Governance Information • Mar 23, 2023
Governance Information
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The Supervisory Board and the Management Board are committed to responsible management that is focused on achieving a sustainable increase in the value of the Company. Long-term corporate strategies, solid financial management, strict adherence to legal and ethical business standards, and transparency in corporate communication are key factors.
In this Corporate Governance Declaration, the Supervisory Board of Fresenius SE & Co. KGaA and the Management Board of the general partner of Fresenius SE & Co. KGaA, Fresenius Management SE (Management Board), report on corporate management pursuant to Sections 289 f and 315d of the German Commercial Code (HGB) and on the corporate governance of the Company and the Group pursuant to the German Corporate Governance Code. The Corporate Governance Declaration is published on our website, see www.fresenius.com/corporate-governance.
The Company has the legal form of a KGaA (Kommanditgesellschaft auf Aktien – partnership limited by shares). The Annual General Meeting, the Supervisory Board, and the general partner Fresenius Management SE are the legal
corporate bodies. There have been no changes in the Group management and the supervision structure in the reporting period. The chart on the following page provides an overview of the Group structure.
The articles of association of Fresenius SE & Co. KGaA, which, in addition to legal provisions, further define the responsibilities of the individual corporate bodies, can be downloaded from our website, see www.fresenius.com/ corporate-governance.
STRUCTURE OF FRESENIUS SE & CO. KGAA
The shareholders uphold their rights at the Annual General Meeting, where they exercise their voting rights. Every ordinary share of Fresenius SE & Co. KGaA confers one vote. None of the shares carry multiple or preferential voting rights.
We report in detail on our investor relations activities in the "Fresenius share" section on page 23.
Our virtual Annual General Meeting (AGM) was held on May 13, 2022, in Bad Homburg vor der Höhe. Approximately 73% of the share capital was represented. As in the previous year, in order to protect the health of the shareholders as well as the employees and external partners involved in the organization, Fresenius took advantage of the option created by the legislator due to the COVID-19 pandemic to hold the Annual General Meeting virtually. The shareholders elected Ms. Susanne Zeidler and Dr.Christoph Zindel as new shareholder representatives to the Supervisory Board of Fresenius SE & Co. KGaA with a majority of over 97% and over 99%, respectively, and appointed Susanne Zeidler as member of the Joint Committee. With a majority of 90%, the Annual General Meeting approved a 2021 compensation report for the Management Board of the General Partner.
During the AGM, the shareholders approved the proposal made by the general partner and the Supervisory Board to increase the 2021 dividend by 5% to €0.92 per ordinary share with a majority of more than 99% of the votes cast. The shareholders also resolved, with a majority of around
1 For selected items no voting power, e.g., election of Supervisory Board of Fresenius SE & Co. KGaA, discharge of general partner and Supervisory Board of Fresenius SE & Co. KGaA, election of the auditor
89%, a new Authorized Capital I in the amount of €125 million. They also resolved, by a majority of around 95%, a new authorization to issue bonds with warrants and/or convertible bonds and the creation of a new Conditional Capital III. In addition, the shareholders resolved, by a majority of around 93%, a new authorization to acquire and use treasury shares in accordance with Section 71 (1) No.8 AktG and to exclude subscription rights. With a majority of around 96%, they also resolved a new authorization to use equity derivatives in the acquisition of treasury shares with possible exclusion of any tender rights. Shareholder majorities of around 99% and 93%, respectively, approved the actions of the general partner and the Supervisory Board in 2021.
With regard to certain subject matters, legally required voting right exclusions exist for the general partner and for its sole shareholder, the Else Kröner-Fresenius-Stiftung. These pertain, for example, to the appointment of the Supervisory Board of Fresenius SE & Co. KGaA, the approvals of the actions of the general partner and the members of the Supervisory Board, and the selection of the auditor. This guarantees that the remaining shareholders retain the sole authority to decide on these matters, especially those that pertain to the supervision of management.
Documents and information on the Annual General Meeting, as well as the voting results, are available on our website at www.fresenius.com/annual-general-meeting.
The responsibilities are distributed as follows in Fresenius SE & Co. KGaA: the Management Board of the general partner is responsible for conducting the business of Fresenius SE & Co. KGaA. The Supervisory Board of Fresenius SE & Co. KGaA supervises the management of the Company's business by the general partner.
The general partner, Fresenius Management SE, represented by its Management Board, manages Fresenius SE & Co. KGaA at its own responsibility and conducts its business. The Management Board formulates the Company's strategy, discusses it with the Supervisory Boards of Fresenius Management SE and Fresenius SE&Co. KGaA, and oversees its implementation. Its actions and decisions are aligned with the best interests of Fresenius SE & Co. KGaA. The Management Board is committed to increasing the value of the Company on a sustainable basis. The rules of procedure for the Management Board were established by the Supervisory Board of Fresenius Management SE. They define the activities within the board more specifically, especially with regard to the individual duties and responsibilities of the members, matters reserved for the full Management Board, and resolutions to be passed by the full Management Board.
The Management Board, in principle, consists of seven members: the Chairman, the Chief Financial Officer, the Management Board Member responsible for Human Resources (Labor Relations Director), Risk Management
and Legal, and the chief executive officers of the four business segments. This ensures that the full Management Board is kept constantly informed about important events, plans, developments, and measures within the business segments. According to the rules of procedure, the CEO is responsible for coordinating the business segments, the general corporate policy, and the investment policy. The subject of Group sustainability is also directly reported to the CEO. Further information on sustainability matters can be found in the Group Non-financial Report on pages 101ff. The Group departments Finance, Group Controlling, Internal Audit, and Tax report to the Chief Financial Officer directly. Further, the Chief Financial Officer coordinates cybersecurity activities, IT and Corporate Real Estate Management at Fresenius.
Members of the Management Board also lead internal working groups or committees, for example the Risk Steering Committee or the Group Sustainability Board. Further information is included on pages 101ff. of the Group Non-financial Report.
There are no Management Board committees owing to Fresenius SE & Co. KGaA's role as an operating holding company. The Management Board is listed on page 408 of the Annual Report.
Members of the Management Board are appointed for a maximum period of five years. Following the recommendation of the Code, first-time appointments are for a threeyear period.
