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MLP SE — Governance Information 2024
Mar 28, 2024
289_cgr_2024-03-27_6751a054-d62c-4399-8321-2b7383647da6.pdf
Governance Information
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DECLARATION OF CORPORATE GOVERNANCE PURSUANT TO §§ 315D, 289F OF THE GERMAN COMMERCIAL CODE (HGB)
Pursuant to §§ 315d, 289f of the German Commercial Code (HGB), the Executive Board and Supervisory Board submit the Declaration of Corporate Governance for both MLP SE and the Group.
Wording of the Declaration of Compliance of MLP SE pursuant to § 161 of the German Stock Corporation Act (AktG) (as per November 8, 2023)
"Pursuant to § 161 of the German Stock Corporation Act (AktG), the Executive Board and Supervisory Board of MLP SE hereby declare that the Company has generally complied with the recommendations of the Government Commission for the German Corporate Governance Code in the version dated April 28, 2022 (hereinafter also referred to as the "GCGC 2022").
With regard to the recommendations of the Government Commission for the German Corporate Governance Code in the version dated April 28, 2022, only recommendations B.1, B.5, C.1 sentence 6, C.2, C.4, C.6, C.7, C.8, C.9, C.10, D.10 and G.10 have not been complied with.
The reasons for these deviations from the recommendations are as follows:
Recommendation B.1 of the GCGC 2022 (diversity in the composition of the Executive Board)
As per the recommendations of the GCGC 2022, the Supervisory Board should pay attention to diversity in terms of the composition of the Executive Board.
The Supervisory Board of MLP SE strives to further intensify its future efforts with respect to diversity and, in particular, an appropriate consideration of women when appointing members of the Executive Board. The Supervisory Board gives specific consideration to applications from suitable female candidates in its selection procedures. The Supervisory Board reviewed this aspect for the first time in the financial year 2014, and will undertake further measures in order to build on the Group-wide overall concept already passed by the Executive Board for the implementation of the respective GCGC 2017 recommendation (considering diversity when making appointments to executive positions) and also achieve an appropriate consideration of women within the Executive Board of the Company, taking into account the Company's specific situation. In 2020, the Supervisory Board confirmed the target of at least 25 percent for the proportion of women on the Executive Board – which currently only comprises three persons – and set itself the end of the financial year 2025 as the implementation deadline.
The Supervisory Board is of the opinion that the state of implementation achieved to date is not yet sufficient to meet the requirements set out in recommendation B.1 of the GCGC 2022. MLP therefore declares it will deviate from this recommendation in the financial year 2023 and in the financial year 2024.
Recommendation B.5 of the GCGC 2022 (age limit for members of the Executive Board and disclosure in the declaration on corporate governance)
As per the recommendations of the GCGC 2022, an age limit is to be specified for members of the Executive Board and disclosed in the declaration on corporate governance.
No age limit has been set for members of the Executive Board. The appointment of members of the Executive Board should be based solely on their knowledge, skills and specialist experience. MLP did not follow this recommendation in the financial year 2023 and will also not follow it in the financial year 2024.
MLP Annual Report 2023
Recommendation C.2 of the GCGC 2022 (age limit for members of the Supervisory Board and disclosure in the declaration on corporate governance)
As per the recommendations of the GCGC 2022, an age limit is to be specified for members of the Supervisory Board and disclosed in the declaration on corporate governance.
No age limit has been or is set for members of the Supervisory Board at MLP. The election of members of the Supervisory Board should be based solely on their knowledge, skills and specialist experience. MLP did not follow this recommendation in the financial year 2023 and will also not follow it in the financial year 2024.
Recommendation C.4 of the GCGC 2022 (number of non-group mandates)
As per the recommendations of the GCGC 2022, a member of the Supervisory Board that does not hold a position on any Executive Board at a listed company should not assume more than a total of five Supervisory Board mandates at listed companies outside the Group or comparable functions, whereby the position of Chair of the Supervisory Board counts as two mandates.
As per Principle 12 of the GCGC 2022, the Supervisory Board should ensure that all candidates can commit the time likely to be required when making proposals for election of new members to the Supervisory Board. This recommendation was based on the fact that the workload resulting from the individual mandates and other offices, as well as the personal situation of the candidates, can vary quite markedly. § 100 (2) no. 1 of the German Stock Corporation Act (AktG) limits the maximum number of Supervisory Board mandates to ten mandates per person. Set against this background, MLP considered that it was adopting the correct approach by having its Supervisory Board ensure that the respective candidate can commit the required amount of time and regularly reviewing this. § 25d (3) of the German Banking Act, which applies to MLP SE following the granting of permission to operate as a financial holding company, also serves to further limit the number of mandates.
MLP therefore declares that it was still deviating from this recommendation in the financial year 2023 up until the date of the Annual General Meeting on June 29, 2023. However, the recommendation was complied with from the time of the new election of members of the Supervisory Board by the 2023 Annual General Meeting and will continue to be complied with in the future.
Recommendation C.1 sentence 6, C.6, C.7, C.8, C.9 and C.10 of the GCGC 2022 (independence of Supervisory Board members and committee members)
As per recommendation C.1 sentence 6 of the GCGC 2022, the declaration on corporate governance should also report on the number of independent shareholder representatives deemed appropriate on the basis of the assessment performed by the Supervisory Board, as well as stating their names. As per recommendation C.6 of the GCGC 2022, the Supervisory Board should include a number of independent members on the shareholder side that the Supervisory Board itself deems appropriate. The ownership structure should be taken into account here. In the sense of this recommendation, a member of the Supervisory Board can be classed as independent if said person is independent from the Company and its Executive Board, as well as independent from a controlling shareholder.
