AGRANA regards corporate governance to international standards as an integral part of its corporate culture. The company believes that the principles of good corporate governance not only foster the confidence of domestic and international investors but also further AGRANA’s sustained ability to create value.
AGRANA is therefore committed to the fundamental principles and standards of conduct of the Austrian Code of Corporate Governance (the Code, available for viewing at www.corporate-governance.at). The Austrian Working Group for Corporate Governance continually updates the Code to reflect changes in Austrian and European capital market law and international standards. The Code is based on the key principles of equal treatment for all shareholders and transparency of governance. It also stipulates supervisory board independence, open communication between supervisory board and management board, avoidance of conflicts of interest for board members, and effective oversight by the supervisory board and auditors.
Voluntary commitment
to the Austrian Code of Corporate Governance and voluntary external evaluation.
In the 2009|10 financial year AGRANA applied this Code, which is a voluntary self-regulatory initiative of private industry, as worded in January 2009. In its meeting on 24 February 2005 the Supervisory Board of AGRANA Beteiligungs-AG had unanimously approved AGRANA’s adherence to the Austrian Code of Corporate Governance, and in its meeting on 11 February 2010 the Supervisory Board issued the statement of compliance with the 2009 Code for the 2009|10 financial year.
Openness and transparency in communications with shareholders and with the interested public are of the utmost importance to AGRANA. Information given to investors during conference calls and road shows is therefore simultaneously made available to all other shareholders via the Group’s website at www.agrana.com.
In the 2009|10 financial year AGRANA complied with all so-called “L rules” of the Code (these are rules based on legal requirements). It also adhered to all of the Code’s 2009 “C rules” (comply-or-explain rules) with the exception of the following four:
Rules 31 and 51 (disclosure of compensation of the individual members of the Management Board and Supervisory Board)
For the purpose of disclosure, the compensation of the Management Board members is analysed in terms of fixed and variable components. The disclosure of individual compensation stipulated by Rule 31 is omitted, as the associated encroachment on members’ privacy would be out of proportion to the benefits of such an approach. The same applies to the disclosure of individual compensation of Supervisory Board members specified by Rule 51.
Rule 49 (contracts requiring approval)
Under section 95 (5)(12) of the Austrian Stock Corporation Act, the approval of the Supervisory Board is required for contracts with members of the Supervisory Board by which members undertake, outside their role on the Supervisory Board, to provide a service to the company or a subsidiary for a material consideration. This also applies to contracts with companies in which a Supervisory Board member has a significant economic interest. For business policy and competition reasons, the object and terms of such contracts are not published in the annual report as stipulated in rule 49.
Rule 54 (appointment of an independent Supervisory Board member)
AGRANA Beteiligungs-AG has a free float of more than 20%. From this threshold upward, rule 54 of the Austrian Code of Corporate Governance stipulates the election of an independent member of the Supervisory Board who is neither a holder of more than 10% of the c ompany’s share capital nor represents the interests of such a shareholder. The Supervisory Board of AGRANA does not have such a free-float representative.
In keeping with the Code, the Management Board and Supervisory Board of AGRANA, and especially their chairmen, are engaged in continual dialogue regarding the Group’s performance and strategic direction, both at and between Supervisory Board meetings. The business culture of the AGRANA Group has always included open and constructive teamwork between the Management Board and Supervisory Board, which together ensure that the Code’s requirements are fulfilled.
As recommended by the Austrian Code of Corporate Governance, AGRANA commissioned a voluntary external evaluation (by Univ.-Prof. DDr. Waldemar Jud Corporate Governance Forschung CGF GmbH) of compliance with the Code. The report on the external review, based on the questionnaire issued for this purpose by the Austrian Working Group for Corporate Governance, is available to the public on the AGRANA website at www.agrana.com.