Ms. Sara Hennicken was appointed member of the Management Board responsible for finance (CFO) as of September 1, 2022. She succeeds Rachel Empey, who left the company on August 31, 2022. Rice Powell left the Executive Board effective September 30, 2022. As of October 1, 2022, the Management Board member responsible for the
Fresenius Kabi business segment, Mr. Michael Sen, was appointed Chairman of the Management Board of Fresenius Management SE. He succeeds Mr. Stephan Sturm, who left the Company as of September 30, 2022. Mr. Michael Sen will also continue as Chairman of the Management Board of Fresenius Kabi Aktiengesellschaft until his succession there has been settled. Dr. Carla Kriwet was appointed as a member of the Management Board for the business segment Fresenius Medical Care as of October 1, 2022 and resigned as of December 5, 2022. Ms. Helen Giza was appointed as member of the Management Board of Fresenius Management SE responsible for the business segment Fresenius Medical Care as of December 6, 2022.
A standard age limit is in place for the Management Board of Fresenius Management SE: newly appointed members of the Management Board shall, as a rule, retire from the Management Board at the end of the calendar year after reaching the age of 65.
The meetings of the Management Board are convened as required, but at least once a month, and are chaired by the Chairman of the Management Board or, if he is incapacitated, by the Chief Financial Officer or, if she is also incapacitated, by the Management Board member present who is most senior in age. However, Management Board meetings are usually held twice a month. The person chairing the meeting decides the order in which the items on the agenda are dealt with and the form in which the voting is conducted. The Management Board passes its resolutions by a simple majority of the votes cast or, outside its meetings, by a simple majority of its members, except in cases where mandatory provisions of law or the articles of association of Fresenius Management SE impose stricter requirements. The
Chairman of the Management Board has the casting vote if a vote is tied. If the Chairman is incapacitated or absent, the motion is deemed rejected if a vote is tied. The rules of procedure for the Management Board also govern the relations between the Management Board and the Supervisory Board of the general partner, as well as between the general partner and the Supervisory Board of Fresenius SE & Co. KGaA, and also matters that require approval of the general partner's Supervisory Board.
As a European company (SE – Societas Europaea), Fresenius Management SE has its own Supervisory Board. It consists of six members, and its Chairman is Dr. Gerd Krick. The Supervisory Board appoints the members of the Management Board of Fresenius Management SE and supervises and advises the Management Board in conducting business. If necessary, e.g., in order to discuss or decide on matters concerning the Management Board, the Supervisory Board meets without the Management Board. It has established its own rules of procedure.
The Supervisory Board members of Fresenius Management SE can be found on page 409 of the Annual Report. The Supervisory Board of Fresenius Management SE appoints the members of the Management Board of the general partner and also ensures long-term succession planning. This is based on discussions with members of the Management Board and impressions of other managers gained at the meetings of the Supervisory Boards of Fresenius Management SE and Fresenius SE & Co. KGaA. In this way, the Supervisory Board can form an opinion on potential successors from within the Company.
Information on the compensation of the Management Board and Supervisory Board of Fresenius Management SE can be found here:
The Supervisory Board of Fresenius SE & Co. KGaA
The Supervisory Board of Fresenius SE & Co. KGaA supervises the management of the Company's business by the general partner Fresenius Management SE. It supervises business operations to ensure that the Management Board's corporate decisions are compliant, suitable, and financially sound. In addition, the Supervisory Board reviews the Group's annual financial statements, taking into account the auditor's reports. Another important part of the Supervisory Board's activities is the work conducted within the committees formed in accordance with the requirements of the German Stock Corporation Act and the recommendations of the Code. The Management Board of the general partner – Fresenius Management SE – continuously informs the Supervisory Board of the corporate development, planning, and strategy.
The Supervisory Board of Fresenius SE & Co. KGaA consists of 12 members. The Supervisory Board members can be found on page 406f. of the Annual Report. Half of its members are elected by the AGM. The proposals for the members of the Supervisory Board primarily take account of the knowledge, ability, and expert experience required to
perform the tasks. The election proposals provided by the Supervisory Board will reflect its designated objectives as well as its profile of expertise and skills. A Nomination Committee has been instituted for election proposals for the shareholder representatives. Its activities are aligned with the provisions of law and the Code. The European Works Council elects the employee representatives to the Supervisory Board of Fresenius SE & Co. KGaA. If an employee representative retires within their term of office, the substitute member will become a member of the Supervisory Board. For the Supervisory Board of Fresenius SE & Co. KGaA, the law requires a quota of at least 30% women and 30% men. In 2022, the statutory quotas were met.
The Supervisory Board of Fresenius SE & Co. KGaA has a standard age limit: the Supervisory Board of Fresenius SE & Co. KGaA should generally only have members who have not yet reached the age of 75 at the time of their election or appointment. The average age on the Supervisory Board as of December 31, 2022 was around 61 years. All members have served an average of more than five years on the board.
The competencies and the expert knowledge of all members support the discussion and the information exchange within the board. In 2022, the objectives for the composition and profile of skills and expertise of the board were met. Further information can be found on pages 234ff. of the Annual Report.
The Supervisory Board of Fresenius SE & Co. KGaA fulfills its tasks in accordance with the provisions of law, the articles of association of Fresenius SE & Co. KGaA, and its rules of procedure. The Chairman is responsible for coordinating
the activities of the Supervisory Board, chairing the meetings, and representing its interests externally. The Supervisory Board should convene once each calendar quarter, and must convene twice each calendar half-year. The meetings are convened and chaired by the Chairman or, if he is incapacitated, by a chairperson named by the Chairman. The person chairing the meeting decides the order in which the items on the agenda are dealt with and the form in which the voting is conducted. Unless other majorities are mandatory by law, the Supervisory Board passes its resolutions by a simple majority of the votes submitted in the voting. If a vote is tied, the Chairman has the casting vote or, if he does not take part in the voting, the matter is decided by the vote of the Deputy Chairman, who is a shareholder representative. The shareholder representatives and the employee representatives within the Supervisory Board conduct separate preparatory meetings to the Supervisory Board meetings on a regular basis.
The articles of association of Fresenius SE & Co. KGaA and the rules of procedure of the Supervisory Board of Fresenius SE&Co. KGaA regulate the details with regard to the Supervisory Board's election, constitution, term of office, meetings and resolutions, and rights and duties. They are published on our website, see www.fresenius.com/ corporate-governance.
