The role of the supervisory board is to appoint the members of, and supervise, the executive board.

We require the work of the supervisory board to adequately reflect shareholder and stakeholder interests. We therefore support the establishment of key committees staffed by independent supervisory board members. Such committees can be responsible, for example, for electing the auditors or monitoring the efficiency of the supervisory board’s activities.

Members can be regarded as independent if they do not have any personal relationship with a company or its executive board (“independence in mind”).

We therefore expressly welcome a minimum quota for external members of supervisory boards and require qualified independence in the case of audit, compliance and risk committees.

We reject performance-related pay for supervisory board members who are members of the audit, compliance and risk committees.

We restrict the number of directorships for DAX and EUROSTOXX companies and distinguish between directorships for non-executive directors and executive directors:

• Non-executive directors holding up to five directorships are not regarded as critical.
• Executive directors holding up to three directorships are not regarded as critical.
• The chair of a supervisory board counts double.
• Foreign directorships are included.

We decide on a case-by-case basis for mid-cap companies.

In the case of smaller companies, we support the appointment of professional supervisory board members if these promote corporate governance and an equity culture. As a matter of principle, supervisory board members should be elected on an individual basis.

The company should report on supervisory board members’ attendance of supervisory board and committee meetings on an individualised basis.

The following factors are considered problematic when it comes to votes approving the actions of the supervisory board:

• Conflicts of interest, lack of independence and failure to perform supervisory duties with respect to the executive board.
• Incorrect declaration of conformity and certain pending proceedings.
• Clear and persistent failure to comply with key ESG and governance guidelines.