As per recommendation C.7 of the GCGC 2022, more than half of the shareholder representatives should be independent from the Company and from the Executive Board. As stipulated by the GCGC 2022, a member of the Supervisory Board is independent from the Company and its Executive Board when said person is not engaged in any kind of personal or business relationship with the Company or its Executive Board that could constitute a significant and not only temporary conflict of interests. When assessing the independence of its members from the Company and from the Executive Board, the shareholder side should in particular take into account whether the actual member of the Supervisory Board or one of their close family members
- has already been a member of the Executive Board at the Company in the two years prior to being appointed,
MLP Annual Report 2023
- maintains or has maintained, either currently or in the year up to their appointment, a key business relationship with the Company or one of its subsidiaries/dependent companies (for example as a client, supplier, creditor or consultant) either directly or as a shareholder or in a responsible role at a non-group company,
- is a close family member of a member of the Executive Board or
- has held a position on the Supervisory Board for more than 12 years.
In the past, the Executive Board and Supervisory Board intentionally chose not to follow these recommendations. However, the stipulations relating to the composition of the Supervisory Board and the requirements profile for members of the Supervisory Board at MLP SE were amended in 2022. This was done in particular against the background of the election of new Supervisory Board members at the Annual General Meeting in 2023.
MLP therefore declares that, up to the time of the Annual General Meeting, it has deviated from above recommendations C.1 sentence 6, C.6, C.7, C.8, C.9, C.10 and D.4 of the GCGC 2022, as the Supervisory Board had not approved any fixed targets for the number of independent members of the Supervisory Board in the past, had not issued a definition of the term 'independence' in the GCGC 2022, had not specified any appropriate number of independent members of the Supervisory Board in the sense of the GCGC 2022 and had also not provided their names, but instead elected to fill vacant positions on the basis of the respective qualifications. MLP complies with the above recommendations with the election of new Supervisory Board members by the Annual General Meeting on June 29, 2023 and will continue to do so in the future.
Recommendation D.10 (meeting with the auditor without the Executive Board)
As per the recommendations of the GCGC 2022, the Audit Committee is to consult regularly with the auditor, also without the Executive Board being present.
With the Law on Strengthening the Integrity of Financial Markets (FISG), the legislator has stated that if the auditor is invited to attend meetings of the Supervisory Board or its various committees as an expert, the Executive Board will not attend these meetings, unless the Supervisory Board or the committee deems its participation necessary. The Supervisory Board also intends to regularly involve the Executive Board in the meetings of the Risk and Audit Committee in the future, insofar as there is a good reason for this. In terms of the deliberations of the Supervisory Board or its committees, it is particularly crucial that the Executive Board can provide its own assessment regarding the conclusions and evaluation of the auditor on the accounting questions under consideration. Nevertheless, the Risk and Audit Committee will hold regular consultations with the auditor without the presence of the Executive Board. Accepted, however, is that the Executive Board does not stay away from the entire meeting; it is sufficient for them to be absent only for parts of the meeting. In this sense, the Supervisory Board will actively manage the Executive Board's participation in the meetings.
MLP therefore declares that it was still deviating from this recommendation in the financial year 2023 and will comply with this recommendation in future.
Recommendation G.10 of the 2022 GCGC (share-based compensation; availability of long-term variable payments granted)
Based on recommendation G.10 sentence 1 of the GCGC 2022, the long-term variable compensation elements granted to a member of the Executive Board should predominantly be invested in shares in the Company by said member or granted accordingly on the basis of shares. In addition to this, a member of the Executive Board should only qualify for the long-term variable compensation elements after four years.
MLP does not compensate the members of its Executive Board on the basis of shares. Stipulations applying to the members of the Executive Board regarding what specific form variable compensation is
MLP Annual Report 2023
to take after being granted are not deemed necessary. As a general rule, each individual member of the Executive Board can determine this independently. However, any member of the Executive Board is obviously free to invest any compensation received in MLP shares.
Payment of the long-term variable compensation components granted takes place three years and four months after the end of the financial year for which said compensation components were granted. The members of the Executive Board can therefore receive these before four full years have passed. MLP considers this qualifying period of three years and four months to be adequate.
From MLP's perspective, the payment modalities for Executive Board compensation have proven effective, so there is no reason to change the current approach.
MLP therefore declares that it is deviating from these recommendations in the financial year 2023 and also in the financial year 2024. As such, it will not introduce any share-based variable compensation or make any stipulations regarding use of the variable compensation granted to members of the Executive Board. The same applies to an extension of the qualifying period for payment of the long-term variable compensation components granted.
Wiesloch, November 2023
MLP SE
The Executive Board
The Supervisory Board"
In November 2023, the Executive and Supervisory Boards issued the above Declaration of Compliance pursuant to § 161 of the German Stock Corporation Act (AktG) and made it permanently available to shareholders via the company's website. You can also view the wording of the Declaration of Compliance in the version of November 8, 2023 at https://mlp-se.com/investors/corporate-governance/declaration-of-compliance/.
The compensation report, auditor's report, compensation system and compensation resolution
The compensation report for the last financial year and the notes of the auditor pursuant to § 162 of the German Stock Corporation Act (AktG) are made publicly accessible at: https://mlp-se.com/investors/corporate-governance/compensation-report-and-the-auditors-report/.
The pay system in place as per § 87a (1) and (2) Sentence 1 of the German Stock Corporation Act (AktG) and the last compensation decision as per § 113 (3) of the German Stock Corporation Act (AktG) can be viewed at https://mlp-se.com/investors/corporate-governance/executive-board-and-supervisory-board/.
Further disclosure obligations
Responsible and value adding management
By mainly complying with the stipulations of the German Corporate Governance Code (GCGC) in the version of April 28, 2022 (GCGC 2022), MLP SE continues to reinforce the confidence of its shareholders, clients, employees and other stakeholders in the management of the company. Responsible management geared toward long-term added value is a high priority for us. The Executive and Supervisory Boards ensure that MLP continues to review and develop corporate governance across the Group.