Information on the compensation of the Supervisory Board of Fresenius SE
▶ Compensation system of the Supervisory Board of Fresenius SE & Co. KGaA in accordance with Section 113 (3) of the AktG at www.fresenius.com/corporategovernance
▶ Compensation Report 2022 including the auditor's report pursuant to Section 162 AktG at www.fresenius.com/corporate-governance
The Supervisory Board of Fresenius SE & Co. KGaA is of the opinion that all its members are independent. The Supervisory Board shall include what it deems to be an appropriate number of independent members who do not have any business or personal relationship with the Company, its corporate bodies, a controlling shareholder, or a party related to the latter that may give grounds for a material and not merely temporary conflict of interest. This also applies to Klaus-Peter Müller, who had been a member of the Supervisory Board for more than 12 years before his retirement following the AGM on May 13, 2022. His performance in office demonstrates the necessary critical distance to properly advise and monitor the business conduct of the general partner in every respect.
The general partner, acting through the Management Board, and the Supervisory Board of Fresenius SE & Co. KGaA are committed to the interests of the Company. The members of these bodies neither pursue personal interests in the performance of their duties nor grant unjustified advantages to other persons. Any sideline activities or transactions of the members of the executive bodies with the Company must be disclosed to the Supervisory Board without delay and approved by the Supervisory Board. The Supervisory Board of Fresenius SE & Co. KGaA reports to the AGM on any conflicts of interest and their treatment. There were no conflicts of interest of Supervisory Board members in the past fiscal year.
Fresenius publishes information on related parties on page 393 f. of the Annual Report.
The members of the Supervisory Board independently take on necessary training and further education measures required for their tasks. They keep themselves regularly informed, through internal and external sources, about the latest requirements with regard to their supervisory activities. The Supervisory Board at all times ensures that its members are suitably qualified, keep their professional knowledge up to date, and further develop their judgment and expertise. They are supported appropriately by the Company in accordance with the Code. External experts as well as experts from the Company continuously provide information about important developments, for example about relevant new laws and precedents, or changes in the IFRS accounting and IFRS auditing standards. In particular, training on ESG reporting requirements was provided in fiscal year 2022. In addition, the Company offers an individual onboarding for new members of the Supervisory Board.
The members of the Supervisory Board of Fresenius SE & Co. KGaA can be found on page 406 f. of the Annual Report. On page 16f. of the Annual Report, the Supervisory Board reports on the main focuses of its activities and those of its committees in 2022.
The Supervisory Board of Fresenius SE & Co. KGaA carries out a self-assessment of how effectively it as a whole and its committees perform their duties, at least once a year, most recently in December 2022.
The review is carried out through a company-specific questionnaire covering the salient points for a self-evaluation followed by an open discussion within the full Supervisory Board. The most recent self-assessment showed that the Supervisory Board, including its committees, assesses its organization as well as its work as efficient and that it fulfills its tasks effectively.
Good corporate governance requires trusting and efficient cooperation between the Management and the Supervisory Board. The Management Board of the general partner and the Supervisory Board of Fresenius SE&Co. KGaA closely cooperate for the benefit of the Company. Open communication is essential. The common goal is to sustainably increase the company value in line with the corporate governance and compliance principles. The Management Board of the general partner and the Supervisory Board of Fresenius SE & Co. KGaA coordinate with each other, especially with regard to the Company's strategic focus. As the monitoring body, the Supervisory Board of Fresenius SE & Co. KGaA also needs to be fully informed about operating performance and corporate planning, as well as the risk situation, risk management, and compliance. The Management Board of the general partner provided this information in full and in compliance with its duties in the reporting period.
The representatives of the shareholders and of the employees may prepare the Supervisory Board meetings separately, and, if applicable, with members of the Management Board. Pre-meetings of the employee representatives as well as consultations of the shareholder representatives take place on a regular basis. The Supervisory Board meets without the Management Board on a regular basis.
The Supervisory Board of Fresenius SE & Co. KGaA has formed two permanent committees from among its members: the Audit Committee, consisting of five members, and the Nomination Committee, consisting of three members. The committee members were elected for the duration of their term as a member of the Supervisory Board of Fresenius SE& Co. KGaA. In accordance with the articles of association of Fresenius SE & Co. KGaA, only members of the Audit Committee receive additional compensation (Section 13 (4)). There is no Personnel Committee in the KGaA because the Supervisory Board of Fresenius SE&Co. KGaA is not responsible for appointing members of the Management Board of the general partner or for their service contracts. Responsibility for these personnel matters lies with the Supervisory Board of the general partner.
The provisions for the Supervisory Board of Fresenius SE & Co. KGaA apply analogously to the committees. The committees hold meetings as required. The meetings are convened by the committee chairmen. They report during the following Supervisory Board meeting about the work of the respective committee. The rules of procedure for the committees are regulated in the rules of procedure of the Supervisory Board of Fresenius SE & Co. KGaA. Accordingly, the committees do not have their own rules of procedure.
The members of the Supervisory Board's committees are listed on page 407 of the Annual Report.
The Audit Committee's function is, among other things, to prepare the Supervisory Board's approval of the financial statements – and the consolidated financial statements – and the Supervisory Board's proposal to the AGM on the appointment of the auditor for the financial statements, and to make a preliminary review of the proposal on the allocation of distributable profits. It also reviews the quarterly reports before they are published and – following discussions with the Management Board – engages the auditor for the financial statements (and concludes the agreement on the auditor's fees), determines the main focuses of the audit, and defines the auditor's reporting duties in relation to the Supervisory Board of Fresenius SE & Co. KGaA. Other matters within its remit are to monitor the quality of the audit of the financial statements and to review the effectiveness of the internal control system, of the risk management system, of the internal audit system, and of the compliance management system.
Since the meeting of the Supervisory Board on May 13, 2022, the Audit Committee has comprised Ms. Susanne Zeidler (Chair), Ms. Grit Genster, Mr. Wolfgang Kirsch, Mr.Konrad Kölbl, and Dr.Christoph Zindel. Mr. Bernd Behlert was elected as successor to Mr. Konrad Kölbl as of February 17, 2023. With Susanne Zeidler as Chair of the Audit Committee, Wolfgang Kirsch, and Dr. Christoph Zindel, three members of the Audit Committee have expertise in the area of accounting. This includes special knowledge and experience in the application of accounting principles and internal control and risk management systems.
