Rules of procedure of the Supervisory Board

Adopted in the Supervisory Board meeting on 11 December 2020

Section 1 – Responsibilities

(1) The responsibilities, rights and obligations of the Supervisory Board and its members are defined in the statutory provisions, the articles of association, these rules of procedure and the rules of procedure for the Executive Board.

(2) The Supervisory Board monitors and advises the Executive Board on the management of the company. It works closely and in a spirit of mutual trust with the Executive Board in the interests of the company.

(3) The Supervisory Board appoints and dismisses the members of the Executive Board. It ensures that diversity considerations are taken into account in the Executive Board’s composition and carries out long-term succession planning together with the Executive Board. In accordance with statutory provisions and the recommendations of the German Corporate Governance Code (GCGC) followed by the company, the Supervisory Board adopts a clear, comprehensible system for the remuneration of Executive Board members and determines the specific remuneration for individual Executive Board members on this basis.

(4) The Supervisory Board and its members follow the relevant recommendations of the German Corporate Governance Code (GCGC) in line with the current declaration of compliance. The Supervisory Board and the Executive Board report on the company’s corporate governance in the annual Corporate Governance Declaration.

 

Section 2 – Composition of the Supervisory Board and proposals for election

(1) The composition of the Supervisory Board is governed by the statutory provisions and the recommendations of the German Corporate Governance Code, with the exception of those recommendations that have not been followed, as described in the current declaration of compliance. The Supervisory Board is to be composed in such a way that its members collectively have the knowledge, skills and professional experience necessary for the proper performance of its responsibilities and that the statutory ratio of women and men is met. The Supervisory Board designates specific targets for its composition, draws up a skills matrix for the Board as a whole and ensures its diversity.

(2) The Supervisory Board is to take these targets into account when making proposals to the Annual General Meeting for the election of Supervisory Board members and at the same time to strive to complete the skills matrix for the Board as a whole. The status of implementation is published in the Corporate Governance Report. It also reports on the number of independent members that the Supervisory Board believes to be appropriate and gives the name of these members.

 

Section 3 – Rights and obligations of Supervisory Board members

(1) The members of the Supervisory Board have the same rights and obligations, unless otherwise required by law, the articles of association or these rules of procedure.

(2) Every member of the Supervisory Board is bound to serve the interests of the company. They may not pursue personal interests when making decisions or to utilise business opportunities open to the company for personal gain. Every Supervisory Board member must disclose any conflict of interest without delay to the Chairperson of the Supervisory Board – or if the Chairperson is conflicted, to the Vice Chairperson – who informs the Supervisory Board accordingly. If the conflict of interest concerning an individual Supervisory Board member is serious and not only temporary, this member must step down. The Supervisory Board reports on any conflicts of interest and how they were dealt with in its report to the Annual General Meeting.

(3) Members of the Supervisory Board may not request or accept any gifts or other benefits in connection with their work for themselves or third parties to the extent that this may compromise the interests of the company or of customers. Consultancy agreements or any other contracts for services between a member of the Supervisory Board and the company require the approval of the Supervisory Board. This does not affect any statutory requirement for approval in the case of transactions with related parties.

(4) Every member of the Supervisory Board is obliged to keep secret all confidential matters and secrets of the company or its affiliates of which they become aware in their role as a Supervisory Board member. This obligation continues after they cease to be a member of the Supervisory Board. It applies particularly to confidential reports, the contents of meetings and the discussions and resolutions taken by the Supervisory Board and its committees. If a Supervisory Board member wishes to disclose information received in their function as a Supervisory Board member to third parties and it cannot be ruled out completely that the information may be at least partly confidential or may relate to company secrets, they must notify the Chairperson of the Supervisory Board beforehand and give them the opportunity to comment. The Supervisory Board members ensure that the employees and advisers consulted by them comply with the obligation of secrecy in the same way. At the end of their period of office they must return all confidential documents to the company. Sections 394, 395 AktG are not affected.

(5) Every Supervisory Board member complies with the rules on director’s dealings as defined in Art. 19 Market Abuse Regulation (Regulation (EU) No. 596/2014, MAR) and its implementing provisions, particularly the rules on closed periods and reporting obligations. Every Supervisory Board member notifies the persons closely associated with them within the meaning of MAR in writing of their obligations under Art. 19 MAR and keeps copies of these documents on file. This does not affect any further statutory provisions. 

(6) Every Supervisory Board member ensures that they have enough time to fulfil their commitments. This generally also means respecting the limits on mandates as defined in C.4 and C.5 GCGC.

(7) The members of the Supervisory Board are responsible for attending all the educational and training courses necessary for their Board work. The company is to provide them with appropriate support.

