Declaration on Corporate Governance
The declaration on corporate management pursuant to sec. 289a of the German Commercial Code (HGB) comprises the declaration of conformity pursuant to sec. 161 of the German Stock Corporation Act (AktG), and descriptions of how the Management Board and Supervisory Board work, and of the composition and method of working of their committees.
Declarations of conformity
How the Management Board and Supervisory Board work
The dual management system of Youbisheng Green Paper AG, comprising a Management Board and a Supervisory Board, both of which have separate competencies, is a basic principle of the German Stock Corporation Act. Within the context of responsible corporate management, the Management Board and Supervisory Board work together closely and trustfully in management and oversight tasks for the benefit of the company.
The way in which the Management Board and Supervisory Board of Youbisheng Green Paper AG operate is based on the applicable laws, the articles of incorporation of Youbisheng Green Paper AG, the decisions taken by the Annual General Meeting of Youbisheng Green Paper AG, the rules of procedure for the Supervisory Board, the rules of procedure for the Management Board and the many recommendations set out in the German Corporate Governance Code.
The Supervisory Board appoints the members of the Management Board in conformance with the German Stock Corporation Act. The Supervisory Board advises and oversees the Management Board in the management of the company and decides, pursuant to § 7 of the articles of incorporation, on the number of members of the Management Board (according to the articles of incorporation the Management Board comprises one or more members). It can appoint one member of the Management Board as chairperson of the Management Board. § 4 and 5 of the articles of incorporation govern the level and allocation of the capital stock, and the authorisation to undertake certain capital transactions and how they may be undertaken, which is subject to the approval of the Supervisory Board. Restricted exclusion of subscription rights in certain circumstances also requires the approval of the Supervisory Board. The representation rules set out in § 9 of the articles of incorporation provide that, notwithstanding the joint representation arrangements, the Supervisory Board can authorize any member of the Management Board to represent the company solely and can waive the constraints imposed by § 181 of the German Civil Code (BGB). Mr HUANG Haiming has been authorised to represent the company solely and has also been exempted from the restrictions set out in § 181 Clause 1 2nd alt. of the German Civil Code (BGB), whereby § 112 AktG remains unaffected.
According to § 11 Sec. 1 of the articles of incorporation, the Supervisory Board consists of three members. All members of the Supervisory Board will be elected by the Annual General Meeting. In accordance with § 8 of the articles of incorporation, the Supervisory Board has provided rules of procedure for the Management Board. Under the rules of procedure, the Management Board is required to work together constructively with the company’s other governance bodies for the good of the company. The members of the Management Board are jointly responsible for the overall management of the company. They are required to work together constructively and keep each other informed of the main activities and events in their areas of responsibility. Each member is required to seek a resolution of the entire Management Board on issues relating to other areas of responsibility about which he/she has serious reservations, where such reservations cannot be eliminated by discussion with the other Management Board member. The Management Board takes decisions on all matters where a resolution by the Management Board is required by law, the articles of incorporation or the rules or procedure. In addition, there are rules on reciprocal representation, a description of the tasks of the Chairman of the Management Board, the mode of convening meetings of the Management Board, how meetings are to be conducted, the permitted methods of adopting resolutions, the required majorities and the documentation of meetings and resolutions. The rules of procedure also contain a list of the business matters requiring the approval of the Supervisory Board.
The Management Board is responsible for managing the company, for its strategic focus, managing business matters, planning the budget and defining and overseeing the operating segments. It is also responsible for ensuring that the company has an appropriate risk management and control system. Systematic risk management as part of value-driven corporate management is to ensure the timely identification, analysis and evaluation of risks and optimisation of risk positions.
The Supervisory Board has adopted rules of procedure for its own work.
These stress the duty of the Supervisory Board to work constructively with the other governance bodies in the performance of its duties, for the good of the company.
They also contain details of electing the chairperson and deputy chairperson, the method of convening meetings, how they are to be conducted, the permitted methods of adopting resolutions and the documentation of meetings and resolutions. The Supervisory Board decides whether the members of the Management Board should attend meetings of the Supervisory Board. The Management Board or a member of the Management Board regularly attends meetings of the Supervisory Board. Further, it sets out the requirement to work with the Management Board with regard to the appointment and dismissal of members of the Management Board to ensure long-term succession planning.
The Management Board and Supervisory Board maintain a regular exchange of information and ideas. The Management Board and Supervisory Board are jointly responsible for ensuring that the Supervisory Board receives sufficient information.
The Management Board provides the Supervisory Board with full and timely information on the development of the company, its current position, current risks and how they progress. It provides written and verbal reports on individual items on the agenda and resolution papers and answers questions asked by members of the Supervisory Board.
The Supervisory Board discusses and agrees the strategy with the Management Board.
The status of the implementation of strategic planning and possible deviations from the plans are reported to the Supervisory Board. Major decisions by the Management Board must be approved by the Supervisory Board. The Management Board also informs the Supervisory Board of the management of risks and opportunities in the group.
The Supervisory Board oversees the work of the Management Board and is directly involved in decisions of fundamental importance for the company. On a regular basis, the Supervisory Board receives written reports on the Group’s financial position, assets and results of operations. A detailed explanation of any discrepancy between the planned and actual business development is to be given to the Supervisory Board. Further, the Chairman of the Supervisory Board is informed directly and regularly of the current situation, important business events and significant upcoming decisions.
The work of the Supervisory Board is outlined every year in the Report of the Supervisory Board, which is commented on by the Chairman of the Supervisory Board at the Annual General Meeting.
The company's three-member Supervisory Board has not established any committees, as this is not deemed necessary or expedient; all relevant issues are handled by the full Supervisory Board. This applies in particular to the examination of the quarterly and annual financial statements and personnel issues relating to the members of the Management Board.
There is a D&O insurance policy for the members of the Management Board and Supervisory Board. A deductible applies for the members of the Management Board.
Information on important Corporate Management Practices
Ensuring a sustained rise in the value of the company is the guiding principle for the members of the Management Board and Supervisory Board of Youbisheng Green Paper AG. Having the confidence of investors and other stakeholders in effective and transparent management is a matter of prime significance. The aim of Youbisheng Green Paper AG’s investor relations activities is to achieve the level of transparency expected by the capital markets and give shareholders a true and fair view of the company. In keeping with the principle of fair disclosure, all shareholders and major target groups are treated equally in terms of the provision of information. The underlying rule is to provide the company's owners with timely and reliable information on major events at their company. Transparency also constitutes an opportunity to gain new investors from Germany and other countries. The Management Board and Supervisory Board therefore constantly strive to optimise communication to ensure a sustained and appropriate valuation of the company’s stock.
The company’s website at www.youbisheng-greenpaper.de also provides further information on the Youbisheng Green Paper Group, its business model and its products.