Cherry SE
In accordance with Recommendation C. 1 GCGC, the Supervisory Board of Cherry SE is endeavoring to achieve sufficient diversity in terms of personality, gender, internationality, professional background, expertise, experience, and age.
Moreover, in accordance with Recommendation B. 1 GCGC, the Supervisory Board of Cherry SE is giving due consideration to the topic of diversity in the composition of the Management Board.
A diversity concept has been drawn up for the Management Board and the Supervisory Board of Cherry SE, which is described below. Diversity is aspired to in terms of age, gender, education, professional background, and international experience.
A mixture of experience and new ways of thinking is required in order to serve on either the Supervisory Board or the Management Board. For this reason, the Management Board and the Supervisory Board of Cherry SE are required to consist of a mixture of experienced and new incoming members. The strategy will not only ensure an adequate transfer of knowledge, but also help to gain new insights.
The fundamental aim is to encourage a mixture of women and men on the Management Board and the Supervisory Board of Cherry SE and to consider whether the proportion of women on the two boards can be increased by the addition of suitable female candidates. Ultimately, however, expertise and the relevant qualifications are the decisive criteria for membership in both of these bodies.
At least one member of the Cherry SE Management Board is required to have experience in fields essential to the Company, including:
Management of a large or medium-sized company operating on an international basis
Industrial business and value creation involving various value chains
Furthermore, at least one member of the Management Board is required to have experience in the areas of corporate governance, law, compliance, and/or financial reporting and auditing to reflect the specific requirements of a capital market-oriented enterprise.
As a whole, the Supervisory Board of Cherry SE is required to have competences that are deemed essential to the activities of the Company, including in particular the experience and knowledge described in the competence profile of the Supervisory Board (see section D.II.10).
At least one member of the Supervisory Board will be required to have expertise in the field of accounting/financial reporting and at least one further member must have expertise in the field of auditing. Furthermore, the members of the Supervisory Board as a whole must be familiar with the sector in which Cherry AG operates.
As an international company, Cherry SE operates in a variety of markets worldwide. The members of the Cherry SE Management Board need to have gained international experience through their origin, their education, or their professional career.
An appropriate number of members of the Supervisory Board of Cherry SE must also have gained experience in internationally operating companies as a result of their education or their professional activities.
The diversity concept for the Management Board is being implemented in the process of appointing its members. The Supervisory Board and the Personnel and Compensation Committee are required to take into account the prerequisites set out in the diversity concept for the Management Board when selecting or proposing candidates for appointment to the Management Board.
In its current composition, the Management Board meets the key requirements of the diversity concept. All in all, the members of the Management Board possess a broad range of knowledge and experience as well as educational and professional backgrounds and also have the requisite international experience. The Management Board as a whole possesses all the knowledge and experience deemed essential for the proper management of the Company's operations.
In the process of selecting and nominating candidates for Supervisory Board membership, the Supervisory Board and the Nomination Committee take into account the composition targets and the requirements set out in the competence profile and the diversity concept. In the opinion of the Supervisory Board, its current composition meets the composition targets and fulfills the requirements of both the competence profile and the diversity concept. The members of the Supervisory Board possess all the professional and personal qualifications deemed necessary. In their entirety, they are familiar with the sector in which Cherry operates and possess the essential knowledge, skills, and experience. A considerable proportion of Supervisory Board members either work internationally or have many years of international experience.
Cherry SE prepares its consolidated financial statements and interim financial statements in accordance with International Financial Reporting Standards (IFRS) as applicable within the European Union. After preparation by the Management Board, the financial statements are audited by the auditor elected by the Annual General Meeting. The election proposal of the Supervisory Board is preceded by a recommendation from the Audit Committee. For fiscal year 2024, the recommendation will be based on a tendering and selection process conducted in accordance with statutory requirements. Based on the audit reports and the documents relating to the consolidated financial statements, the Supervisory Board approves the consolidated financial statements, subject to a preliminary review by its Audit Committee if deemed necessary. The consolidated financial statements are then adopted accordingly. The Management Board discusses interim statements and half-year reports with the Audit Committee of the Supervisory Board of Cherry SE prior to publication.
Cherry SE places great importance on the uniform, comprehensive, and prompt disclosure of information. Cherry SE reports on its business performance and results in the form of annual reports, quarterly statements, and half-year reports, as well as at the annual analysts' and investors' conference and by means of regular conference calls. It also provides information in the form of press releases and ad hoc announcements as well as other mandatory publications to the extent required by law. Cherry SE maintains insider lists. The respective persons concerned either have been, or will be, informed of the legal obligations and sanctions.
Pursuant to Article 19 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council dated April 16, 2014 on market abuse, the members of the Management Board and the Supervisory Board as well as any persons closely associated with them are required to notify Cherry SE of any proprietary transactions in shares, debt instruments, and related derivatives or other financial instruments. The directors' dealings transacted in the year under report are available at https://ir.cherry.de/home/corporate-governance/#directors-dealings.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.