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As a globally active company, we have to comply with a wide range of statutory regulations and cultural standards.
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Separation of "corporate management" and "corporate supervision" and allocation of these functions to two separate bodies—an Executive Board on the one hand and a Supervisory Board on the other—is a characteristic feature of the German corporate governance system and thus the basis of Evonik's governance structure.
The Supervisory Board meets regularly and maintains a continuous dialogue with the Executive Board through its chairman. Its task is to oversee and advise the Executive Board. The Executive Board is required to report regularly to the Supervisory Board on aspects including business policy, corporate planning and corporate strategy. One specific feature of the German system is that employees are represented on the Supervisory Board. Evonik’s Supervisory Board has 20 members, ten representing the shareholders and ten representing the workforce. Under the German Codetermination Act, the employees usually elect delegates who in turn choose the employee representatives on the Supervisory Board. They currently include three representatives of the labor union. As per its rules of procedure, all decisions taken by the Supervisory Board are based on a majority vote, except where other mandatory rules apply. In keeping with the legal requirements, the recommendations of the German Corporate Governance Code and its own Rules of Procedure, Evonik’s Supervisory Board currently has five committees. Alongside the Conciliation Committee required by law, it has an Executive Committee, a Finance and Investment Committee, an Audit Committee and a Nomination Committee. The third governance organization required under the German Stock Corporation Act is the shareholders' meeting, where the shareholders exercise their rights.
Apart from compliance with the provisions of the German Stock Corporation Act, Evonik's commitment to the German Corporate Governance Code (the "Code") provides the starting point to ensure that the management and supervision of the company are executed in a responsible manner and geared towards bringing about a sustained increase in corporate value.
In addition to key statutory provisions on the management and supervision of German listed companies, the Code, which was adopted by the "Commission of the German Corporate Governance Code", contains recommendations and suggestions based on nationally and internationally recognized standards of responsible corporate governance. The Code's aim is to ensure that corporate governance in Germany is transparent and understandable in order to foster the confidence of investors, customers, employees and the general public in the management and supervision of listed companies. Evonik's Executive and Supervisory Boards identify with the objectives of the Code.