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 (ÖCGK), the company’s current remuneration policy is in line with the relevant legal provisions and provides for the remuneration of the members of the Management Board to include fixed and variable components. The variable, performance-related remuneration components take into account the interests of the shareholders in the positive further development of the company and are intended to increase the motivation of the Management Board to take measures to optimize the group’s results in a sustainable, long-term and risk-conscious manner. The annual variable remuneration depends on the achievement of parameters to be defined by the Supervisory Board, which is guided either by financial or non-financial criteria or a combination of both. The fact that non-financial criteria do not necessarily have to be taken into account in every case when determining the amount of variable remuneration is intended to reflect the idea of objectivity as well as transparency and clear traceability of the remuneration. The possibility of reclaiming variable remuneration components has not been implemented in the remuneration policy as, on the one hand, this is not required by law and, on the other hand, a right of reclaim in the event of payment on the basis of evidently incorrect data can already arise from general civil law.
The Management Board contracts from the period before implementation of the current remuneration policy as defined by the relevant legislation do not contain any express provision stipulating that severance payments in the event of premature termination of a Board member’s contract without serious cause shall not exceed more than two years’ total remuneration and shall not compensate for more than the remaining term of the contract. Moreover, there is currently no provision for a severance payment not to be made in the event of premature termination of the Management Board contract for good cause attributable to the Board member. The Management Board contracts do not contain any provisions stipulating that the circumstances of the departure and the economic situation of the company are to be taken into account in the event of the premature departure of a Management Board member. When the existing Management Board contracts were concluded, compliance with Rule 27a of the Austrian Corporate Governance Code was not yet a primary focus and the current remuneration policy had not yet been implemented. For reasons of equal treatment, such a provision was also waived in the most recently concluded Management Board contract of the Chief Financial Officer.
C Rule 38
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.
C Rule 39
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.
C Rule 49
In line with legal regulations, 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 engage a second auditor, in addition to the auditor who is responsible for the financial statements, to evaluate the functionality of the company’s risk management. The objective here is to assign separate audit contracts involving different subject matters to different experts. The implementation of the dual control principle, in particular, will also strengthen the independence of the auditor of the financial statements. PwC Wirtschaftsprüfung GmbH was selected as the best bidder in a tender process and 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).