SAP’s Principles of Corporate Governance
SAP published its own Principles of Corporate Governance
as early as October 2001 and continually amended
them, where necessary, in the light of changes made
to the Code from time to time. When we last reviewed our
Principles in October 2007, we came to the conclusion
that the gap between them and the Code had greatly
reduced over time and that changes to the legislation and
current practice had made provisions in the Principles obsolete.
The Code, which had been continuously improved,
together with the pertinent legislation, which had gradually
covered more of the ground, made the maintenance of
our own Principles redundant. We therefore decided to
discontinue our own Principles – thereby improving the
clarity of our communications for the benefit of our shareholders,
not least those outside of Germany. In the future,
when discussing corporate governance standards, we will
refer to the Code only. SAP will continue to provide its shareholders with detailed information about its implementation
of the Code’s recommendations and suggestions by
publishing the annual declaration of implementation of
the Code and a corporate governance report in the SAP
annual report.
Code Recommendations
The new recommendations and additions to existing recommendations adopted in the Code in 2007 chiefly concern the establishment of nomination committees as committees of supervisory boards, and provisions in executive board rules of procedure. They relate to the principle of collective responsibility and to the majorities required for resolutions, and there are also recommendations concerning the manner in which supervisory boards and their audit committees handle compliance matters.
The SAP Executive Board has established various controls to ensure that the Company, its governing bodies, and its employees comply with the law. SAP’s Code of Business Conduct, published throughout the Group, contains standards for the day-to-day behavior of employees toward the Company and toward others. Within the Supervisory Board it is the Audit Committee that has particular responsibility for monitoring internal compliance controls. To evidence the Company’s implementation of the new recommendation in section 5.3.2 of the Code, compliance was added to the Audit Committee’s responsibilities listed in its rules of procedure.
At its regular meeting in October 2007, the Supervisory Board resolved to establish a Nomination Committee in accordance with the recommendation in section 5.3.3 of the Code. As recommended in the Code, the Nomination Committee is composed of shareholder representatives only. It is tasked with creating an appropriate requirements profile for Supervisory Board members in the light of the structure, size, and composition of the SAP Supervisory Board and to monitor the national and international fields for suitable people who are available to stand as candidates for election as shareholder representatives.
There were already provisions in the Executive Board rules of procedure concerning the principle of collective responsibility and responsibility for individually assigned areas of operations, and provisions in the Articles of Incorporation concerning majorities required for resolutions, corresponding to the new recommendation in section 4.2.1 of the Code.
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