Arcandor AG | Investor Relations | Corporate Governance

In the Arcandor Group corporate governance means responsible corporate management and control aimed at longterm value enhancement. This increases the confidence of national and international investors, the finance markets, business partners and staff and the public in the Arcandor Group.

Bases and framework of Corporate Governance

The general legal conditions for corporate governance are to be found mainly in stock corporation law. In addition, in February 2002 the government commission formulated in the German Corporate Governance Code uniform principles for German corporations to make the regulations for good corporate governance transparent, particularly for foreign investors. The Corporate Governance Code was extended in May 2003, and most recently in June 2006 and June 2007.
In the reporting period, Arcandor AG complied with the recommendations of the version of the German Corporate Governance Code dated June 12, 2006 with two exceptions:
The interim report for the calendar half year was not published within 45 days and the consolidated financial statements were not published within 90 days because Thomas Cook Group plc, which was newly created by the merger of Thomas Cook AG with My Travel plc, and its affiliated companies had to be included for the first time in the consolidated financial statements of Arcandor AG. This required not only greater work and time, but was compounded by the fact that the financial year for Thomas Cook Group plc did not end at the same time as Arcandor AG on September 30, 2007, but only on October 31, 2007.
The D & O insurance concluded for members of Arcandor executive bodies does not include a retention. We remain of the opinion that the agreement of a retention is hardly suitable for increasing the sense of responsibility with which the members of the Management Board and the Supervisory Board discharge the duties and functions entrusted to them. Furthermore, a retention is not usual in other countries or at many German companies.
In this context, Arcandor AG will adhere to all recommendations of the version of the German Corporate Governance Code dated June 14, 2007 in future – with the exception of the retention for D & O insurance.
Further information on this subject – including the complete wording of the Code – can be obtained from the Government Commission Website at 'Deutscher Corporate Governance Kodex'.

German Corporate Governance Kodex

The Management Board and Supervisory Board of Arcandor AG have approved a declaration of conformity to the 'Deutscher Corporate Governance Kodex' in accordance with Section 161 German Stock Corporation Law.

The Shareholders have the right to attend the Annual General Meeting and exercise their voting rights there. Each no-par value share entitles to one vote. The reports and documents, including the AGM agenda, required by law for the Annual General Meeting are also published on the Internet site.

Arcandor AG has a dual management and control structure in the Management Board and Supervisory Board in accordance with German stock corporation law. The Management Board and Supervisory Board work closely together on the basis of a balanced division of duties and responsibility for the benefit of the corporation. The legal framework for the cooperation is provided by the corporation’s articles of incorporation and the Supervisory Board’s and Management Board’s rules of procedure.

Since the introduction of the Corporate Governance Code Arcandor AG has published a financial calendar on its Website. This gives prompt information about relevant dates and events. Furthermore, all IR, press and ad-hoc reports released since 2004 are accessible on the Internet. Finally, all, including earlier, Declarations of Compliance with the code of the company have been made accessible on the Website. Insider information directly concerning Arcandor AG is published immediately in the form of ad-hoc reports, unless later publication is advisable owing to special corporate interests.

To enable early identification of material risks, Arcandor AG has set up a risk management system. A detailed account is given in the consolidated management report. Consolidated accounting is done in accordance with IFRS (International Financial Reporting Standards).