MLP Annual Report 2023
Management and control structure
MLP SE is a European stock corporation that is based in Germany and subject to the European SE provisions, the German SE Implementation Act (SEAG) and German stock corporation law. As an SE, the company has a dual management and control structure, comprising an Executive Board and a Supervisory Board. The third corporate body is the Annual General Meeting.
Executive Board
As the management body of an "Aktiengesellschaft" (public limited company), the Executive Board runs the business and is tied to the interests and business principles of the company within the scope of corporation law. The responsibilities and duties of the Executive Board are laid down in the German Stock Corporation Act (AktG), in MLP SE's Articles of Association, as well as in a set of rules of procedures and the schedule of responsibilities of the Executive Board attached to it.
The members of the Executive Board hold joint responsibility for the entire management. Decisions made by the Executive Board are reached during Executive Board meetings held at regular intervals. Resolutions are drafted as ordinary resolutions with majority votes and recorded accordingly.
Composition of the Executive Board
According to MLP SE's Articles of Association, the Executive Board at MLP SE comprises at least two members. The Supervisory Board decides on the number of Executive Board members, their appointment and the revocation of their appointment as well as the conclusion, amendment and termination of the employment contracts with Executive Board members. The members of the Executive Board are Dr Uwe Schroeder-Wildberg (CEO and Chairman of the Board), Manfred Bauer and Reinhard Loose.
As per the recommendations of the GCGC 2022, an age limit is to be specified for members of the Executive Board and disclosed in the declaration on corporate governance. No age limit has been set for members of the Executive Board. The appointment of members of the Executive Board should be based solely on their knowledge, skills and specialist experience.
As per Recommendation B.2 of the GCGC 2022, the Supervisory Board should work together with the Executive Board to secure long-term succession planning. As the financial holding company, § 25d (11) of the German Banking Act (KWG) already stipulates that the Supervisory Board at MLP SE must adhere to institutionalised principles when identifying applicants to fill a management position and when preparing election nominations, as well as when checking the basic principles employed by management for selection and appointment of the persons at the upper management level. The Supervisory Board has approved a requirements profile for members of the Executive Board at MLP SE, which addresses the professional and personal aptitude of potential candidates. The requirements profile for the composition of the Executive Board as decided by the Supervisory Board enables the Supervisory Board to conduct an orderly selection process, applying objective and comprehensible requirement criteria to the proposals for the appointment of new members of the Executive Board at MLP SE. Accordingly, each member of the Executive Board must display a certain level of indispensable general knowledge and experience. Only those candidates are to be proposed whose personal integrity, independence, commitment, motivation and personality indicates that they are capable of properly performing the duties of a member of the Executive Board at MLP SE, as well as the Financial Holding Group managed by it and its subordinate companies. The Executive Board should be composed in such a way that qualified management of MLP SE is assured at all times. Its members should together possess the knowledge, skills and specialist experience required to perform their respective legal duties properly. Members of the Executive Board must be reliable. As well as meeting the general requirements in terms of personal reliability, personal independence and freedom from conflicts of interest, each member of the Executive Board should also possess the kind of general professional expertise needed in order to execute the respective management role properly. This means that the candidates must possess sufficient theoretical and practical knowledge of the respective business, as well as specific management experience. Alongside this, the Supervisory Board of MLP SE has already been including the topic of long-term
MLP Annual Report 2023
succession planning in the agenda of its meetings at least once every year for quite some time. This focuses on discussion of both conceptual issues associated with succession planning and specific potential candidates. In accordance with above requirement profile, the Supervisory Board regularly reviews whether a defined group of persons possesses adequate theoretical knowledge and practical experience including managing a financial holding or whether targeted development of a group of individual candidates can be achieved through a development programme within the company to acquire the necessary theoretical and practical experience in the form of individual measures.
Supervisory Board
The Supervisory Board advises and monitors the Executive Board. The responsibilities and duties of the Supervisory Board are derived from the German Stock Corporation Act (AktG), MLP SE's Articles of Association and a set of rules of procedures for the Supervisory Board.
Resolutions of the Supervisory Board are made in meetings with the necessary majorities, which are convened by the Supervisory Board or on behalf of the Chairwoman of the Supervisory Board. The Supervisory Board is informed of particularly important or urgent projects outside of the regular meetings. Where necessary, resolutions can also take the form of circular resolutions or be passed via telephone. A transcript of each meeting is drafted.
Supervisory Board composition
MLP SE's Articles of Association provide for a Supervisory Board that comprises six members, two of whom are employee representatives. Both the size and the tripartite composition of the Supervisory Board are thereby stipulated in MLP SE's Articles of Association. The members of the Supervisory Board at a dualistically structured SE are generally appointed by the Annual General Meeting (Art. 40 (2) of the SE Regulation) becoming effective. MLP SE deviates from this with regard to the employees' representatives. The appointment of the employees' representatives on the Supervisory Board is based on a participation agreement that has been agreed between the company and a negotiation committee established for this purpose. Accordingly, employees' representatives are elected directly through an election in the company. The members of the Supervisory Board were newly elected in the Annual General Meeting of the company held on June 29, 2023. The members of the Supervisory Board are currently: Ms. Sarah Rössler (Chairwoman of the Supervisory Board), Dr Andreas Freiling (Vice Chairwoman of the Supervisory Board), as well as Ms. Ursula Blümer, Mr. Bernd Groß, Mr. Matthias Lautenschläger and Ms. Monika Stumpf. Ms. Sarah Rössler has held a seat on the Supervisory Board since the financial year 2022, while Dr Andreas Freiling, Ms. Ursula Blümer and Mr. Bernd Groß have been members since the financial year 2023, Mr. Matthias Lautenschläger since the financial year 2018 and Ms. Monika Stumpf since 2021.
