corporate governance codex.
Declaration by the Management Board and by the Supervisory Board of UBM Development AG regarding compliance with the Austrian Corporate Governance Code
The Executive Board and the Supervisory Board of UBM Development AG do hereby declare that they respect the Austrian Corporate Governance Code in the applicable version and are committed to its objectives without reservation.
It is a key objective of UBM Development AG to carry out the standards of responsible and sustainable corporate management continuously. UBM Development AG is committed to the Austrian Corporate Governance Code in the applicable version and will make every possible effort to comply fully with all the provisions of the Austrian Corporate Governance Code. Should there be any deviations from the Austrian Corporate Governance Code, every deviation will be explained with sufficient clarity and comprehensively.
According to the provisions of the Austrian Corporate Governance Code, the Executive Board and the Supervisory Board of UBM Development AG do therefore declare that:
- The Executive Board provides information regularly, promptly, and comprehensively (and on important occasions, immediately) to the Supervisory Board regarding all relevant questions of business development, including the risk situation and risk management of UBM Development AG and essential group companies;
- The Executive Board informs the Supervisory Board immediately of circumstances of considerable importance to the profitability or liquidity of the company;
- Company management follows the principles of good corporate governance within the framework of open discussions between the Executive Board and the Supervisory Board, and within the Executive Board and the Supervisory Board;
- The Executive Board coordinates the strategic direction of UBM Development AG and its group of companies with the Supervisory Board and discusses the implementation of the strategy with it at regular intervals.
Comply or Explain catalogue
In accordance with C-Rule 27 of the Austrian Code of Corporate Governance, the company’s current remuneration policy states that the remuneration for each of the Management Board members must include fixed and variable components as required by the applicable legal regulations. The variable, performance-based remuneration components are designed to reflect shareholders‘ interests in the positive development of the company and increase the Management Board‘s motivation to take actions which lead to the sustainable, long-term and risk-aware optimisation of Group results. Annual variable remuneration is dependent on the attainment of parameters set by the Supervisory Board, which are based on financial or non-financial criteria or a combination of both. The inclusion of non-financial criteria is not mandatory for determining the amount of variable remuneration in order to support the objectiveness, transparency and plausibility of remuneration. The remuneration policy does not include the possibility to demand the payback of variable remuneration components (“clawback“) because this is not required by law and because civil law provides sufficient grounds for the right to claim the return of payments which were based on obviously false data.
The contracts with the Management Board members, prior to the implementation of the current remuneration policy in accordance with applicable legal regulations, do not include a specific provision that would limit severance compensation for the premature termination of their function without good cause to a maximum of twice the total annual remuneration and a maximum of the remaining contract term. Moreover, these contracts currently do not specify that severance payments will not be made when a Management Board contract is terminated prematurely with good cause. The Management Board contracts do not contain any provisions which would require consideration of the circumstances under which a member leaves the company and the economic position of the company in the event of premature resignation. When concluding the existing Management Board contracts, compliance with C-Rule 27a of the Austria Corporate Governance Code was not yet in the foreground. C-Rule 27a of the Austrian Code of Corporate Governance was implemented for the first time in 2021 in connection with the conclusion of the contract for the fourth member of the Management Board.
The job profile and procedure for appointing Management Board members are established on a case-by-case basis. The Supervisory Board defines a job profile when a Management Board position is to be filled, whereby particular attention is paid to the individual candidates’ qualifications, experience and industry knowledge. A formally defined appointment procedure and general job profile are not used in the interests of the company because this could exclude candidates from appointments to the Management Board in spite of their exceptional qualifications and outstanding industry knowledge.
The establishment of an emergency committee appears to be unnecessary in view of the homogenous business activities of UBM Development AG and the comparatively low number of Supervisory Board members. Circular resolutions are used in urgent cases.
In line with legal regulations and L-Rule 48 of the Austrian Code of Corporate Governance, the Supervisory Board approves the conclusion of all contracts with its members which commit these persons to performing a service for the company or a subsidiary outside their activities on the Supervisory Board for compensation that exceeds an immaterial value. The company does not, however, publish the related details for operational and confidentiality reasons. Moreover, the notes to the consolidated financial statements of UBM Development AG include disclosures on related party transactions, which include the remuneration for services by companies in which the Supervisory Board members hold a position on a corporate body and/or an investment outside their activities on the Supervisory Board of UBM Development AG.
UBM Development AG has decided to appoint an auditor, who is not responsible at the same time for auditing the annual financial statements, to evaluate the effectiveness of risk management. This decision is intended to distribute two separate audit contracts covering different subject to different experts. The dual control principle is further strengthened, above all through the independence of the auditors. A tender process led to the selection of PwC Wirtschaftsprüfung GmbH as the best bidder, and this firm was subsequently commissioned to evaluate the risk management system.
Criteria of Independence according to the Austrian Corporate Governance Code
(1) According to Rule 53, a member of the Supervisory Board is considered independent when he/she does not have a business or personal relationship with the company or its Executive Board that would constitute a material conflict of interest and would therefore be capable of influencing the conduct of the member.
(2) Based on Point (1), the Supervisory Board of UBM Development AG does hereby establish the criteria for independence as follows:
(a) During the past five years, no member of the Supervisory Board has been a member of the Executive Board nor in a management position at UBM Development AG or at one of its subsidiaries.
(b) No member of the Supervisory Board maintains, or did maintain during the last year, a business relationship with UBM Development AG or one of its subsidiaries that is of any importance to the member of the Supervisory Board. This also applies to business relationships with companies in which the member of the Supervisory Board has significant financial interest, but not to the fulfilling of an executive role in the group of companies. Group matters and the mere exercise of the work of a member of the Supervisory Board or Managing Director by a member of the Supervisory Board do not normally lead to the company in question being considered a “company in which a member of the Supervisory Board has significant financial interest”, unless circumstances justify the presumption that the member of the Supervisory Board gains direct personal benefit from a transaction with these companies. The approval of individual transactions by the Supervisory Board according to Rule 48 does not automatically lead to a qualification as not independent.
(c) During the past three years, no member of the Supervisory Board was an auditor of UBM Development AG or stakeholder or employee of the auditing firm performing the audit.
(d) No member of the Supervisory Board is a member of the Executive Board of another company in which a member of the Executive Board of UBM Development AG is a member of the Supervisory Board.
(e) No member of the Supervisory Board is a member of the Supervisory Board for more than 15 years. This does not apply to members of the Supervisory Board that are shareholders with a capital participation or that represent the interests of such shareholders.
(f) No member of the Supervisory Board is a close family member (direct descendant, spouse, life partner, parent, uncle, aunt, sibling, niece, nephew) of a member of the Executive Board of UBM Development AG or of persons that are in one of the positions described in the foregoing points a) to e).