The Austrian Code of Corporate Governance acts as a framework on which to base the responsible management and supervision of a company. The aim is to create long-term and sustainable value while taking the interests of all parties into account whose welfare is tied in with the success of the company. General explanations on the code may be found at www.bmf.gv.at/.
Because Investkredit Bank AG is a joint-stock company managed by its Supervisory Board and Board of Management in accordance with Austrian corporate law and is listed on the stock exchange, voluntarily committed itself as early as 2002 to adhere to the Austrian Code of Corporate Governance – when it first came into force. It renewed this self-imposed obligation for 2004.
As a company with an international business, Investkredit Bank AG considers it important to make the principles of its corporate governance transparent to shareholders, investors, customers, employees and the public at home and abroad, and so to strengthen the trust of all parties. The goal regarding responsible management and control associated with the Code, as well as a high level of transparency for all stakeholders, corresponds with Investkredit Bank AG’s corporate philosophy and is accepted throughout the company.
Explanations on the rules
The Code comprises three categories of rules:
Because Investkredit Bank AG is a joint-stock company managed by its Supervisory Board and Board of Management in accordance with Austrian corporate law and is listed on the stock exchange, voluntarily committed itself as early as 2002 to adhere to the Austrian Code of Corporate Governance – when it first came into force. It renewed this self-imposed obligation for 2004.
As a company with an international business, Investkredit Bank AG considers it important to make the principles of its corporate governance transparent to shareholders, investors, customers, employees and the public at home and abroad, and so to strengthen the trust of all parties. The goal regarding responsible management and control associated with the Code, as well as a high level of transparency for all stakeholders, corresponds with Investkredit Bank AG’s corporate philosophy and is accepted throughout the company.
Explanations on the rules
The Code comprises three categories of rules:
- Legal Requirements (L) – these are rules based on mandatory provisions in law;
- Comply or Explain (C) – refers to rules that should be adhered to; failure to do so has to be explained and/or accounted for;
- Recommendations (R) – are rules more in the nature of recommendations, non-adherence to which neither has to be declared nor explained.
Actual implementation in 2004
Following the changes to the Articles that were decided in 2003 and accordingly implemented at the Annual General Meeting in 2004, Investkredit Bank AG continues to conform with all the “Legal Requirements” of the Austrian Code of Corporate Governance. As regards the Code’s C Rules (“Comply or Explain”), Investkredit Bank AG does not comply in two respects, the explanation for which may be found in the specific shareholder structure of the Bank: - Rule 45 of the Code (Conflicts of Interest and Self-dealing – Supervisory Board) foresees members of supervisory boards not holding seats on the boards of other companies that compete with the company in question. As almost 80% of Investkredit Bank AG’s shares in 2004 were in the hands of the big Austrian banks, it is natural that they should have exercised their rights as shareholders to appoint members of the boards of management of their banks as members of the Supervisory Board.
- Rule 51 (Qualifications of Members and Composition of the Supervisory Board) of the Code limits the number of members of the Supervisory Board (excluding employees' representatives) to a maximum of ten. The number of shareholders' representatives in Investkredit Bank AG's Supervisory Board in the year under review stood at fourteen. There are various reasons for this: the Syndicate Agreement basically foresaw a seat for every shareholder owning 8% or more of the shares. Those banking groups with a multiple of this percentage provided a correspondingly higher number of members to the Supervisory Board. The Chairman of the Supervisory Board has to be a neutral personality who is not particularly close to any of the banks owning shares. Although only 13%, i.e. less than 25%, of the shares were in the free float, Heinz Kessler has represented these shareholders for many years on the Supervisory Board. For historical reasons, two representatives of Austria's state-run organisations for granting subsidies to companies have also been on the Supervisory Board.
Investkredit Bank AG has fully implemented the Code’s C, L and R Rules listed under the sections “Investor Relations and the Internet” and “Audit of the Financial Statements” in the chapter on “Transparency and Auditing”. Investkredit Bank AG also complies, with one exception (R 31: separate reporting on the compensation paid to each member of the Board of Management), with all of the Code’s other Recommendations. When there are only two members on the Board of Management, a breakdown of their pay would not be material information.
In compliance with Rules 39ff of the Code, the Balance Sheet Committee deals each year in depth with the results of the previous financial year prior to the Supervisory Board meeting to approve the balance sheet and makes a recommendation to the Supervisory Board to agree to the proposal by the Board of Management that the annual financial statements be approved.
There were no reports of share transactions by members of the Supervisory Board or of the Board of Management in the year under review. Such transactions must be reported to the Financial Markets Supervisory Authority under the Austrian Stock Exchange Act.
There is more information about corporate governance on the Internet under www.investkredit.at
In compliance with Rules 39ff of the Code, the Balance Sheet Committee deals each year in depth with the results of the previous financial year prior to the Supervisory Board meeting to approve the balance sheet and makes a recommendation to the Supervisory Board to agree to the proposal by the Board of Management that the annual financial statements be approved.
There were no reports of share transactions by members of the Supervisory Board or of the Board of Management in the year under review. Such transactions must be reported to the Financial Markets Supervisory Authority under the Austrian Stock Exchange Act.
There is more information about corporate governance on the Internet under www.investkredit.at