The principle of good Corporate Governance applies throughout the HOCHTIEF Group. Corporate Governance describes the principles and the framework of regulations for the management and monitoring of companies.
Declaration on Corporate Governance of HOCHTIEF Aktiengesellschaft and for the HOCHTIEF Group pursuant to Section 289f and 315d of the German Commercial Code (HGB) (Balance sheet date December 31, 2022)
- Compliance Declaration pursuant to Section 161 of the German Stock Corporations Act (AktG) (November 2022)
- Relevant disclosures on corporate governance practices
- Presentation of the working practices of the Executive Board and Supervisory Board, as well as of the composition and working practices of their Committees
In the following the Executive Board and the Supervisory Board report about Corporate Governance at HOCHTIEF pursuant to the provisions of the German Corporate Governance Code (DCGK).
In November 2022, the Executive Board and Supervisory Board published the Compliance Declaration pursuant to Section 161 of the German Stock Corporations Act (AktG). The Compliance Declaration may be viewed via the above link.
Targets for the percentage of women on the two management levels beneath the Executive Board (Section 76 (4) and AktG)
Under the Act on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sectors, of May 2015, listed companies and companies subject to codetermination, such as HOCHTIEF Aktiengesellschaft, are required to set targets for the percentage of women on the Executive Board and the two management levels beneath the Executive Board. They must also stipulate the date by which each target for the percentage of women is to be attained.
In 2017, the Executive Board of HOCHTIEF Aktiengesellschaft resolved a target of 11.11% for the proportion of women at the first management level below the Executive Board and a target of 25.0% for the second management level. These targets relate only to HOCHTIEF Aktiengesellschaft (excluding subsidiaries). The implementation period in each case was set as June 30, 2022.
At the end of the implementation period on June 30, 2022, the proportion of women at the first management level was 8.33% and at the second management level 20.0%. This means that the targets set for the respective management levels were not achieved. The reason for this is the increase in the total number of management positions at both management levels while the number of women remained unchanged. Compared with 2017, the number of positions at the first management level increased by three by the end of the implementation period. At the second management level, the number increased by two positions. These positions were filled exclusively by men, as suitable female candidates were not available.
In 2022, the Executive Board set a target of 8.33% for the proportion of women at the first management level. This means that the current level will be maintained for this management level. By contrast, the Executive Board has resolved to increase the target for the second management level to 40.0%. The implementation period in each case was set as June 30, 2027. The resolutions took into account the target set in the HOCHTIEF Sustainability Plan 2025 to increase the proportion of women in senior management positions by 50% by 2025 compared with 2019.
The setting of the target figures does not preclude an increase in the proportion of women at these two management levels beyond the target figures in the period up to June 2027.
Targets for the percentage of women on the Supervisory Board, in top management, and at the two management levels beneath top management have also been set together with attainment periods for all other companies in the HOCHTIEF Group that are affected by the Act.
Compliance with the minimum quotas for appointments of women and men to the Supervisory Board and the Executive Board in accordance with Sections 96 (2), 76 (3a) AktG
As HOCHTIEF Aktiengesellschaft is a listed company and also subject to full codetermination, its Supervisory Board has been required since 2016 to observe statutory minimum percentages of 30% women and 30% men when filling Supervisory Board seats that become vacant. These minimum percentages were attained in the Supervisory Board elections and an appointment by court. The Supervisory Board has since comprised five women and eleven men.
In August 2021, the Executives Positions Act II (Zweites Führungspositionengesetz - FüPoG II) came into force. Under the new regulations, companies that (i) have more than three Executive Board members and (ii) are both listed and subject to equal co-determination must in future appoint at least one woman and one man as Executive Board members (Section 76 (3a) AktG).
The Executive Board of HOCHTIEF Aktiengesellschaft consists of one woman and four men and thus complies with the legal requirement.