As per the recommendations of the GCGC 2022, the Supervisory Board should specify specific targets for its composition and draw up a skills profile for the entire Board. In doing so, the Supervisory Board should also pay attention to diversity. Proposals submitted to the Annual General Meeting by the Supervisory Board should take into account these targets and, at the same time, aim to meet the skills profile for the entire Board. In line with Recommendation C 15 of the GCGC, the status of implementation should be disclosed in the form of a qualification matrix in the Declaration of Corporate Governance. This should also provide information regarding the appropriate number of independent shareholder representatives on the Supervisory Board, as determined by the shareholder representatives, along with the names of these members.
In its meetings during past financial years, the Supervisory Board at MLP SE addressed the topic of setting specific targets for the composition of the Supervisory Board, paying particular attention to its own target of securing diversity in terms of its composition, as the Supervisory Board has set itself specific targets for its composition. In particular, a requirements profile for Supervisory Board candidates which defines the knowledge, skills, professional experience and personal aptitude characteristics that candidates must possess in order to be considered for this role, has already been adopted in the past.
MLP Annual Report 2023
The requirements profile applicable to the composition of the Supervisory Board and the proposals made to the Annual General Meeting for the composition of the Supervisory Board enable the Supervisory Board to conduct an orderly selection process, applying objective and comprehensible requirement criteria to the proposals for the appointment of new members of the Supervisory Board at MLP SE. Accordingly, each member of the Supervisory Board must possess a certain level of indispensable general knowledge and experience. Only those candidates whose personal integrity, independence, commitment, motivation and personality indicates that they are capable of properly performing the duties of a member of the Supervisory Board at MLP SE, as well as the Financial Holding Group managed by it and its subordinate companies, are to be proposed. The composition of the Supervisory Board must ensure qualified advising and monitoring of the Executive Board at MLP SE by the Supervisory Board at all times. Its members should together possess the knowledge, skills and specialist experience required to perform the respective legal duties properly. As well as meeting the general requirements in terms of personal reliability, personal independence and freedom from conflicts of interest, each member of the Supervisory Board should also possess the requisite professional expertise. All members should be capable of both understanding and evaluating the reports presented to the Supervisory Board, as well as drawing their own conclusions regarding the content. Alongside this, they should also display a general understanding of the brokerage, insurance, wealth management and banking business, as well as the real estate agent and real estate project development business and in particular the market environment, the individual business fields, the client requirements and the regions in which MLP SE and its subsidiaries are active and the strategic alignment of both MLP SE and the Group. From the perspective of the Supervisory Board, the ability to judge the correctness, efficiency, legality and expediency of the business decisions to be assessed also represents an absolute qualification requirement for members of the Supervisory Board. Alongside this, candidates should also be capable of understanding and evaluating the annual financial statements and associated documents. The member to be proposed should possess commercial experience gained from having worked in corporate management or as a senior executive and/or member of a Supervisory Board or comparable corporate body.
This requirements profile was revised in 2022 after MLP SE was granted authorisation to operate as a financial holding company and following the Supervisory Board elections held in 2023. You can find statements on the stipulations for promoting equal participation of women in management positions pursuant to § 76 (4) of the German Stock Corporation Act (AktG) within this Declaration of Corporate Governance.
MLP Annual Report 2023
The status of implementation of the specific objectives, of the skills profile and independence is provided in the qualification matrix below:
Qualification matrix for members of the Supervisory Board pursuant to the German Corporate Governance Code
| Sarah Rössler | Dr Andreas Freiling | Ursula Blümer | Bernd Groß | Matthias Lautenschläger | Monika Stumpf | ||
|---|---|---|---|---|---|---|---|
| Duration of membership | Member since | 2022 | 2023 | 2023 | 2023 | 2018 | 2021 |
| Diversity | Born | 1970 | 1963 | 1971 | 1968 | 1980 | 1964 |
| Gender | F | M | F | M | M | F | |
| Personal suitability | Independence^{1} | x | x | Employee | x | Employee | |
| No overboarding^{2} | x | x | x | x | x | x | |
| Professional suitability | Business field / sector familiarity^{3} | x | x | x | x | x | x |
| Accounting | |||||||
| - Financial expert of the Audit Committee^{4} | x | x | |||||
| - Expertise in auditing^{3} | x | x | |||||
| - Expertise in accounting^{3} | x | x | x | x | |||
| Leadership experience | x | x | x | x | x | x | |
| Risk Management | x | x | x | x | x | x | |
| Regulatory environment/compliance | x | x | x | x | x | ||
| IT/Digitalisation | x | x | |||||
| Sustainability | x | x | x | x | x | x |
1 In the sense of the German Corporate Governance Code, as well as the recommendation of the European Commission regarding the duties of the non-executive directors/members of the Supervisory Board, as well as the Committees of the Administrative/Supervisory Board dated February 15, 2005.
2 Some of the members of the Supervisory Board exercise a permitted number of mandates at various companies outside MLP SE. For MLP SE, the determination of whether overboarding exists is primarily based on the legal provisions of § 25d (3) of the German Banking Act (KWG).
3 § 100 (5) of the German Stock Corporation Act (AktG)
4 § 25d (9) "Expertise in accounting and auditing" (KWG)
The Supervisory Board also reviewed the knowledge and experience required of the Supervisory Board members and of the Chairman of the Risk and Audit Committee under the German Corporate Governance Code with regard to reporting and internal control procedures. The Chairman of the Risk and Audit Committee at MLP SE fully complies with these requirements.
