The actions of TUI AG’s management and oversight bodies are determined by the principles of good and responsible corporate governance. In this declaration, the Executive Board – also acting on behalf of the Supervisory Board – provides its report on corporate governance in the Company pursuant to sub-section 3.10 of the German Corporate Governance Code and pursuant to section 289a (1) of the German Commercial Code (HGB).
Declaration of compliance and reporting on Corporate Governance
TUI has consistently based its corporate governance on the recommendations and suggestions of the German Corporate Governance Code. The most recent version of the Code is dated 18 June 2009. It contains new elements, in particular concerning remuneration issues. TUI AG has adopted and implemented all amendments to the Code. The Executive Board and the Supervisory Board discussed corporate governance issues several times in the short financial year 2009 and jointly submitted an updated declaration of compliance for 2009 on 28 October 2009, pursuant to section 161 of the German Stock Corporation Act. The declaration was made permanently accessible to the general public on TUI AG’s website.
Show more contentDeclaration of compliance for 2009
The current and all previous declarations of compliance have been made permanently available on the internet at www.tui-group.com
‘In accordance with section 161 of the German Stock Corporation Act, the Executive Board and Supervisory Board of TUI AG hereby declare:
The recommendations of the Government Commission on the German Corporate Governance Code in the version of 6 June 2008, as published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette on 8 August 2008, have been and are fully complied with.
TUI AG will additionally fully comply with the recommendations in the currently valid version of 18 June 2009, as published by the Federal Ministry of Justice on 5 August 2009.
In addition, TUI AG also complies with the suggestions set out in the Code.’
Working methods of the Executive Board and Supervisory Board
TUI AG is a company under German law, which also forms the basis of the German Corporate Governance Code. One of the fundamental principles of German stock corporation law is the dual management system involving two bodies, the Executive Board and the Supervisory Board, each of which is endowed with independent competences. TUI AG’s Executive Board and Supervisory Board cooperate closely and in a spirit of trust in managing and overseeing the Company.
TUI AG’s Executive Board currently comprises five members. They are responsible for managing the Company’s business operations with a view to achieving sustainable added value and in the interest of the Company. The allocation of duties and responsibilities to the individual Board members is presented separately in this chapter.
The Supervisory Board advises and oversees the Executive Board in the management of the Company. It is involved in strategic and planning decisions and all decisions of fundamental importance to the Company. In accordance with the terms of reference, decisions taken by the Executive Board on major transactions such as the annual budget, major acquisitions or divestments require the approval of the Supervisory Board. The chairman of the Supervisory Board coordinates the work in the Supervisory Board, chairs its meetings and externally represents the concerns of the body.
The Executive Board provides the Supervisory Board with comprehensive up-to-date information at regular meetings and in writing about the budget, the development of business and the situation of the Group, including risk management, and compliance. An extraordinary Supervisory Board meeting may be convened if required when events of particular relevance occur. The Supervisory Board has adopted terms of reference governing its work. In the run-up to the Supervisory Board meetings, the representatives of shareholders and employees meet separately, where necessary.
TUI AG has taken out a D&O insurance policy with an appropriate deductible for all members of the Executive Board and Supervisory Board. As of calendar year 2010 a deductible of 10% of the damage or one and a half times the fixed annual remuneration is planned to be agreed.
Composition of the Supervisory Board
In accordance with the Articles of Association, TUI AG’s Supervisory Board comprises twenty members, with ten representatives elected by the shareholders and ten by the employees for an identical period of office. In accordance with the new recommendations of the German Corporate Governance Code, the shareholders’ representatives were elected individually in the last elections to the Supervisory Board at the Annual General Meeting on 10 May 2006. In accordance with the Articles of Association, two new members were elected to the Supervisory Board at the Annual General Meeting on 13 May 2009 to replace members who had resigned. Following resignation of a member, a new member was appointed by the local court at Hanover on 7 August 2009. Factors taken into account in nominating candidates for election to the Supervisory Board are the knowledge, skills and expertise required to implement the tasks as well as diversity. The Supervisory Board does not comprise any former Executive Board members. It comprises a sufficient number of independent members not maintaining any personal or business relationship with the Company or its Executive Board. The Supervisory Board has been elected for a period of five years that will expire at the end of the 2011 ordinary Annual General Meeting.