 

Section 4 – Chairperson and Vice Chairperson

(1) The Chairperson of the Supervisory Board coordinates the work of the Supervisory Board, chairs its meetings and represents the interests of the Supervisory Board externally and towards the company’s other governing bodies. It is authorised to make and accept all declarations of intent on behalf of the Supervisory Board required to implement the resolutions of the Supervisory Board. The Chairperson maintains regular contact between Supervisory Board meetings with the Executive Board, especially its Chairperson, and advises the Board on matters of company strategy, business performance, risk assessment, risk management and compliance. 

(2) The Chairperson and the Vice Chairperson are elected as defined in Section 27 (1) and (2) Co-Determination Act (MitbestG) and Art. 10 (5) of the articles of association after the Supervisory Board has been elected. The meeting is chaired by the oldest member of the Supervisory Board.

(3) The Vice Chairperson only has the rights and obligations of the Chairperson if the latter is unavailable and nothing else is provided for by law, the articles of association (particularly Art. 14 (5)) or these rules of procedure. If the Vice Chairperson is also unavailable, the rights and obligations of the Chairperson are exercised by the oldest member of the Supervisory Board; sentence 1 applies accordingly.

 

Section 5 – Convening meetings

(1) The Supervisory Board should meet at least once a quarter; it must hold at least two meetings every half-year. The dates of the regular meetings should be set at the beginning of the year in agreement with the Executive Board. Other Supervisory Board meetings are held as needed or on request in accordance with Section 110 AktG.

(2) The meetings are convened by the Chairperson. They may also be convened on behalf of the Chairperson by the Executive Board or by a person designated by the Chairperson. Art. 13 (2) of the articles of association applies to the form and deadlines for convening the meetings. If a member is not able to attend they must notify the Chairperson or the Executive Board in good time.

(3) Art. 13 (3) of the articles of association applies to notification of the agenda. Apart from cases described in Art. 13 (3) sentence 2, the agenda is to be extended if a Supervisory Board member so requests in text form, by giving the Chairperson the objective and the reasons no later than three calendar days before the Supervisory Board meeting. The Executive Board is to notify all Supervisory Board members of any such requests without delay on behalf of the Chairperson.

(4) Proposals for resolutions on agenda items, along with explanatory documents, should be made available to the Supervisory Board members at least ten working days before the meeting, but in any case sufficiently early for postal votes to be cast before the meeting. In urgent cases, and if the matter is particularly confidential, or if a Supervisory Board member requests a meeting in accordance with Section 110 (1), (2) AktG, the documents can also be made available a reasonable time before the meeting, or in exceptional cases during the meeting itself. 

(5) Otherwise the provisions of stock corporation law and the articles of association apply to convening Supervisory Board meetings.

 

Section 6 – Meetings and resolutions

(1) Supervisory Board meetings are chaired by the Chairperson. They determine the order in which agenda items are discussed, as well as the type, form and order of voting. They can – at their professional discretion – postpone to a later meeting the discussion of motions and matters not related to the agenda items.

(2) Supervisory Board resolutions are generally passed in meetings. Resolutions may be passed in other ways subject to the conditions of Art. 14 (1) of the articles of association. Otherwise, Art. 14 of the articles of association applies.

(3) The Executive Board attends the Supervisory Board meetings unless the Supervisory Board Chairperson decides otherwise in individual cases or the Supervisory Board passes a different resolution. Notwithstanding the above, the Supervisory Board should also meet regularly without the Executive Board. The Chairperson decides in accordance with Section 109 AktG and Art. 13 (4) of the articles of association whether others, particularly expert witnesses and people providing other information, may attend meetings or be present for individual agenda items.

 

Section 7 – Minutes

(1) Minutes are to be taken of the meetings and Supervisory Board resolutions taken outside meetings. They must include the place and date of the meeting or resolution, participants, agenda, the main contents of the discussions and the Supervisory Board resolutions. The Executive Board generally appoints someone to be minutes secretary.

(2) The minutes are to be presented for signature to the person who chaired the meeting or the voting, if resolutions are taken outside meetings, within three weeks of the meeting or the resolution and then made available to all Supervisory Board members in text form. All Supervisory Board members should have the minutes no later than six weeks after the meeting or the resolution.

(3) The minutes are deemed to have been approved if no Supervisory Board member who attended the meeting or voted on the resolution has objected orally or in text form to the Chairperson before discussion of these minutes at the next Supervisory Board meeting has been concluded. The objection must also include the proposed changes and the reasons for them. 

 

Section 8 – Transactions requiring approval

Transactions and activities within the meaning of Section 111 (4) sentence 2 AktG that require the approval of the Supervisory Board are listed in the rules of procedure for the Executive Board.