Assessment of the Executive Board and Supervisory Board
Pursuant to § 25d (11) of the German Banking Act (KWG), the Supervisory Board is obligated – supported by the Nomination Committee – to perform a regular assessment, at least once a year, of the structure, size, composition and performance of the Executive Board and the Supervisory Board, as well as the knowledge, skills and experience of each individual member of the Executive Board and Supervisory Board. In the last financial year, the Nomination Committee and the Supervisory Board held multiple meetings to complete the legally mandated assessment of the Executive Board and the Supervisory Board pursuant to § 25d of the German Banking Act (KWG), which is to be performed at least once a
MLP Annual Report 2023
year and which also represents the self-assessment of the Supervisory Board pursuant to Recommendation D.12 of the GCGC. To this end, the format, specific execution and timetable were all discussed and established in the meetings of the Nomination Committee. A decision was taken not to bring in an external consultant. The assessment was essentially performed on the basis of detailed questionnaires regarding the work performed by the Supervisory Board, the Committees of the Supervisory Board and also the Executive Board, as well as personal interviews conducted by members of the Nomination Committee with members of the Executive Board. Additionally, individual evaluations of the members of both bodies were conducted.
Independence of the Supervisory Board
As indicated in above Declaration of Compliance, MLP SE declares that it has deviated from recommendations C.1 Sentence 6, C.6, C.7, C.8, C.9, and C.10 of the GCGC 2022 in the past, since the Supervisory Board so far had not approved any fixed targets for the number of independent Supervisory Board members, did not agree with the definition of independence in the GCGC 2022, had not stipulated any appropriate number of independent Supervisory Board members in the sense of the GCGC 2022 and also had not provided their names, instead considered appointments on the basis of the respective qualifications.
However, the stipulations relating to the composition of the Supervisory Board and the requirements profile for members of the Supervisory Board at MLP SE were amended in 2022. In 2022, the shareholder representatives on the Supervisory Board stipulated that three of the four members of the Supervisory Board elected by the shareholders should be independent of the company and its Executive Board. This action was taken especially in anticipation of the upcoming election of new members of the Supervisory Board at the Annual General Meeting in 2023. Therefore, MLP has declared in its Declaration of Compliance that it has still deviated from the aforementioned until the time of the Annual General Meeting. With the election of new Supervisory Board members by the Annual General Meeting on June 29, 2023, MLP complies with the above recommendations and will continue to do so in the future.
Age limit
As per the recommendations of the GCGC 2022, an age limit is to be specified for members of the Supervisory Board and disclosed in the declaration on corporate governance. No age limit is set for members of the Supervisory Board at MLP. In the Supervisory Board's opinion, the election of members of the Supervisory Board should be based solely on knowledge, skills and specialist experience.
Efficiency of the Supervisory Board
In 2023, the Supervisory Board also reviewed the efficiency of its own activities. Particular attention was paid to the efficiency of the procedures in the Supervisory Board, the information flow between the committees and the Supervisory Board and the timeliness and sufficient content of reporting by the Executive Board to the Supervisory Board. To this end, a self-evaluation form containing specific questions is completed and evaluated once a year by all members of the Supervisory Board. On this basis, the Supervisory Board then undertakes intensive and expedient discussion with the aim of developing measures aimed at further increasing efficiency.
Supervisory Board committees
The Supervisory Board of MLP SE has set up committees in order to improve the effectiveness of its work.
After MLP SE was granted a licence by the German Federal Financial Supervisory Authority (BaFin) to operate as a financial holding company in 2022, the Supervisory Board aligned its structure and activities to the relevant requirements. To this end, in November 2022 as per the mandatory requirements of
MLP Annual Report 2023
§ 25d (7) et seq. of the German Banking Act (KWG), the Supervisory Board has therefore established a joint Risk and Audit Committee, as well as a Nomination Committee and a Compensation Control Committee. These have now also taken over the duties of the previous Audit Committee, Personnel Committee and Nomination Committee.
The committees have, among others, the following non-exhaustive tasks:
The newly established Nomination Committee focuses on preliminary deliberations regarding personnel matters of the members of the Executive Board, definition of targets and a strategy to ensure better representation of the underrepresented gender on the Supervisory Board. It is also involved in drafting guidelines/processes for assessing the individual and overall aptitude of the members of the Executive Board and Supervisory Board, as well as in the regular (at least once a year) assessment of the structure, size, composition, performance, knowledge, skills and experience of individual members of the Executive Board and of the Supervisory Board, succession planning for the Executive Board and Supervisory Board, preparation of election proposals of the Supervisory Board for the election and appointment of shareholders' representatives to the Supervisory Board.
The new Compensation Control Committee focuses on supporting the Supervisory Board in designing and stipulating appropriate pay systems for the members of the Executive Board, as well as reviewing the appropriate set-up of the pay systems, the effects of the pay systems on risk management, capital management and liquidity management, supporting the Supervisory Board in monitoring proper involvement of the internal control operations when setting up the pay systems and supporting the Supervisory Board in drafting the compensation report.
The duties of the joint Risk and Audit Committee include preliminary deliberations regarding the financial statements and the management report, the consolidated financial statements and the group management report, as well as reviewing the reporting and accounting processes, the effectiveness of the control system, the internal risk management system, the internal audit system and execution of the actual audit. The joint Risk and Audit Committee prepares proposals for the appointment of an auditor, as well as submitting proposals for the level of the auditor's compensation and deliberates on termination or continuation of the audit engagement. It deliberates on the company's current and future overall risk propensity and strategy, it reviews whether the company's risk, capital and liquidity structure is adequately factored into the incentives offered by the pay system. It also monitors rapid rectification of any deficiencies determined by the auditor or bank-internal audit functions during internal and external audits.