Committees of the Supervisory Board
The Supervisory Board has established three committees from among its members: the Presiding Committee, the Audit Committee and the Nomination Committee, which prepare and complement its work. The Presiding and Audit Committee have six members each, with an equal number of shareholder and employee representatives. The Presiding Committee prepares the issues and resolutions to be dealt with by the Supervisory Board. It also prepares the nomination of Executive Board members including the terms of the articles of employment and the remuneration. The function of the Audit Committee is to support the Supervisory Board in executing its control function. The chairman of the Audit Committee is an independent financial expert. The Nomination Committee consists exclusively of shareholder representatives in accordance with the German Corporate Governance Code. Its task is to suggest suitable candidates to the Supervisory Board for its suggestions to the Annual General Meeting. There is no plan at present to establish any further committees. Based on practical professional experience, he has special knowledge and experience in the application of accounting principles and internal control methods.
The Executive and Supervisory Board members are obliged to act in TUI AG’s best interests. In the completed financial year, there were no conflicts of interest requiring immediate disclosure to the Supervisory Board. None of the Executive Board members of TUI AG sat on more than three Supervisory Boards of listed non-Group companies.
Remuneration of the Executive Board and Supervisory Board
For the Remuneration Report see the separate chapter in the Management Report
TUI AG complies with the recommendations of the German Corporate Governance Code to provide details of the remuneration of each individual member of the Executive Board and Supervisory Board. The principles of the remuneration systems and remuneration amounts are outlined in the Remuneration Report, which is part of the management report.
Shareholders and Annual General Meeting
TUI AG shareholders exercise their co-determination and monitoring rights at the AGM, convened at least once a year. The AGM takes decisions on all statutory matters that are binding on all shareholders and the Company. For voting on resolutions, each share confers one vote.
All shareholders registering in due time are entitled to participate in the AGM. Shareholders who are not able to attend the AGM in person are entitled to have their voting rights exercised by a bank, a shareholder association, one of the representatives provided by TUI AG and acting on the shareholders’ behalf in accordance with their instructions or some other proxy of their own choosing. Shareholders also have the opportunity of voting per internet in the run-up to the AGM or authorising the representative provided by the Company via the web.
Annual General Meeting 2010 on 17 February 2010 Information at: www.tui-group.com/en/ir/agm
The invitation to the AGM and the reports and information required for voting are published in accordance with the provisions of the German Stock Corporation Act and provided in German and English on TUI AG’s website. During the AGM the presentations given by the chairman of the Supervisory Board and the Executive Board are transmitted live over the internet.
Risk management
For the Risk Report see the separate chapter in the Management Report
Good corporate governance entails the responsible handling of commercial risks. The Executive Board of TUI AG and the management of the TUI Group use comprehensive general and company-specific reporting and monitoring systems to identify, assess and manage these risks. These systems are continually developed, adjusted to match changes in overall conditions and reviewed by the auditors.
The Executive Board regularly informs the Supervisory Board about existing risks and the development of these risks. The Audit Committee deals in particular with monitoring the accounting process, including reporting, the efficiency of the internal control system, risk management and the internal auditing system, compliance and audit of the annual financial statements.
More detailed information about risk management in the TUI Group is presented in the Risk Report. It also contains the report on the accounting-related internal control and risk management system required in accordance with the German Accounting Modernisation Act.
Transparency
TUI provides immediate, regular and up-to-date information about the Group’s economic situation and new developments to capital market participants and the interested public. The annual report, the half-year financial report and the interim reports for the quarters are published within the applicable timeframes. The Company publishes press releases and ad hoc announcements, if required, on topical events and any new developments. All information is published simultaneously in German and English and is available in print as well as by appropriate electronic media such as e-mail or the internet. Moreover, the company website at www.tui-group.com provides comprehensive information on the TUI Group and the TUI share.