Description of the diversity policy pursued with regard to the composition of the Executive Board and Supervisory Board in relation to aspects such as age, gender, and educational or professional background, together with the objectives of that policy, the way in which it is implemented, and outcomes in the reporting year
1. Supervisory Board
In order to implement a diversity policy for the Supervisory Board, the Supervisory Board has both set targets for its composition and adopted a profile of skills and expertise for the Supervisory Board as a whole. The objective is for the Supervisory Board to be composed such that it is able to provide professional control and advice for the Executive Board. In addition, the Supervisory Board is to be composed in such a way that its members as a group possess the knowledge, ability, and professional experience required to properly complete its tasks. It cannot be expected in this connection for every single member of the Supervisory Board to possess all requisite knowledge and experience in full. However, at least one member of the Supervisory Board is required to be available as an expert authority for each area of the Supervisory Board’s work, thus ensuring that the requirement of comprehensive expertise and experience is collectively met by the members of the Supervisory Board.
With regard to its composition, the Supervisory Board aims to include a range of professional and international experience and adequate representation of both sexes. In accordance with the Stock Corporations Act, the Supervisory Board of HOCHTIEF Aktiengesellschaft comprises at least 30% women and at least 30% men.
Profile of skills and expertise
The members of the Supervisory Board are required, collectively, to possess the skills and expertise considered material in light of the HOCHTIEF Group’s activities as a global building and infrastructure construction group. These notably include in-depth experience and expertise:
- in management of a large, international group;
- in the construction industry in general, and notably in the segment relating to complex projects within the transportation, energy, and social and urban infrastructure sectors as well as the mining sector;
- in the principal markets served by the HOCHTIEF Group;
- in control and risk management; and
- in corporate governance/compliance
- in sustainability issues relevant to the Group.
In addition, regarding the requirements in Sections 100 (5), 107 (4) AktG, at least one member of the Supervisory Board and of the Audit Committee must possess expertise in the area of financial reporting and at least one other member must possess expertise in the area of auditing. The members of the Supervisory Board must collectively be familiar with the market for large-scale building and infrastructure construction.
In light of the HOCHTIEF Group’s international activities, it is important for the Supervisory Board to have a sufficient number of members with longstanding international experience. This international profile can be attained in multiple ways.
Here, internationality is not to be considered only as citizenship of a certain country. Different cultural backgrounds do also contribute to this (ethnicity). The decisive factors are intercultural characteristics and experience gained not least during the vocational education or through professional experience.
Age limit for Supervisory Board members
As a rule, only individuals no older than 80 are to be nominated for election to the Supervisory Board.
Independence and potential conflicts of interest
The shareholder representatives on the Supervisory Board stipulated the appropriate number of independent members of the shareholder side within the meaning of the German Corporate Governance Code. According to this, more than half of the shareholder representatives shall be independent of the Company and the Executive Board. At least two shareholder representatives ought to be independent of the controlling shareholder. In addition, members of the Supervisory Board may not hold board office or serve in an advisory capacity at major competitors of the HOCHTIEF Group and may not maintain a personal relation with a major competitor. No more than two former members of the Executive Board may serve on the Supervisory Board.
Means of implementation
Attainment of the objectives of the diversity policy for the Supervisory Board is assured by the fact that the elements of that policy are enshrined in law, the Code of Procedure, and the profile of skills and expertise for the Supervisory Board. For shareholder representatives on the Supervisory Board, the Nomination Committee additionally ensures compliance with the objectives regarding the Supervisory Board’s composition. The Committee takes account of the aforementioned objectives in its nominations for election to the Supervisory Board. At the same time, it also gives due consideration to fulfilment of the profile of skills and expertise for the Supervisory Board as a whole.
With its current composition as the outcome of the Supervisory Board elections in spring 2021, the Supervisory Board complies with the requirements of the above-mentioned diversity policy:
- Since the Supervisory Board elections in spring 2021, the Supervisory Board has comprised five women and eleven men.
- The Supervisory Board has several members who hold a degree in construction engineering. In addition, the Supervisory Board includes members with degrees in business or law and a German public auditor.
