Arcandor AG | Investor Relations | Corporate Governance

In the Arcandor Group corporate governance means responsible corporate management and control aimed at longterm value enhancement. This increases the confidence of national and international investors, the finance markets, business partners and staff and the public in the Arcandor Group.

Bases and framework of Corporate Governance

The general legal conditions for corporate governance are to be found mainly in stock corporation law. In addition, in February 2002 the government commission formulated in the German Corporate Governance Code uniform principles for German corporations to make the regulations for good corporate governance transparent, particularly for foreign investors. The Corporate Governance Code was expanded in May 2003, and most recently in June 2008.
In the reporting period, Arcandor AG complied with the recommendations of the version of the German Corporate Governance Code dated June 14, 2007 with one exception:
The D & O insurance purchased for members of Arcandor executive bodies does not include a deductible. We remain of the opinion that the agreement on a deductible is hardly suited to increasing the sense of responsibility with which the members of the Management Board and the Supervisory Board discharge the duties and functions entrusted to them. Furthermore, a deductible is not usual in other countries or at many German companies.
The new recommendation of the German Corporate Governance Code in the version of June 6, 2008, that the plenary sessions of the Supervisory Board not only advises on and regularly monitors the remuneration system for the Management Board, but also resolves it is something we do not want to implement yet. In our view, the previous distribution of responsibility between the Standing Committee and the plenary sessions of the Management Board has been successful so that we would like to wait and see what experience is gained in other companies before we make any intervention to responsibility structures which have been maintained successfully for years.

Further information on this subject – including the complete wording of the Code – can be obtained from the Government Commission Website at 'Deutscher Corporate Governance Kodex'.

German Corporate Governance Kodex

The Management Board and Supervisory Board of Arcandor AG have approved a declaration of conformity to the 'Deutscher Corporate Governance Kodex' in accordance with Section 161 German Stock Corporation Law.

The Shareholders have the right to attend the Annual General Meeting and exercise their voting rights there. Each no-par value share entitles to one vote.

Arcandor AG has a dual management and control structure in the Management Board and Supervisory Board in accordance with German stock corporation law. The Management Board and Supervisory Board work closely together on the basis of a balanced division of duties and responsibility for the benefit of the corporation. The legal framework for the cooperation is provided by the corporation’s articles of incorporation and the Supervisory Board’s and Management Board’s rules of procedure.

Since the introduction of the Corporate Governance Code Arcandor AG has published a financial calendar on its Website. This gives prompt information about relevant dates and events. Furthermore, all IR, press and ad-hoc reports released since 2004 are accessible on the Internet. Finally, all, including earlier, Declarations of Compliance with the code of the company have been made accessible on the Website. Insider information directly concerning Arcandor AG is published immediately in the form of ad-hoc reports, unless later publication is advisable owing to special corporate interests.

To enable early identification of material risks, Arcandor AG has set up a risk management system. A detailed account is given in the consolidated management report. Consolidated accounting is done in accordance with IFRS (International Financial Reporting Standards).