Accounting also includes sustainability reporting and its auditing. With Susanne Zeidler as Chair of the Audit Committee, Wolfgang Kirsch, and Dr. Christoph Zindel, three members of the Audit Committee also have expertise in the field of auditing. This includes in particular knowledge and experience in the auditing of financial statements, including sustainability reporting and its auditing. More information on the expertise of the members of the Audit Committee in the areas of accounting and auditing is provided in the "Implementation of the objectives and competence profile" section on page 237. of the Annual Report.
Until the end of the Annual General Meeting on May 13, 2022, the members of the Audit Committee were Mr. Klaus-Peter Müller (Chair), Ms. Grit Genster, Mr. Wolfgang Kirsch, Mr. Konrad Kölbl, and Ms. Hauke Stars (until January 31, 2022), as well as Ms. Susanne Zeidler (from January 9, 2022).
The Audit Committee also examined in detail the nonaudit services rendered additionally by the auditor KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as well as PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main.
The Nomination Committee proposes suitable candidates to the Supervisory Board for the nominations it makes to the AGM for the election of Supervisory Board members on the shareholders' side. It consists solely of shareholder representatives. In making its proposals, the Nomination
Committee is guided by the requirements of the Code. Since the meeting of the Supervisory Board on May 13, 2022, the members of the Nomination Committee have been Mr. Wolfgang Kirsch (Chair), Mr. Michael Diekmann, and Ms. Susanne Zeidler. Until the end of the Annual General Meeting on May 13, 2022, the members of the Nomination Committee were Mr. Wolfgang Kirsch (Chairman), Mr. Michael Diekmann, and Mr. Klaus-Peter Müller.
Fresenius SE & Co. KGaA does not have a Mediation Committee because the provisions of the German Co-Determination Act that require such a committee do not apply to a partnership limited by shares and because the Code does not require such a committee either.
In the context of the capital increase from authorized capital to pay the stock dividend, the Supervisory Board formed the ad-hoc "Capital Increase Stock Dividend" committee and delegated to it the powers vested in the full Supervisory Board by law, the Articles of Association or the Rules of Procedure in connection with the stock dividend and the associated rights issue capital increase. The members of this committee were Mr. Wolfgang Kirsch (Chair), Ms. Grit Genster, and Ms. Susanne Zeidler. The committee was dissolved again after the completion of its tasks.
Pursuant to Sections 13a et seq of the Articles of Association of Fresenius SE & Co. KGaA, the Supervisory Board of Fresenius SE & Co. KGaA has formed a Joint Committee together with the Supervisory Board of Fresenius Management SE. For some matters, which are defined in further detail in Section 13c (1) of the articles of association of Fresenius SE & Co. KGaA, the general partner requires the approval of the Joint Committee if 40% of the consolidated sales, the consolidated balance sheet total, and the consolidated profit are affected by the matter. These include, for example, the divestiture and acquisition of large investments and business units or the divestiture of large business units from the assets of Fresenius SE & Co. KGaA or a wholly owned company. The approval of the Joint Committee is also required for certain legal transactions between Fresenius SE & Co. KGaA or its affiliates and the Else Kröner-Fresenius-Stiftung.
Since the end of the Annual General Meeting on May 13, 2022, the members of the Joint Committee have been Mr.Michael Diekmann and Ms. Susanne Zeidler. In addition, Dr. Dieter Schenk (Chairman) and Wolfgang Kirsch, who were delegated by the General Partner, are members of the committee. Until the end of the Annual General Meeting on May 13, 2022, the members of the Joint Committee were Mr. Michael Diekmann, Ms. Hauke Stars (until January 21, 2022), Ms. Susanne Zeidler (from 9 February, 2022), Mr. Wolfgang Kirsch and Dr. Dieter Schenk (Chair). The Joint Committee did not meet in the reporting year.
The Supervisory Board of Fresenius SE & Co. KGaA has determined concrete objectives for its composition. It further developed these existing objectives and drew them up together with a revised competence profile for the entire Board. This was adopted in December 2022. The status of implementation is disclosed in the form of a qualification matrix. The Supervisory Board has also adopted a diversity concept for itself and for the Management Board of Fresenius Management SE.
The Supervisory Board of Fresenius SE & Co. KGaA is to be composed in such a way that its members in entirety have the required knowledge, skills, and professional experiences for duly observing the tasks. Thereby, it is necessary to differentiate between the requirements for the individual Supervisory Board members and the requirements for the composition of the entire board.
The Supervisory Board members have to be professionally as well as personally qualified to advise and supervise the Management Board of a globally active healthcare Group.
Each Supervisory Board member is to have the knowledge of good corporate governance of a capital-market-oriented company required for duly observing its tasks. This includes knowledge of the main features of accounting, risk management, internal control mechanisms, and of compliance matters.
Each Supervisory Board member is to have general knowledge of the healthcare sector, as well as a basic understanding of the global activities of Fresenius.
A minimum of half of the Supervisory Board members and a minimum of the half of the shareholder representatives in the Supervisory Board are to be independent within the meaning of the German Corporate Governance Code. Independent in this meaning is someone who does not have a personal or business relationship with the Company, its governing bodies, a controlling shareholder, or a company affiliated with such that may cause a substantial and not merely temporary conflict of interest. The shareholder structure may be appropriately taken into account.
When assessing independence, in the view of the Supervisory Board, neither an appointment to the Management Board lapsed for more than two years nor the duration of the membership to the Supervisory Board exclude the classification as independent per se.
With regard to the employee representatives, the independence is not contested by the fact of representing employees nor by the employment relationship.
Individuals exercising an office in a body of a significant competitor of Fresenius or who hold, directly or indirectly, more than 3% of the voting capital in such are not to be a member of the Supervisory Board.
In cases where a Supervisory Board member is active for another company having business relationships with Fresenius, this activity is described in the "Legal relationships with members of the corporate bodies" section of the Annual Report.