- Six shareholder representatives on the Supervisory Board have many years’ experience in the construction industry or related sectors; six employee representatives on the Supervisory Board have many years’ experience in the construction industry from employment within the HOCHTIEF Group.
- Seven shareholder representatives on the Supervisory Board have lived and/or worked abroad.
- Of the eight shareholder representatives on the Supervisory Board, six are of foreign nationality or have a foreign second nationality (Spanish/Polish). One employee representative also has the Greek nationality.
- In the current composition of the Supervisory Board, more than half of the shareholder representatives are independent of the Company and the Executive Board (Mr. Pedro López Jiménez, Mrs. Beate Bell, Mr. José Luis del Valle Pérez, Mr. Dr. Francisco Javier Garcia Sanz, Mr. Luis Nogueira Miguelsanz, Prof. Dr. Mirja Steinkamp, Mrs. Christine Wolff). In addition to that four shareholder representatives are indepentent of the controlling shareholder. These are the three ladies mentioned above and Mr. Garcia Sanz.
- With regard to the employee representatives on the Supervisory Board, the Supervisory Board assumes that the mere fact of holding office as employee representative on the Supervisory Board does not raise doubt as to the independence of the employee representatives.
- The stipulated age limit for members of the Supervisory Board has been complied with on the election or appointment of all members of the Supervisory Board.
- With one exception only, no member of the Supervisory Board has held office on the Supervisory Board for a period exceeding 12 years.
- No member of the Supervisory Board holds a board office or acts in an advisory capacity at a major competitor of the HOCHTIEF Group or maintains a personal relation with a major competitor.
- The Supervisory Board does not include any former members of the Executive Board, with the exception of one member of the Supervisory Board who was formerly, for a brief period within the meaning of Section 105 (2) AktG, acting deputy to an absent member of the Executive Board.
2. Executive Board
For the composition of the Executive Board, the Supervisory Board aims for an adequate “Diversity of Minds”. This comprises broad diversity with regard to internationality, as well as educational and professional background. The Supervisory Board assesses the achievement of such target, inter alia, on the basis of the following specific indicators:
- adequate share of members with an international background (e.g. based on origin or extensive professional experience abroad), ideally with a connection to the regions in which HOCHTIEF is operating;
- adequate diversity (women/men) with regard to educational and professional background.
Moreover the Supervisory Board has stipulated an age limit for members of the executive board. According to this a member of the Executive Board may not be older than 69 at the moment of his/her appointment.
Means of implementation
Implementation of the objectives pursued with the diversity concept for the Executive Board is ensured by the rule being enshrined in law and by the corresponding implementation resolution of the Supervisory Board. In addition, the Supervisory Board's Human Resources Committee ensures compliance with the objectives of the diversity concept for the Executive Board through its candidate proposals to the full Supervisory Board.
- Since September 2021, the Board has comprised one woman and four men.
- The Board includes two members with a degree in construction engineering. In addition, the Board includes three members with a commercial degree or business diploma.
- All Executive Board members have many years of experience in the construction industry or related industries, including through their work in the HOCHTIEF Group.
- 4 Executive Board members have already lived and/or worked abroad.
- 2 Executive Board members have a foreign nationality (Spain/Australia).
- The specified age limit for Executive Board members has been observed in the appointment of all members.
Long-term succession planning for the Executive Board
In cooperation with the Executive Board the Supervisory Board shall provide for a long-term succession planning concerning the appointment to the Executive Board. HOCHTIEF aims at appointing primarily candidates to the Executive Board developed in the company, as it does for all senior managerial staff positions. The task of the Executive Board is to recommend to the Supervisory Board a sufficient number of suitable candidates.
The long-term succession planning of HOCHTIEF depends on the company strategy. It is based on a systematic managerial staff development containing the following key elements:
- Early identification of suitable candidates (female and male candidates)
- Systematic development of the managerial skills by assuming tasks with increasing responsibility, if possible in different businesses, regions and functions
- Confirmed operational success and leadership skills, especially under challenging business conditions
- Exemplary role in implementing our corporate values.