 

Section 9 – Committees – General Rules

(1) The Supervisory Board forms the following permanent committees from among its members: Arbitration Committee (Art. 10), Personnel Committee (Art. 11), Finance Committee (Art. 12), Audit Committee (Art. 13), Real Estate Committee (Art. 14) and Nomination Committee (Art. 15). The Supervisory Board may form other committees as needed and/or delegate to a committee other tasks for preparation or final decision to the extent permitted by law.

(2) Unless otherwise required by law, the articles of association, these rules of procedure or a Supervisory Board resolution, the committee members are elected from among the Supervisory Board members by simple majority of votes cast. With the exception of the Nomination Committee, which consists solely of shareholder representatives, the committees are to include equal numbers of employee and shareholder representatives. Unless a shorter period of office is determined when the election is held, the committee members’ period of office is the same as their period of office on the Supervisory Board. 

(3) At the beginning of their term, each committee elects a Chairperson from among the shareholder representatives and a Vice Chairperson from among the employee representatives, unless the Supervisory Board elects a committee member as Chairperson or Vice Chairperson or these rules of procedure provide otherwise. If the committee has equal numbers of shareholder and employee representatives, the committee Chairperson has a casting vote in corresponding application of Art. 14 (5) of the articles of association.

(4) The internal working of the committees is governed by the corresponding application of Art. 12, 13 (2) and (3), 14 (1), (2) sentence 4 and (3) to (7) and Art. 15 of the articles of association and the provisions of these rules of procedure for the full Supervisory Board, unless required otherwise by law or otherwise determined by the following rules. The Chairperson and Vice Chairperson of the committee are meant in place of the Chairperson and Vice Chairperson of the Supervisory Board. The minutes of the meetings of the Finance, Audit and Real Estate Committee are to be made available to all Supervisory Board members.

(5) The Chairpersons of the committees provide the Supervisory Board with regular reports on the work of the committees. In urgent matters the Chairperson of the committee makes contact with the Chairperson of the Supervisory Board without delay.

 

Section 10 – Arbitration Committee

(1) Immediately after the election of the Chairperson and the Vice Chairperson, the Supervisory Board forms a committee (Arbitration Committee) composed of the Chairperson, the Vice Chairperson, one employee representative and one shareholder representative. The Chairperson and Vice Chairperson of the Supervisory Board are also Chairperson and Vice Chairperson of the Arbitration Committee.

(2) The responsibilities of the Arbitration Committee are defined in Section 31 (3) sentence 1 MitbestG.

 

Section 11 – Personnel Committee

(1) The Personnel Committee is composed of the Chairperson, the Vice Chairperson and four other Supervisory Board members.

(2) The Personnel Committee 

a) prepares personnel decisions for the Supervisory Board and ensures long-term succession planning together with the Executive Board, taking the diversity concept for the Executive Board into account;
b) prepares Supervisory Board resolutions in accordance with Sections 87 and 87a AktG on the remuneration of Executive Board members, especially on the remuneration system for Executive Board members (including the main terms of employment) and setting the specific remuneration of Executive Board members and on any curtailment of their remuneration;
c) represents the company in place of the Supervisory Board whenever permitted by law in other legal transactions with Executive Board members;
d) decides on approving the appointment of authorised signatories (cf. Section 12 (1) no. 1 of the rules of procedure for the Executive Board).

 

Section 12 – Finance Committee

(1) The Finance Committee is composed of six members of the Supervisory Board. 

(2) The Finance Committee

a) discusses the quarterly reports on the course of business.
b) prepares resolutions by the Supervisory Board on the budget for HHLA and the Group (cf. Section 6 of the rules of procedure for the Executive Board), but not the parts of the budget relating to the Real Estate subgroup (cf. Art. 2 (2) of the articles of association);
c) prepares negotiations and resolutions of significant financial scope by the Supervisory Board – insofar as they do not exclusively or primarily concern the Real Estate subgroup – particularly Supervisory Board decisions on transactions and activities requiring approval in accordance with Section 12 (1) no. 3 (land transactions), no. 4 (providing collateral), no. 5 (equity investments), no. 6 (significant contracts), no. 7 (cash investments), no. 8 (derivative financial transactions), no. 13 (borrowing) and no. 14 (lending) of the rules of procedure for the Executive Board.

 

Section 13 – Audit Committee

(1) The Audit Committee is composed of six members of the Supervisory Board. The provisions of Section 107 (4) in conjunction with Section 100 (5) AktG apply to the election of its members. The Chairperson of the Audit Committee must be independent, have particular knowledge and experience in the application of accounting principles and internal control processes and be familiar with the auditing of financial statements. The Chairperson of the Supervisory Board does not chair the Audit Committee.