Each Supervisory Board member is to have sufficient time available for duly observing the office as Supervisory Board member and to comply with the limit to the offices held as recommended by the German Corporate Governance Code. Under the assumption of, in the future, five meetings annually, the expected time expenditure of new members amounts to approximately 15 to 30 days a year. This includes the preparation and follow-up of the Supervisory Board's meetings, the review of reports to the Supervisory Board, the participation in the Annual General Meeting, and regular training. Thereby, it is to be considered that the time expenditure also depends on the membership of one or several Supervisory Board committees.
For the activities of the Supervisory Board of Fresenius SE & Co. KGaA, a balance between experience and new ways of thinking is important. Therefore, the Supervisory Board of Fresenius SE & Co. KGaA should have a balanced mix of experienced and new members. In this way, not only do different perspectives flow into the respective decisionmaking process, but a continuous transfer of knowledge is also promoted. As a rule, the Supervisory Board of Fresenius SE & Co. KGaA shall only include members who have not yet reached the age of 75 at the time of their election or appointment.
Requirements for the entire Supervisory Board
The Supervisory Board in its entirety needs to be familiar with the healthcare sector. An appropriate number of Supervisory Board members are to have in-depth knowledge and/or experience in the important sectors of the Company's operations:
The Supervisory Board is to include an appropriate number of members with management experience in the healthcare sector.
The Supervisory Board in its entirety needs to have financial knowledge, in particular in the fields of accounting, reporting, and auditing. In the future, at least one member needs to have expert knowledge in the fields of accounting and at least one other member needs to have expert knowledge in the field of auditing. The chair of the Audit Committee should be suitably expert in at least one of the two fields.
The Supervisory Board in its entirety should have expertise in sustainability issues of importance to the Company, particularly with regard to environmental, social, and governance (ESG) aspects.
The Supervisory Board in its entirety is to be familiar with the relevant legal issues, as well as relevant regulatory and compliance matters.
The Supervisory Board in its entirety is to have the required understanding of the requirements of digitalization.
Fresenius is present in more than 100 countries. Therefore, the Supervisory Board in its entirety is to have knowledge
and experience in the regions important for Fresenius. The Supervisory Board is to include an appropriate number of members with, due to their origin or business experience, a particular relation to the international markets relevant for Fresenius.
The Supervisory Board is to include an appropriate number of members with experience in managing or supervising a medium-sized or large company.
The Supervisory Board is to rely on as different as possible expert knowledge, skills, and experiences. Therefore, diversity is to be appropriately considered for its composition, and when making election proposals, in the Company's interest, attention should be paid to ensuring that the candidates' profiles reasonably complement each other.
At least 30% of the Supervisory Board are women and at least 30% are men. In general, the participation of women is a joint responsibility of the shareholder and employee sides. For nominations, both the shareholder and employee sides will consider, to the extent possible and until equal representation is achieved, whether the proportion of women can be increased with qualified female candidates. Please note that the responsibility for electing employee representatives is with the European Works Council. Therefore, the Supervisory Board cannot provide a recommendation.
A diversity concept applies for the Management Board of Fresenius Management SE and the Supervisory Board of Fresenius SE & Co. KGaA. The concept is outlined below. The objectives of the diversity concept, the way in which they are implemented, and the results achieved in the fiscal year are also explained.
Diversity enables us to look at matters from different perspectives and against the background of different experiences. Fresenius seeks diversity in the Management Board of Fresenius Management SE as well as in the Supervisory Board of Fresenius SE & Co. KGaA in terms of age, gender, education, professional background, and international experience.
Finding a balance between expertise and novel approaches is important for the Management Board of Fresenius Management SE and the Supervisory Board of Fresenius SE & Co. KGaA. Therefore, both the Management Board of Fresenius Management SE and the Supervisory Board of Fresenius SE & Co. KGaA should have a balanced mix of experienced and new members, ensuring that different perspectives are taken into consideration in the decision-making processes and a continuous transfer of knowledge is fostered.
Fresenius believes that a mix of women and men on both the Management Board of Fresenius Management SE and the Supervisory Board of Fresenius SE & Co. KGaA is desirable. At least 30% of the Supervisory Board are women and at least 30% are men. In general, the participation of women is a joint responsibility of the shareholder and employee sides. For nominations, both the shareholder and employee sides will consider, to the extent possible and until equal representation is achieved, whether the proportion of women can be increased with qualified female candidates. Please note that the responsibility for electing employee representatives is with the European Works Council. Therefore, the Supervisory Board cannot provide a recommendation. Besides, qualification is the decisive criterion for filling board positions.
For each one of the Company's key business areas, one member of the Management Board of Fresenius Management SE shall have long-standing experience:
In addition, one of the members shall have long-standing experience and expertise in finance and one in corporate governance, law, and compliance. This takes into account the special requirements of a capital-market-oriented company.
The Supervisory Board of Fresenius SE & Co. KGaA shall have a reasonable number of members experienced in the management or supervision of a medium-sized or large company. A reasonable number of Supervisory Board members should have leadership experience in the healthcare industry. In the previous fiscal year, at least one member of the Supervisory Board had to have expertise in accounting or auditing. In the future, at least one member must have expertise in the field of accounting and at least one other member must have expertise in the field of auditing.
Fresenius is present in more than 100 countries. Against this background, the majority of the members of the Management Board of Fresenius Management SE are expected to have international experience in at least one of the markets relevant to Fresenius, based on their background, professional training, or career.
An appropriate number of members of the Supervisory Board of Fresenius SE & Co. KGaA should also have a special connection to international markets relevant to Fresenius as a result of their origin or business experience.
In the opinion of the Supervisory Board, it meets the objectives for its composition and fulfills both the competence profile and the diversity concept. The Supervisory Board members also meet the personal and professional requirements deemed necessary.
In particular, the Supervisory Board members as a whole are familiar with the sector in which the Company operates. In addition, the Supervisory Board has the knowledge, skills, and experience essential to the company, including in production and profitability, digitalization and transformation, innovation and strategy development, and human resources and leadership. The Supervisory Board also has knowledge and experience in the business areas that are important for the Company. These include, in particular, dialysis products and dialysis care, medical devices and services for critically and chronically ill patients, operation of hospitals, and planning, construction and management of healthcare facilities.
The Supervisory Board's expertise in sustainability issues of importance to the Company enables it to monitor significant sustainability issues, particularly with regard to environmental, social, and governance (ESG) aspects, in both corporate planning and strategic direction.