Financial Calendar online at www.tui-group.com/en/ir
The scheduled dates for the main regular events and publications – such as the AGM, annual report and interim reports – are set out in a financial calendar. They are published well in advance and made permanently accessible to the public on TUI AG’s website.
Directors’ dealings
Directors‘ Dealings online: http://www.tui-group.com/de/ir/corporate_governance/directors_dealings
The Company was not informed of any notifiable purchase or sale transactions of TUI AG shares or related financial instruments by Supervisory Board or Executive Board members (directors’ dealings) in the short financial year 2009.
At the end of the short financial year 2009, the number of shares in TUI AG directly or indirectly held by members of the Executive Board and Supervisory Board exceeded 1%, the limit fixed for individually notifiable share ownership, for one Supervisory Board member. Executive Board members held a total of 51,741 shares, Supervisory Board members held 14,792,695 shares. Of these shares, Ms Carmen Riu Güell held 12,768,000 shares (indirectly) and the remaining Supervisory Board members held 2,024,695 shares.
Accounting and auditing
TUI AG prepares its consolidated financial statements in accordance with the provisions of the International Financial Reporting Standards (IFRS) as applicable in the European Union. The annual financial statements of TUI AG are prepared in accordance with the German Commercial Code (HGB). The consolidated financial statements are prepared by the Executive Board and audited by the auditors and the Supervisory Board. The interim reports and the half-year financial report are discussed between the Audit Committee and the Executive Board prior to publication.
The consolidated financial statements and the financial statements of TUI AG were audited by PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Hanover, the auditors elected by the 2009 AGM. The audit was based on German auditing rules, taking account of the generally accepted auditing standards issued by the German Auditors’ Institute as well as the International Standards on Auditing. It also covered risk management and compliance with reporting requirements concerning corporate governance pursuant to section 161 of the German Stock Corporation Act.
In addition, a contractual agreement was concluded with the auditors to the effect that the auditors will immediately inform the Supervisory Board of any grounds for disqualification or partiality as well as of all findings and events of importance arising during the performance of the audit. There was no ground to provide such information in the framework of the audit of the short financial year 2009. The condensed consolidated interim financial statements and the consolidated interim management report as at 30 June 2009 were examined by the auditors.
Compliance – Basis for entrepreneurial activity and operations.
Sustainable economic, ecological and social action is an indispensable element of TUI’s corporate culture. It includes integrity in the dealings with employees, business associates, shareholders and the public, expressed in TUI’s own exemplary conduct.
As a services group, TUI has to win and retain the trust of its customers and business associates through impeccable behaviour. The Group’s aim is to be credible, solid and reliable and act accordingly.
TUI takes compliance to mean observing laws, regulations, the Articles of Association and internal policies, but also voluntary commitments.
Code of Conduct
So that TUI can continue to ensure consistent exemplary behaviour across all activities, a Code of Conduct has been devised for the entire Group. It sets standards for all of us – the Executive Board, managing directors, managers and all Group employees.
The Code of Conduct defines minimum standards and sets out behaviour enabling all employees to cooperate in meeting these standards. The purpose of the Code is to help all employees cope with the ethical and legal challenges of their everyday work and provide them with guidance in conflict situations. In the interest of all employees and the Group, non-compliance with standards will be investigated and the causes will be remedied. This means that misconduct will be consistently prosecuted in accordance with national laws.
Compliance organisation
Compliance online: www.tui-group.com/de/unternehmen/compliance
TUI’s compliance structure helps to communicate the values underlying the Code of Conduct and anchor them firmly in the Group. It ensures Group-wide implementation of the compliance programme.
Since the Group is a global player, a worldwide whistleblower system has been implemented. It enables all Group employees to report compliance violations in an anonymous manner. Information received is immediately analysed by an evaluation committee set up for that purpose, which will also initiate any measures required.
The corporate values listed in the Code of Conduct are communicated to managers and employees in seminars requiring attendance and web-based training sessions. The central Compliance Department supports implementation of the Code of Conduct in the Group and answers questions. It serves a preventive purpose, because apart from raising employee awareness it ensures that the nature and consequences of our action are well understood within the TUI Group.