Regardless of the above criteria, the Supervisory Board is convinced that in the end only the holistic assessment of the individual personality is a decisive factor for an appointment as Member of the Executive Board of HOCHTIEF.
Information on members of the Audit Committee with expertise in the fields of accounting and auditing in accordance with Recommendation D.3 of the German Corporate Governance Code
According to Principle 15 of the German Corporate Governance Code, at least one member of the Audit Committee must have expertise in accounting and at least one other member of the Audit Committee must have expertise in auditing. The relevant members of the Audit Committee are Dr. García Sanz, the Chairman of the Committee, in the field of accounting, and Mr. García Altozano in the fields of accounting and auditing.
Dr. García Sanz studied at the Business School in Wiesbaden. Part of his studies in business administration was accounting and the related processes. As part of his various management positions in the purchasing department of the General Motors Group, he was regularly involved in financial and accounting issues. This included, in particular, knowledge of the financial situation of suppliers and regular discussions with the suppliers' Chief Financial Officer. From 2001 to 2018, he was responsible for Procurement in the Volkswagen Group as Brand Board Member and subsequently as member of the Executive Board of Volkswagen AG. As part of the Executive Board's overall responsibility for the company, he regularly dealt with the financial matters of the respective company in the Group, such as accounting, risk management, the annual financial statements and corresponding discussions with the auditors. Since leaving the Executive Board of Volkswagen, Dr. García Sanz has also served on the supervisory boards or boards of directors and audit committees of several European companies and in this capacity regularly deals with accounting issues.
Mr. García Altozano holds an MBA from the University of Dayton, Ohio (USA) and a degree in Civil Engineering from the University of Madrid. He is Corporate General Manager of ACS, Actividades de Construcción y Servicios, S.A., the majority shareholder of HOCHTIEF. He is responsible for all financial matters of the ACS Group including all accounting and auditing issues at Group level. In the course of his professional career, Mr. García Altozano was, among other things, General Manager of the Spanish state holding company INI, where he was also responsible for the commercial aspects of the important state-owned companies Iberia Airlines and Endesa. From 1990 to 1996 he was President of Bankers Trust for Spain and Portugal and a member of the European Board. In this capacity he managed a large number of financial transactions and private equity investments.
Self-assessment by the Supervisory Board (efficiency evaluation)
The Supervisory Board’s most recent self-assessment (efficiency evaluation) with a questionnaire took place in the fall of 2018. The Supervisory Board discussed the main outcomes and measures for improvement.
Committees of the Supervisory Board (chair/members):
- Pedro López Jiménez (Chairman)
- José Luis del Valle Pérez
- Christine Wolff
Human Resources Committee
- Pedro López Jiménez (Chairman)
- Beate Bell
- Carsten Burckhardt
- José Luis del Valle Pérez
- Natalie Drews
- Klaus Stümper
- Christine Wolff
- Dr. Francisco Javier Garcia Sanz (Chairman)
- Fritz Bank
- Christoph Breimann
- José Luis del Valle Pérez
- Ángel García Altozano
- Matthias Maurer
- Luis Nogueira Miguelsanz
- Nicole Simons
- Prof. Dr. Mirja Steinkamp
- Klaus Stümper (Vice Chairman)
Mediation Committee (Section 27 Paragraph 3 German Codetermination Act (MitbestG))
- Pedro López Jiménez (Chairman)
- Beate Bell
- Matthias Maurer
- Nikolaos Paraskevopoulos
Qualification Matrix for the Supervisory Board
(Recommendation C.1 German Corporate Governance Code)
References to the Company's website pursuant to Section 289f (2) no. 1a HGB:Compensation report on the last financial year and Auditor's report pursuant to Section 162 AktG
applicable compensation system pursuant to Section 87a (1) and (2) sentence 1 AktG
last compensation resolution in accordance with Section 113 (3) AktG