The diverse composition of the Supervisory Board ensures appropriate consideration of diversity in line with the diversity concept. Numerous Supervisory Board members have international experience. In fiscal year 2022, the Supervisory Board comprised five female members and seven male members. This corresponds to a gender ratio of 42% to 58% of Supervisory Board members. The shareholder representatives' side is made up of two women and four men, and the employee representatives' side of the Supervisory Board is made up of three women and three men.
In the opinion of the Supervisory Board, all Supervisory Board members are independent. The resolved age limit and length of membership of the Supervisory Board will be taken into account at the time of the Supervisory Board's election proposals to the Annual General Meeting.
With Ms. Susanne Zeidler as Chair of the Audit Committee and Mr.Wolfgang Kirsch and Dr.Christoph Zindel, three members of the Audit Committee have expertise in the field of accounting. This includes special knowledge and experience in the application of accounting principles and internal control and risk management systems. Accounting also includes sustainability reporting and its auditing.
With Ms. Susanne Zeidler as Chair of the Audit Committee, Wolfgang Kirsch, and Dr. Christoph Zindel, three members of the Audit Committee also have expertise in the field of auditing. This includes in particular knowledge and experience in auditing, including sustainability reporting and its auditing.
Ms. Susanne Zeidler has acquired the necessary expertise due to her many years of work as an auditor. She was able to deepen this expertise during her many years as a
member of the Executive Board and Chief Financial Officer of a listed stock corporation.
Mr.Wolfgang Kirsch gained his expertise in the fields of accounting and auditing through his many years of work in the banking sector and his membership of the Board of Management of a financial institution, of which he was Chairman.
Dr. Christoph Zindel has the necessary expertise in the fields of accounting and auditing due to his many years of management activities, including his membership of the board of a listed stock corporation. As a member of the executive board of a listed stock corporation responsible for sustainability, he also has expertise in sustainability reporting and its auditing.
The status of implementation of the competence profile is disclosed in the form of the following qualification matrix, with the implementation of the diversity concept for the Supervisory Board included herein:
The evaluation for the creation of the skills matrix was carried out on the basis of an individual self-assessment by the members of the Supervisory Board using uniform definitions and examples. If, in the opinion of the Supervisory Board, individual competencies contained in the Supervisory Board's competency profile are no longer available to a sufficient extent in the future, the Supervisory Board will take this into account when making election proposals to the Annual General Meeting.
| Wolfgang Kirsch |
Prof. Dr. med. D. Michael Albrecht |
Dr. Frank Appel |
Stefanie Balling |
Bernd Behlert |
Michael Diekmann |
Grit Genster |
Dr. Heinrich Hiesinger |
Konrad Kölbl |
Frauke Lehmann |
Prof. Dr. med. Iris Löw-Friedrich |
Oscar Romero de Paco |
Dr. Dieter Schenk |
Susanne Zeidler |
Dr. Christoph Zindel |
||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| KGaA | Member since | 2021 | 2011 | – | 2016 | 2018 | 2015 | 2020 | – | 2007 | 2016 | 2016 | 2016 | – | 2022 | 2022 |
| Duration of member ship and function |
Term until | 2025 | 2025 | – | 2025 | 2025 | 2025 | 2025 | – | 2025 | 2025 | 2025 | 2025 | – | 2025 | 2025 |
| Function | Chair | Member | – | Member | Member Deputy Chair Deputy Chair | – | Member | Member | Member | Member | – | Member | Member | |||
| FMSE | Member since | 2021 | – | 2021 | – | – | 2015 | – | 2020 | – | – | – | – | 1998 | 2021 | – |
| Duration of member ship and function Personal fit |
Term until | 2025 | – | 2025 | – | – | 2025 | – | 2025 | – | – | – | – | 2025 | 2025 | – |
| Function | Chair | – | Member | – | – | Member | – | Member | – | – | – | – Deputy Chair | Member | – | ||
| Independence* | ||||||||||||||||
| No Overboarding* | ||||||||||||||||
| Diversity | ||||||||||||||||
| Gender | Male | Male | Male | Female | Male | Male | Female | Male | Male | Female | Female | Male | Male | Female | Male | |
| Year of birth | 1955 | 1949 | 1961 | 1968 | 1958 | 1954 | 1973 | 1960 | 1959 | 1963 | 1960 | 1974 | 1952 | 1961 | 1961 | |
| Nationality | German | German | German | German | German | German | German | German | Austrian | German | German | Spanish | German | German | German | |
| International experience | 1-2 years | 1-2 years | More than 6 years |
None | None | More than 6 years |
None | More than 6 years |
None | None | 3-5 years | 3-5 years | 1-2 years | None Business |
3-5 years | |
| Professional background | Business graduate |
Medical professional |
Chemist, neu robiologist |
Commercial business |
Engineering technician |
Legal professional |
Commercial business |
Engineer Skilled worker | Nurse | Medical | professional Skilled worker | Lawyer, tax consultant |
graduate, auditor, tax consultant |
Medical professional |
||
| Professional competence |
Change Management | |||||||||||||||
| Innovation | ||||||||||||||||
| Leadership & management experience |
||||||||||||||||
| Quality | ||||||||||||||||
| Increase profitability/ organic growth |
||||||||||||||||
| Strategy development and -implementation |
||||||||||||||||
| Healthcare Competence |
Sector experience (Healthcare) |
|||||||||||||||
| Dialysis products & services | ||||||||||||||||
| Hospital supplies & services | ||||||||||||||||
| Hospital projects & services | ||||||||||||||||
| Hospital operations | ||||||||||||||||
| Finance expertise | Financial expertise | |||||||||||||||
| Financial expert (accounting) according to sec. 100 para. 5 Stock Cooperation Act (AktG) |
||||||||||||||||
| Financial expert (annual audit) according to sec. 100 para. 5 Stock Cooperation Act (AktG) |
||||||||||||||||
| Functional competencies |
Digitalization | |||||||||||||||
| ESG & sustainability | ||||||||||||||||
| Marketing | ||||||||||||||||
| M & A/Integration | ||||||||||||||||
| Human resources | ||||||||||||||||
| Production Legal & Compliance, Corporate |
||||||||||||||||
| Governance | ||||||||||||||||
| Risk management | ||||||||||||||||
| Transformation | ||||||||||||||||
| Committee membership |
Human Resources Committee (FMSE) |
Chair | – | – | – | – | – | – | – | – | – | – | – | – | ||
| Nomination Committee (KGaA) | Chair | – | – | – | – | – | – | – | – | – | – | – | – | |||
| Audit Committee (KGaA) Joint Committee |
– | – | – | – | – | – | – | – | – | – | Chair | – | ||||
| (FMSE & KGaA) | – | – | – | – | – | – | – | – | – | – | Chair |
The general partner, represented by its Management Board, manages the Company's business with the due care and diligence of a prudent and conscientious company director in compliance with the provisions of the law, the articles of association, the rules of procedure for the Management Board, the resolutions passed by the full Management Board, and the Supervisory Board of the general partner. The basic rules of corporate conduct, partly extending beyond the requirements of law, are defined in the Fresenius Code of Conduct. It defines the framework of our rules and specifies the key principles for our conduct within the Company and in our relations with external partners and the public. We have published the Fresenius Code of Conduct on our website at www.fresenius.com/compliance. In addition, all Fresenius business segments have implemented their own Codes of Conduct. They cover the specifics of their businesses and reflect the values of the Fresenius Code of Conduct.