Up to the point of electing new members to the Supervisory Board by the Annual General Meeting held on June 29, 2023, the members of the joint Risk and Audit Committee were Dr Claus-Michael Dill, who was also Chairman of the Committee, as well as Ms. Sarah Rössler, Dr Peter Lütke-Bornefeld and Mr. Matthias Lautenschläger. The members of the Nomination Committee up to June 29, 2023 were Dr Peter Lütke-Bornefeld, who was also Chairman of the Committee, Ms. Sarah Rössler, Dr Claus-Michael Dill, Mr. Matthias Lautenschläger and Ms. Monika Stumpf, while the members of the Compensation Oversight Committee were Dr Peter Lütke-Bornefeld (Chairman), Ms. Sarah Rössler, Mr. Matthias Lautenschläger and Ms. Monika Stumpf. The term in office on the company's Committees ends with the holding of the Regular Annual General Meeting of MLP SE. Since June 29, 2023, the Committees have had the following members: Dr Andreas Freiling, Ms. Ursula Blümer, Mr. Matthias Lautenschläger and Ms. Sarah Rössler have been members of the joint Risk and Audit Committee since June 29, 2023. Dr Andreas Freiling was appointed Chairman of the Risk and Audit Committee on June 29, 2023. Ms. Sarah Rössler, Mr. Bernd Groß, Mr. Matthias Lautenschläger and Ms. Monika Stumpf are members of the Nomination Committee. Ms. Sarah Rössler was appointed Chairwoman of the Nomination Committee as of June 29, 2023. Ms. Sarah Rössler, Dr Andreas Freiling, Mr. Matthias Lautenschläger and Ms. Monika Stumpf have been members of the Compensation Oversight Committee since June 29, 2023. Ms. Rössler was appointed Chairwoman of the Compensation Oversight Committee on June 29, 2023.
MLP Annual Report 2023
Corporate governance in the Supervisory Board
In 2023, the Executive and Supervisory Boards of MLP SE again dealt intensively with the German Corporate Governance Code and further new legislation significant to the work performed by the Supervisory Board and its committees. The GCGC and its amendments passed on April 24, 2022, were a subject of discussion by the Supervisory Board. Stipulations were analysed and corresponding adjustments to the internal regulations and procedures followed by the Supervisory Board were either proposed or submitted for verification.
Diversity concept for the Executive Board and Supervisory Board
The legislation on equal participation of women and men in management positions came into force on May 1, 2015. It stipulates an obligation to specify targets for members of supervisory and executive boards, as well as the two upper management levels, although it does not define an actual minimum target. Insofar as the percentage of women is below 30%, the targets must then not fall below the percentage reached. The legal deadline for achievement of the first targets was fixed for June 30, 2017. After that deadlines can be up to five years. The targets and deadlines are to be specified in concrete terms. In addition to this, it must be stated whether the specified targets have been achieved and, if not, information as to the reasons must be specified.
The Supervisory Board at MLP SE has set internal rules for the composition of both the Executive Board and Supervisory Board. Assuming equal personal and professional aptitude, these stipulate a minimum 25% representation of women in both bodies (in the case of the Supervisory Board on the shareholder side). MLP SE has met this quota on the shareholder side of the Supervisory Board. The Supervisory Board has had at least one female member continually since 2015. The quota has therefore been met for many years. This makes any further reporting on the implementation steps with regard to meeting the quota unnecessary.
In November 2020, the Supervisory Board confirmed the target of at least 25 percent for the proportion of women on the Executive Board – which currently only comprises three persons – and set itself the end of the financial year 2025 as the implementation deadline. Therefore, it is currently also not possible to report on any concrete measures for achieving these objectives in the Declaration of Corporate Governance. However, the Supervisory Board aims to take into account the aforementioned objective in the event of personnel changes. This is to be supported by various measures, including efforts with respect to diversity making appointments to executive positions, as well as giving appropriate consideration to women at the management levels in the company. To this end, measures directed at improving reconciliation of work and family life have already been introduced in the company in the past. The newly established Nomination Committee will also address the aforementioned objective of promoting representation of the underrepresented gender, as well as the strategy for achieving this. The legal regulation, based on which the Executive Board at listed companies must include at least one woman or one man when it has four or more members is not applicable to MLP SE.
Cooperation between Executive Board and Supervisory Board
Intensive dialogue between the Executive and Supervisory Boards forms the basis of transparent and responsible company management. The Executive Board of MLP SE provides the Supervisory Board with regular, timely and comprehensive information on the Group's position, including information on its risk situation, risk management and compliance. The Supervisory Board is informed of particularly important or urgent projects outside of the regular meetings. Furthermore, the Chairwoman of the Supervisory Board meets with the Executive Board on a regular basis to discuss specific issues. The Chairwoman of the Supervisory Board informs the other members of the Supervisory Board in detail about the content of his meetings with the Executive Board. The Supervisory Board discusses the Group's corporate planning and plans for strategic growth with the Executive Board.
Significant legal transactions by the Executive Board require the consent of the Supervisory Board. A set of rules of procedures issued by the Supervisory Board in particular governs the distribution of business,
MLP Annual Report 2023
powers of approval outside the Articles of Association and co-operation with the Executive Board. Further details on the co-operation between Executive Board and Supervisory Board can be found in the report by the Supervisory Board.
Further disclosures on the Supervisory Board's activities can be found in the report by the Supervisory Board.
Directors' Dealings
Pursuant to Art. 19 of the Market Abuse Regulation (MAR), persons assuming executive positions at the issuer of shares must notify the issuer and the Federal Financial Supervisory Authority (BaFin) of transactions in financial instruments. This obligation also applies to natural persons and legal entities that are closely linked to such a person assuming an executive position.
Transactions up to a total value of €20,000 per calendar year are exempt from the reporting obligation.
One transaction pursuant to Art. 19 of the Market Abuse Regulation (MAR) was reported to us in the financial year 2023.
Reported transactions from previous years can be viewed on our website at www.mlp-se.com.
