Working methods of the Management Board and Supervisory Board

As an Aktiengesellschaft (stock corporation) incorporated under German law, TLG IMMOBILIEN AG has a dual management system consisting of the Management Board and the Supervisory Board. They work closely together to further the interests of the company. The Management Board runs the company whilst the Supervisory Board advises and monitors it. The shareholders of TLG IMMOBILIEN AG exercise their rights in the general meeting.

The intensive, continuous dialogue between the two Boards serves as the basis of efficient, strategic corporate management. The Management Board develops the strategy of TLG IMMOBILIEN AG, coordinates it with the Supervisory Board and ensures that it is implemented. The Management Board discusses the progress of the implementation of its strategy with the Supervisory Board at regular intervals. The Chairperson of the Supervisory Board is in regular contact with the Management Board and provides it with guidance on matters of strategy, planning, business development, the risk situation, risk management and compliance. The Management Board reports to the Chairperson of the Supervisory Board on significant events that are of key relevance to an assessment of the situation and developments and to the management of the company and its group companies. The Chairperson of the Supervisory Board then notifies the Supervisory Board and, if necessary, convenes an extraordinary meeting of the Supervisory Board.

In accordance with the Articles of Association and rules of procedure of the Management Board, transactions of fundamental significance are subject to the consent of the Supervisory Board. The members of the Management Board must report any conflicts of interest to the Supervisory Board and their fellow Management Board members immediately. Significant transactions between members of the Management Board or related parties and the company require the approval of the Supervisory Board, as does any secondary employment outside of the company.

The Management Board of TLG IMMOBILIEN AG

The Management Board of TLG IMMOBILIEN AG currently consists of two equal members. The Management Board is responsible for the management of the company in accordance with the statutory provisions, the Articles of Association and the rules of procedure for the Management Board. It is obliged to serve the interests of the company. The Management Board develops the strategy of the company, coordinates it with the Supervisory Board and ensures that it is implemented. It is also responsible for reasonable risk management and control and for submitting regular, prompt and comprehensive reports to the Supervisory Board.

The Management Board performs its management duties as a collegial body. The Board’s overall responsibility for management notwithstanding, the members of the Management Board manage the divisions to which each has been assigned by the Management Board on their own authority. The divisions are divided between the members of the Management Board as set out in the rules of procedure for the Management Board (details here).

The work of the Management Board is governed in more detail by rules of procedure. The rules of procedure stipulate that the strategic orientation of the company and the strategic allocation of resources are determined by the entire Management Board. Additionally, measures and transactions which are of extraordinary significance to the company and/or group companies, or which involve an extraordinarily high economic risk, require the prior approval of the entire Management Board. Furthermore, the rules of procedure and Articles of Association require certain transactions of fundamental significance to be approved by the Supervisory Board or one of its committees in advance.

The Management Board provides the Supervisory Board with regular, prompt and comprehensive reports on all relevant matters of strategy, planning, business development, risk, risk management and compliance.

The Supervisory Board of TLG IMMOBILIEN AG

The Supervisory Board of the company currently consists of six members (details here). It monitors and advises the Management Board and works closely with the Management Board to further the interests of the company. It is involved in all decisions of fundamental importance. None of the current members of the Supervisory Board has occupied a position on the Management Board within the company in the past. Additionally, there were no consultants or other service or labour contracts between members of the Supervisory Board and the company in the reporting year.

Its rights and duties are determined by the statutory provisions, the Articles of Association, the rules of procedure for the Supervisory Board and the rules of procedure for the Management Board. It appoints and dismisses the members of the Management Board and, together with the Management Board, ensures long-term succession planning.

It works both in plenary sessions and in committees. The committees work to improve the efficiency of the Supervisory Board’s activities. The chairpersons of the committees regularly report to the Supervisory Board on the work of their committees. In line with its rules of procedure, the Supervisory Board must convene at least twice every six months. Otherwise, it convenes whenever the interests of the company require it.

In particular, the members of the Supervisory Board are selected by virtue of their expertise, abilities and professional suitability. In its rules of procedure, the Supervisory Board has set out the requirement that at least one independent member of the Supervisory Board must be an expert in either accounting or auditing (Sec. 100 (5) clause 1 of the German Stock Corporation Act (AktG)). According to Sec. 100 (5) clause 2 AktG, all of the members of the Supervisory Board must also be familiar with the sector in which the company operates. Furthermore, the Supervisory Board sets specific targets for its composition and develops a profile of qualifications for the board as a whole. With regard to its composition and as part of the specific situation of the company, it takes the following into consideration: shareholder structure, current and potential conflicts of interest and competitive relationships, other professional activities, the number of independent members, an age limit of 75 and the diversity of the members of the Supervisory Board. Besides the statutory requirements (Sec. 100 AktG), the proposals of the Supervisory Board regarding the appointment of members of the Supervisory Board adhere to the regulations of the German Corporate Governance Code as amended concerning the personal requirements of Supervisory Board members and the composition targets set by the Supervisory Board. Before being appointed, candidates must undertake to continue to meet the personal requirements considered essential for appointment by the Supervisory Board as well as the criteria relevant to their selection. The Company has followed the specific recommendations of recommendation 5.4.1 (2) and (3) of the Code which concern the composition of the Supervisory Board under certain criteria, the inclusion of these objectives in the recommendations of the Supervisory Board and the publication of the objectives and their implementation status in the Corporate Governance Report.