For Fresenius, compliance means doing the right thing. Because our core ethical values go beyond regulatory requirements, it means acting not only in accordance with the law, but also with applicable industry codes, internal policies, and our values. Compliance is part of our corporate culture and, consequently, our daily work.
Each of our business segments has appointed a Chief Compliance Officer, or a dedicated Compliance function, responsible for overseeing the development, implementation, and monitoring of the Compliance Management System (CMS) of the business segment. Furthermore, in line with the business structure and organization, the business segments have established compliance responsibilities at the respective organizational levels. The respective compliance organization supports management and employees in all compliance-related principles.
Our Compliance Management Systems are designed to achieve the implementation of and adherence to our rules within the Company. We have implemented risk-based Compliance Management Systems in all our business segments and at Fresenius SE& Co.KGaA's corporate level. They comprise three pillars: Prevent, Detect, and Respond. Emphasis is placed on actively preventing any acts of noncompliance before they occur. Such systems consider the markets Fresenius is operating in. They are tailored to the specific requirements of each business segment.
Essential measures for prevention include comprehensive risk recording and risk assessment, effective policies as well as adequate and effective procedures, regular training, and continuous advice. Through objective indicators, we try to detect potential compliance risks early on. To this end, we have implemented tools for early risk detection and internal control structures, e.g., for cash and bank transactions, and monitor these measures regularly in workshops and internal audits.
We take even potential misconduct seriously. This is why Fresenius employees who are aware of potential misconduct, can contact their superior or the responsible compliance function or report a potential compliance case anonymously through whistleblowing systems or dedicated e-mail addresses. Most whistleblowing systems are open
not only to employees, but also to third parties, such as customers, suppliers, and other partners, via the corporate website in many languages.
Any illegal actions or violations of the rules may harm the individual and Fresenius. We do not tolerate non-compliance. If a violation of applicable regulations is detected, we will take the necessary actions to remediate the violation and prevent any recurrence. We also take all reports as an opportunity to review our company processes for possible improvements.
Further information on compliance and the Compliance Management Systems can be found on pages 101ff. of our Group Non-financial Report.
In our view, responsible risk management is a crucial element of good corporate governance. Fresenius has a systematic risk management and control system that allows the Management Board to identify risks and market trends at an early stage and to react promptly to relevant changes in our risk profile. It consists of the following elements:
The well-being of our patients is important to us. Our risk management and control system, as well as efficiently designed processes, help to enhance the Company's performance. Our early risk detection system is reviewed as part of the annual audit of the financial statements. The auditor assesses whether the monitoring system set up by the Management Board is suitable for the early identification of risks that could jeopardize the Company's existence. The risk management and control systems are regularly reviewed by the Management Board and the Internal Audit department. The quality and effectiveness of our risk management and control system is the responsibility of the Management Board and is regularly monitored by the Audit Committee of the Supervisory Board and audited by Internal Audit. Findings from these audits are incorporated into the ongoing development of the risk management and control system.
Further information is available on page 19 of the Report of the Supervisory Board.
In line with the German Corporate Governance Code, our risk management and control system also covers the sustainability-related objectives anchored in our corporate strategy to the extent that this is not already required by law. This includes the processes and systems for recording and processing sustainability-related data. Further information (including the description of the main features of the overall internal control system and risk management system recommended by the Code and the statement on the appropriateness and effectiveness of these systems also recommended by the Code) can be found in the Group Management Report on pages 85ff.
The Internal Audit department supports the Management Board as an independent function outside the Company's day-to-day operations. The department assesses internal processes from an objective viewpoint and with the necessary distance. Their goal is to create added value for Fresenius, and thus to help achieve organizational goals through improved internal controls, optimized business processes, and efficiency increases. Results from internal audits are analyzed both by the business segments and by the compliance organization to continuously improve preventive measures, for example to prevent corruption.
Fresenius Medical Care AG & Co. KGaA has its own internal risk management and control system.
The German Corporate Governance Code aims to provide more transparency for investors with regard to existing regulations covering the management and monitoring of companies. Our value-enhancing strategies, as well as the majority of the guidelines, recommendations, and suggestions for responsible management contained in the Code, have been basic components of our activities for many years. Extensive information on Corporate Governance can be found on our website at www.fresenius.com/ corporate-governance.
The Management Board of the general partner of Fresenius SE & Co. KGaA, Fresenius Management SE, and the Supervisory Board of Fresenius SE & Co. KGaA have issued the required Declaration of Conformity pursuant to Section 161 of the AktG and have made it available to shareholders on the website of the Company:
"Declaration by the Management Board of the General Partner of Fresenius SE & Co. KGaA, Fresenius Management SE, and the Supervisory Board of Fresenius SE&Co.KGaA on the German Corporate Governance Code pursuant to Section 161 German Stock Corporation Act (Aktiengesetz)
The Management Board of the General Partner of Fresenius SE & Co. KGaA, Fresenius Management SE (hereafter the Management Board) and the Supervisory Board of Fresenius SE & Co. KGaA declare that since the issuance of the previous Declaration of Conformity in December 2021, the recommendations of the "Government Commission on the German Corporate Governance Code" published by the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) in the official section of the Federal Gazette (Bundesanzeiger) (hereafter the Code) in the version of December 16, 2019 and April 28, 2022 have been met and that the Code will also be met in the future.