Corporate governance practices – Compliance as a management duty
Compliance regulations
The trust of our clients, shareholders and business partners in our capacity to act professionally and responsibly forms the basis of our business operations. Compliance with all relevant legislation and capital market regulations represents the foundation of our business activities and an integral part of our corporate culture. Violations against applicable legislation and regulations not only have the potential to lead to legal disputes and financial losses but can also have a negative effect on our Group's reputation. The Executive Board at MLP SE ensures Group-wide compliance with legal provisions and internal company guidelines, while also guaranteeing both a trusting and transparent system of corporate governance.
The basic principles of abidance to laws, integrity and economically successful business practices are firmly anchored in our Code of Business Conduct and Ethics. Our compliance activities are based on a Group-wide compliance strategy, which in particular employs preventive measures to avoid the occurrence of risks due to non-compliance with applicable legislation, internal standards and processes. The focus here is on compliance with legal provisions and corporate policies with regard to the provision of (ancillary) securities services, consumer and data protection, as well as the prevention of money laundering, financing terrorist activities and all other criminal conduct. In the interests of our clients, shareholders and employees, the Compliance organisation supports and advises the Executive Board in establishing uniform standards for all Group companies. Taking into account the constantly changing regulatory requirements and market conditions, Compliance steers the continuous further development of our internal behavioural standards and monitors implementation of applicable requirements.
On the basis of a Group-wide risk analysis, the Compliance function identifies, analyses and evaluates the compliance risks relevant to MLP SE's business operations. The compliance function also collaborates with the specialist departments responsible for developing risk-reducing measures and continuously monitors their effectiveness in our day-to-day business.
Regular training sessions, during which all employees of the MLP Group familiarise themselves with the key regulations as a way of preventing any accidental infractions while also providing support in applying our Code of Business Conduct and Ethics, represent an important element of our risk prevention measures.
MLP Annual Report 2023
In particular they include web-based training events on market abuse legislation, securities compliance, data and consumer protection as well as the prevention of money laundering, financing of terrorist activities and criminal conduct. In addition, the compliance function is available to all employees as a point of contact for reporting internal suspicious transactions with regard to criminal activities or violations against our compliance regulations. Any violations determined are investigated promptly, comprehensively clarified and then used to eliminate any weaknesses identified. The Executive Board and Supervisory Board are regularly informed of all relevant actions and measures taken by the Compliance function.
The Code of Business Conduct and Ethics for the MLP Group also sets out the measures for insider trading prevention and describes the internal provisions for execution of employee transactions. It also ensures that confidential information is handled responsibly at MLP and defines standards for advising and supporting our clients, as well as the policy on giving and accepting invitations and gifts. To prevent any impairment of client interests, we have defined policies regarding the avoidance and monitoring of conflicts of interest and the acceptance of gifts. These policies are regularly reviewed and adapted to changing requirements.
Defined company values
Group vision with mission statement
The MLP Group and its brands Deutschland.Immobilien, DOMCURA, FERI, MLP, RVM and TPC is the financial services provider for private, corporate and institutional clients. Special added value is created by networking the various perspectives and areas of expertise – enabling clients to reach better financial decisions.
In 2021, MLP developed a Group vision as a way of further strengthening the common basis for successful cooperation. In this context, a mission statement was drafted for the MLP Group.
"Our network provides suitable solutions for all financial matters – always committed to our clients. We help individuals and companies reach better decisions."
An intensive transfer of knowledge and expertise takes place within the Group. The specialists support one another in the areas of research and concept development, as well as in client consulting. This valuable and targeted interaction generates additional value for clients, as well as for the company and its shareholders. This approach was also consistently pursued in 2023. The campaign "MLP – A strong WE" communicates MLP's unique network even more clearly to the outside.
The various corporate missions are arranged under the umbrella of a common Group vision, which all companies work to. The mission statement of the MLP brand is: "We motivate people to engage with the topic of finance. We help people reach better financial decisions independently. That is MLP." The corporate mission of MLP with its governing principles is based on various core values, which were defined with input from a large number of employees and consultants. "Performance" and "Trust" were identified as special core values. You can find details on our corporate mission on our homepage at www.mlp-se.com.
On the basis of the corporate mission, new governance principles were then developed in an interactive workshop in the autumn of 2021 with input from managers at all hierarchy levels. These were implemented, communicated and anchored in the course of the financial year 2022. The leadership principles form the basis for continuous further development of the MLP management and personnel development instruments. The results from the survey conducted in 2022 on the general sentiment and leadership quality were used in the financial year 2023 to derive a comprehensive package of measures. For example, the processes for selecting and training managers were further professionalised and revised formats were implemented for the regular leadership and employee development reviews. In 2023, the survey was conducted again, and the results showed further improvement.
MLP Annual Report 2023
The personnel strategy and its vision represent another part of the corporate governance practices. MLP is an attractive employer and is perceived as such both by its own employees and by relevant stakeholders and applicants on the employment market. All employees, including trainees and students, see themselves as a part of MLP and are proud to make an important contribution to the company's sustainable success as a business through their work. Staff at MLP can express and continuously develop their preferences and strength. MLP regards itself as a dynamic and learning organisation that promotes lifelong learning for all. Not only do the employees feel a connection with MLP's mission statement and leadership principles, but they also identify with MLP's spirit.
Various HR fields of action have also been defined on the basis of this. This exemplifies the positioning of the employer brand or the increase in employer attractiveness, in particular for women - among other things through active expansion and optimisation of the family-friendly framework conditions associated with working at MLP. Another action area revolves around actively working towards greater representation of women at all management levels within the company, as well as targeted measures for promoting employee health. Focus is also on increasing the identification and commitment of employees through targeted measures for promoting staff retention, as well as further development of strategic personnel and succession planning.
An explanation of the business and risk strategy as well as the risk management system can be found in the chapter "Risk report" of the Annual Report.