(2) The Audit Committee 

a) deals with the audit of the accounts and the monitoring of the accounting process, particularly the preliminary assessment of the documents for the Annual and Consolidated Financial Statements (including the management reports and non-financial reports) and the Executive Board’s proposal on the use of distributable profit (each to the extent that these relate to the Port Logistics subgroup); it can make recommendations or proposals to the Executive Board to guarantee the integrity of the accounting process;
b) deals with monitoring the effectiveness of the internal control system, the risk management system, the internal audit system and compliance;
c) discusses the interim financial information (including any auditor’s review) with the Executive Board – if possible before it is published;
d) monitors the audit of the annual financial statements and its effectiveness, which includes the independence of the auditor and the regular evaluation of the quality of the audit;
e) decides on the approval of additional services provided by the auditors, including the approval of non-audit or tax advisory services within the meaning of Art. 5 (4) Audit Regulation (Regulation No. 537/2014 of 16 April 2014) or Section 319a (3) German Commercial Code (HGB); it may adopt a catalogue of approved services in advance;
f) prepares the Supervisory Board’s proposal to the Annual General Meeting on the election of auditors, including any selection processes carried out; issues audit assignments to auditors after their election by the Annual General Meeting, signs the fee agreement and determines the main points of the audit;
g) decides on any external review of the non-financial declarations and reports for the company and the Group and appoints the auditors, if external assurance is to be obtained.

 

Section 14 – Real Estate Committee

(1) The Real Estate Committee is composed of six members of the Supervisory Board.

(2) The Real Estate Committee

a) carries out the preliminary assessment of the documents for the Annual and Consolidated Financial Statements, including the management reports, and prepares the Supervisory Board decision on the adoption of the Annual Financial Statements, the approval of the Consolidated Financial Statements and the Executive Board’s proposal for the use of distributable profit, each insofar as these relate to the Real Estate subgroup (cf. Art. 2 (3), 31 of the articles of association) or the portion of distributable profit attributable to the Real Estate subgroup;
b) prepares resolutions by the Supervisory Board on the parts of the budget for HHLA and the Group (cf. Section 6 of the rules of procedure for the Executive Board) that relate to the Real Estate subgroup; 
c) receives all reports and discusses all questions relating to the Real Estate subgroup and the company’s direct and indirect subsidiaries and majority investments attributed to the Real Estate subgroup;
d) decides on Supervisory Board approval for all legal transactions and activities requiring approval under Section 12 of the rules of procedure for the Executive Board, insofar as these relate generally or in the individual case to the Real Estate subgroup or the company’s direct and indirect subsidiaries and majority investments attributed to the Real Estate subgroup; 
e) decides on all other proposals for resolution by the Supervisory Board that relate exclusively or primarily to the Real Estate subgroup. 

(3) With the exception of (2) a), the Real Estate Committee is responsible in place of the Supervisory Board unless this is expressly prohibited by law; in this case the Real Estate Committee only prepares the decision by the Supervisory Board.

 

Section 15 – Nomination Committee

(1) The Nomination Committee is composed of the Chairperson of the Supervisory Board and two further shareholder representatives on the Supervisory Board. 

(2) The Nomination Committee suggests suitable candidates to the Supervisory Board for its proposals to the Annual General Meeting on the election of Supervisory Board members. In addition to the statutory requirements, the provisions of Section 2 of these rules of procedure apply, including the targets adopted by the Supervisory Board for its composition and the role specification and skills matrix for the Supervisory Board.

 

Section 16 – Reporting

(1) The Executive Board’s reporting obligations and the requirements for reporting are defined in the relevant statutory provisions, particularly Section 90 AktG, Art. 13 of the articles of association and Section 11 of the rules of procedure for the Executive Board. The Supervisory Board must ensure in turn that it is informed appropriately. 

(2) Each Supervisory Board member has the right to receive the Executive Board reports. Reports provided in text form are to be made available to each Supervisory Board member on request unless the Supervisory Board has decided otherwise. The proposals for the Annual and Consolidated Financial Statements and the corresponding auditors’ reports are to be made available to each Supervisory Board member.

(3) If the Chairperson of the Supervisory Board is notified between meetings of important developments or events that are of key significance for the assessment of the situation, the performance or the governance of the company, they must inform the Supervisory Board members of the reports and convene an extraordinary Supervisory Board meeting as necessary.

(4) The Supervisory Board members are obliged to make the information available to the company and the Supervisory Board that is necessary to comply with reporting obligations under applicable legislation, the GCGC or other applicable regulations.

 

Section 17 – Other

(1) The Supervisory Board and the individual committees may at their professional discretion appoint internal and external advisers to advise them on meeting certain responsibilities and invite them to the meetings. The company covers the expenses. The Executive Board is to be notified of any such appointments.

(2) These rules of procedure remain in effect until the Supervisory Board decides otherwise. The Supervisory Board may decide by simple majority not to follow these rules of procedure in individual cases.