Only the following recommendation of the Code has not been and will not be met as explained in the following:
Pursuant to Code recommendation C.5, a member of the Management Board of a listed company shall not be a member of more than two Supervisory Boards in listed non-group companies or hold comparable positions and shall not chair the Supervisory Board of a listed nongroup company.
Prof. Dr. med. Iris Löw-Friedrich is a member of the Supervisory Board of Fresenius SE & Co. KGaA and elected Chairwoman of the Supervisory Board of Evotec SE. She also serves on the Executive Committee of UCB S.A. as Chief Medical Officer and Executive Vice President Development and Medical Practices. Even if this Committee does not formally correspond to the Management Board of a Stock Corporation or SE, it is nevertheless comparable with such a Board, so that a deviation from Code recommendation C.5 is declared in this respect on a precautionary basis.
Prof. Dr. med.Iris Löw-Friedrich always had sufficient time to fulfill her mandate as a member of the Supervisory Board of Fresenius SE & Co. KGaA to the extent required. Prof.Dr.med. Löw-Friedrich plausibly demonstrated that this will continue to be the case in the future.
Fresenius complies with all suggestions of the Code.
Bad Homburg v.d.H., December 2022 Management Board of the General Partner of Fresenius SE & Co. KGaA, of Fresenius Management SE, and Supervisory Board of Fresenius SE & Co. KGaA"
This declaration and declarations from the past five years are published on our website, see www.fresenius.com/corporate-governance.
The Management Board takes diversity into account when filling executive positions. At Fresenius, the individual's qualifications are the paramount consideration in all hiring and promotion decisions. This means that women and men with comparable qualifications and suitability have the same career opportunities. Fresenius will continue to consistently act upon this principle – in compliance with the obligations arising from the Act on the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector (FüPoG I) and the Act to Supplement and Amend the Regulations for the Equal Participation of Women in Leadership Positions in the Private Sector and the Public Sector (FüPoG II):
For the Supervisory Board of Fresenius SE & Co. KGaA, the law requires a quota of at least 30% women and 30% men. These mandatory quotas were again met in 2022.
The legally stipulated targets for the Management Board do not apply to Fresenius Management SE or to Fresenius SE & Co. KGaA. Due to its legal form, Fresenius SE & Co. KGaA does not have a Management Board. Fresenius Management SE is not listed on the stock exchange and is also not subject to co-determination.
In accordance with the legal requirements, the Management Board specifies composition of the two management levels directly below the Management Board as follows:
The first management level includes all Senior Vice Presidents and Vice Presidents who have an employment contract with Fresenius SE & Co. KGaA and who report directly to a Member of the Management Board. Through a decision effective January 1, 2021 the Management Board has set a target, which has to be met by December 31, 2025, and calls for a proportion of women of 30.0% at the first management level.
The second management level includes all Vice Presidents who have an employment contract with Fresenius SE & Co. KGaA and who report directly to a member of the first management level. Through the decision effective January 1, 2021, the Management Board has set a target, which has to be met by December 31, 2025, and calls for a proportion of women of 30.0% at the second management level.
The Management Board believes that inclusion in the company-wide long-term incentive programs is a strong indicator that an individual holds a leading executive position. The proportion of women in this group of our top 1,800 executives was approximately 34% as of December 31, 2022.
Further information on diversity, as well as personnel development and personnel management, is included in the Group Management Report on page 46 and in the Group Non-financial Report on pages 147ff.
According to the provisions of Art. 19 Market Abuse Regulation (MAR) regarding managers' transactions, persons discharging managerial responsibilities, as well as persons closely associated with them, shall notify the Company of transactions conducted on their own account relating to the shares or debt instruments of Fresenius SE & Co. KGaA or to derivatives or other financial instruments linked thereto. Managers' transactions in 2022 are disclosed on our website at www.fresenius.com/corporate-governance.
None of the Management or Supervisory Board members of the general partner or of the Supervisory Board of Fresenius SE & Co. KGaA directly or indirectly holds more than 1% of the shares issued by Fresenius or any related financial instruments.
The members of the Management and Supervisory Boards of Fresenius Management SE and the members of the Supervisory Board of Fresenius SE & Co. KGaA together hold 0.096% of the shares of Fresenius SE & Co. KGaA outstanding as of December 31, 2022, in the form of shares or related financial instruments and stock options under the Fresenius SE & Co. KGaA stock option plans. 0.09% are held by members of the Management Board of Fresenius Management SE, 0.007% by members of the Supervisory Board of Fresenius Management SE, and 0.005% by members of
the Supervisory Board of Fresenius SE&Co.KGaA. Due to the fact that some persons are members of both Supervisory Boards, the amount of shares or related financial instruments and stock options held by the Boards of Fresenius SE& Co.KGaA and Fresenius Management SE in total can be smaller than the cumulative holdings of the three Boards as reported herein.
There were no notifications that the shareholdings of members of the Management and Supervisory Boards had reached, exceeded, or fallen below the reporting thresholds stipulated in the German Securities Trading Act.
Fresenius adheres to all recommendations of the Code. Transparency is guaranteed by continuous communication with the public. In that way, we are able to validate and deepen the trust given to us. Of particular importance to us is the equal treatment of all recipients. To ensure that all market participants receive the same information at the same time, we post all important publications on our website at www.fresenius.com. We report in detail on investor relations activities on page 23 of the Annual Report.
Fresenius, as a publicly traded company based in a member country of the European Union, has to prepare and publish its consolidated financial statements, as required, in accordance with International Financial Reporting Standards (IFRS) pursuant to Section 315e of the German Commercial Code (HGB).
According to the Audit Regulation (EU) No. 537/2014 there is an obligation for regular external rotation of the auditor and the Group auditor. For Fresenius SE&Co. KGaA, such external rotation took place for fiscal year 2020. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, was elected as auditor for the fiscal year 2022 by the Annual General Meeting 2022. The leading auditor Dr. Bernd Roese, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, has been responsible for the audit of the consolidated financial statements since 2020.
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