Stipulations for promoting equal participation of women in management positions pursuant to § 76 (4) of the German Stock Corporation Act (AktG)
The legislation on equal participation of women and men in management positions came into force on May 1, 2015. It stipulates an obligation to specify targets for members of supervisory and executive boards, as well as the two upper management levels, although it does not define an actual minimum target. Insofar as the percentage of women is below 30%, the targets must then not fall below the percentage reached. The deadline for achievement of the first targets was fixed for June 30, 2017. After that deadlines can be up to five years. The targets and deadlines are to be specified in concrete terms. In addition to this, it must be stated whether the specified targets have been achieved and, if not, information as to the reasons must be specified.
MLP places great emphasis on promoting women and helping employees combine a career with a family. The company has therefore already made this topic a focus over the last few years and implemented various measures to promote women into management positions. The concept for example includes measures such as family-friendly meeting arrangements or flexible workplace and working hours arrangements. As a sign of its public commitment to diversity, MLP signed the Diversity Charter in 2014. In addition to this, the workandfamily audit was successfully performed in 2019. As part of the target agreement associated with this, numerous measures aimed at promoting the concept of women in management positions and part-time management were successfully implemented. On the basis of the recertification of the audit in 2022, further implementation objectives for promoting family friendliness, as well as life phase-oriented alignment of the measures for employee retention have been agreed for the next three years.
In November 2020, the Executive Board at MLP SE approved a target of at least 33% for female managers at the first management level below Board level at MLP SE. In December 2022, the Executive Board furthermore approved the same minimum target figure of 33% for female managers at the second management level below Board level at MLP SE. These targets are to be met by the end of the financial year 2025.
Equal pay for women and men doing the same or equivalent work as per the German Transparency of Pay Act (EntgTranspG)
The Transparency of Pay Structures Act (EntgTranspG) aims to counteract wage disparities between women and men for equal or equivalent work and promote the disclosure of company remuneration
MLP Annual Report 2023
regulations. At enterprises with more than 200 employees, employees also have an individual right to information regarding the pay structures within that enterprise.
A "pay system" works agreement was concluded in December 2015 as the basis for establishing improved transparency of pay at MLP. It applies to MLP SE, MLP Banking AG, as well as MLP Finanzberatung SE in the version dated July 2, 2019. Each job type is assessed independently of the employee, ensuring a gender-neutral approach, and then assigned to a salary range. This range serves as the basis for salary benchmarking when hiring new staff and transitioning existing staff into new positions. Private employers that generally have more than 500 employees are called upon to use operational audit procedures to regularly review the application of their pay systems and the various pay components paid for compliance with the equal pay requirement in the meaning of this legislation. MLP performed an audit process of this kind in 2018 for the joint operations of MLP SE, MLP Banking AG and MLP Finanzberatung SE and then repeated it in the financial year 2023 using the same basic methodological principles.
The unadjusted gender pay gap, weighted by salary band and number of employees, for non-managerial staff at the company headquarters, who are not classified as senior executives within the meaning of § 5 (3) of the Works Constitution Act (BetrVG) was 3.49% in the financial year 2023. Since men at MLP are on average around one year older than women and therefore tend to have more participation in general and individual salary development, age was used as an adjustment factor in the survey, as was the case in survey conducted in 2018. For the purposes of adjustment, the long-term average of annual salary development was applied conservatively at 2% p.a. The pay gap at MLP, adjusted to include the average age differences, was 1.73%. As such, it was significantly below the adjusted gender pay gap published by the German Federal Statistical Office in 2023 of 7%.
The internal audit procedure was once again performed on a voluntary basis for the employees at the company HQ in the joint operations of MLP SE, MLP Banking AG and MLP Finanzberatung SE and delivered the pleasing result that no systematic gender-specific pay differences exist at MLP. In contrast to the survey performed in 2018, individual salary deviations were not only reviewed for women, but also for men in the financial year 2023. In the final results, the salary of one female employee was raised by 12% and of one male employee by 16%. No further individual adjustments were made. It was not possible to include the employees from the back-office service as part of the individual audit procedure. This is because the back-office operations almost exclusively employ women. As was also the case in 2018, no suitable or statistically meaningful comparative benchmark was therefore available for men.
Alongside these purely pay-based measures, MLP also offers a variety of additional measures to promote a good work-life balance and therefore contribute to greater equality of pay.
MLP Annual Report 2023
Special legal provisions
As per Recommendation F.4 of the GCGC 2022, the Supervisory Board and Executive Board at listed companies that are subject to special legal provisions should specify in the Declaration of Corporate Governance which recommendations of the Code could not be applied due to statutory provisions. It is the opinion of the Executive Board and Supervisory Board that the provisions of the Ordinance on the Supervisory Requirements for Institutions' Pay Systems (InstitutsVergV) take precedence over the provisions of the German Stock Corporation Act (AktG) or the GCGC in certain cases. Alongside this, the mandatory requirements of § 25d (7) et seq. of the German Banking Act (KWG) for establishing a joint Risk and Audit Committee, as well as a Nomination Committee and a Compensation Control Committee also represent a deviation from the provisions of the German Corporate Governance Code 2022 (GCGC). On the basis of a special legal provision, MLP is also deviating from Recommendation D4 of the German Corporate Governance Code 2022 (GCGC), according to which the Supervisory Board should establish a Nomination Committee exclusively composed of shareholder representatives. § 25d (11) of the German Banking Act (KWG) stipulates that the Nomination Committee of the Supervisory Board must also assume further duties that should not only be performed by the representatives of the shareholders on the Supervisory Board. The Nomination Committee of the Supervisory Board at MLP SE therefore also includes one employee representative. However, assurances are in place that the nominations proposed to the Annual General Meeting for the election of shareholder representatives to the Supervisory Board are prepared solely by the representatives of the shareholders that sit on the Supervisory Board.
MLP Annual Report 2023