Wind-turbines-First-Sensor
Corporate Governance

First Sensor AG welcomes the German Corporate Governance Codex which is presented and regularly updated by the Government Commission.

(Corporate) Declaration on Corporate Governance

Declaration of compliance to the Corporate Governance Code

The declaration of compliance to the Corporate Governance Code in accordance with section 161 of the Aktiengesetz (AktG – German Stock Corporation Act) is published in the Investor Relations section of the First Sensor AG’s website.

Disclosures on corporate governance

As a listed German stock corporation, the management of First Sensor AG is primarily defined by the German Stock Corporation Act and other statutory provisions of commercial and corporate law, as well as by the German Corporate Governance Code. The rights and duties of the corporate bodies (Executive Board, Supervisory Board, and Annual General Meeting) arise from the law and the Articles of Association.

Working methods of the Executive Board and the Supervisory Board

The functions of “management” and “monitoring” are clearly separated by law and in the Articles of Association. The Executive Board and the Supervisory Board form this dual management system at First Sensor AG. They are committed to acting in the interests of the shareholders and for the benefit of the company, and collaborate closely with the goal of sustainably increased the value of the company.

The Executive Board

At the time this report is being prepared, First Sensor AG is being managed by three Executive Board members. The Supervisory Board of First Sensor AG appointed Marcus Resch to the Executive Board with effect from March 14, 2020, until December 31, 2022. Marcus Resch had worked for TE Connectivity since 2015, where he managed the integration of ABB's "Entrelec" business from Darmstadt and Lyon from 2018.

Effective April 20, 2021, the Supervisory Board also appointed Sibylle Büttner, Director Operations, Business Unit Sensors, TE Connectivity Germany GmbH, and Robin Maly, Director Business Transformation, Business Unit Sensors, TE Connectivity Ltd. to the Executive Board with immediate effect and for a term of three years. Ms. Büttner has been responsible for production at the First Sensor Solutions sites since 2021. Mr. Maly has been part of the TE Sensors Senior Leadership Team as Head of Business Transformation since 2021. The members of the Management Board do not hold any supervisory board mandates or perform any secondary activities.

The curricula vitae of all members of the Management Board are available on the company's website.

The Executive Board and the Supervisory Board collaborate closely for the benefit of the company. The Executive Board develops the corporate strategy, agrees it with the Supervisory Board, ensures that it is implemented, and regularly discusses the status of its implementation with the Supervisory Board. In addition, it is responsible for the company’s annual and multi-year planning and for the preparation of the annual and consolidated financial statements, the combined management report of First Sensor AG and the Group, the half-year financial statements, and the quarterly reports. The Executive Board also ensures appropriate risk management and risk controlling. The Executive Board regularly, promptly, and comprehensively informs the Supervisory Board about all relevant issues for the Group with regard to the strategy, corporate planning, business development, financial position and results of operations, risk situation, risk and quality management, and adherence to the statutory provisions and the company’s internal guidelines, and works to ensure compliance with these by the Group companies. The Supervisory Board is immediately informed of any important events that could have a significant impact on the company. Significant measures require the approval of the Supervisory Board in accordance with the rules of procedure issued by the Supervisory Board.

If multiple Executive Board members are appointed, as a rule the Executive Board makes decisions at meetings by simple majority unless the law prescribes a greater majority of votes. The Executive Board decides on all major measures collectively. It coordinates the business areas as well as compliance with reporting obligations.


The Supervisory Board

The Supervisory Board appoints the Executive Board, monitors its actions in running the company and advises the Executive Board on its course of action. The framework for its activities is provided by the law and the articles of incorporation.

At regular intervals, the Supervisory Board discusses business development and planning as well as strategy and its implementation. It examines the annual and consolidated financial statements, the combined management report of First Sensor AG and of the Group and puts forward a proposal for the appropriation of retained earnings. It adopts the annual financial statement of First Sensor AG and approves the consolidated financial statements, whereby the findings of the audit reports from the auditor are taken into consideration. The Supervisory Board decides on the Executive Board's proposal for the appropriation of retained earnings and the Supervisory Board's report to the Annual General Meeting. In addition, the Supervisory Board concerns itself with monitoring compliance with legal provisions, official regulations and internal company guidelines by the company.

It is also part of the Supervisory Board's remit to appoint the members of the Executive Board and to define their areas of responsibility. Furthermore, the Supervisory Board decides upon the system for Executive Board remuneration and determines the actual remuneration for each Executive Board member in accordance with the system. It sets the targets for the variable remuneration and the relevant total remuneration for the individual members of the Executive Board. It also checks that the total remuneration is appropriate and regularly checks to ensure that the remuneration system is appropriate for the Executive Board. Major Executive Board decisions require the approval of the Supervisory Board.

The Supervisory Board convenes at least once every calendar quarter. Supervisory Board decisions are regularly made at meetings and, in accordance with the more detailed provisions of the rules of procedure, can also be made outside of a meeting. If an agenda item has not been properly announced, voting on this is permitted only if no members of the Supervisory Board objects before the decision is made. The Supervisory Board has a quorum if at least three members take part in decision-making and makes decisions by a simple majority unless otherwise required by law.

There are no advisory or other service agreements or contracts for work between members of the Supervisory Board and the company. There are no employment agreements between the employee representatives and the company.

The Chair of the Supervisory Board coordinates the body's work. Meetings of the Supervisory Board are convened and chaired by them or, if they are prevented from doing so, by their Deputy in accordance with the more detailed provisions of the articles of incorporation and the rules of procedure. The rules of procedure are published on the company's website.

The Chair is also responsible for recording the decisions. Outside of the regular meetings, they are in continual dialog with the Chair of the Executive Board concerning the topics of strategy, planning, business development, the risk situation, risk management and compliance in particular. Within reasonable limits, the Chair of the Supervisory Board is also available to discuss Supervisory Board-related issues with investors. The Executive Board and Supervisory Board have formulated guiding principles for this dialog. The Chair of the Supervisory Board decides whether or not to enter into specific dialog. They can call other members of the Supervisory Board or members of the Executive Board in for the conversation. Afterwards, they must inform the members of the Supervisory Board and the company of these conversations.

The Supervisory Board also meets on a regular basis without the Executive Board. It reviews how effectively it is discharging its tasks. The last extensive self-assessment took place in fiscal year 2020. The Supervisory Board issued a catalog of business transactions requiring approval. The Executive Board submits business transactions requiring approval to the Supervisory Board in the form of a draft proposal for discussion and authorization.

New members of the Supervisory Board can meet the members of the Executive Board and functional line managers to discuss fundamental and current topics and thus obtain an overview of the relevant issues at the company ("onboarding").


Shareholders and Annual General Meeting

The shareholders of First Sensor AG exercise their rights at the company's Annual General Meeting. The Annual General Meeting is chaired by the Chair of the Supervisory Board or by another Supervisory Board member appointed by them. If the Chair of the Supervisory Board does not take the chair at the Annual General Meeting and has not appointed another Supervisory Board member as their representative, then the Supervisory Board elects the Chair of the Annual General Meeting. Persons who are neither shareholders nor members of the Supervisory Board but are otherwise a part of the company are also eligible for election.

The Annual General Meeting takes place once a year. Each share grants one vote. The shareholders can exercise their voting rights at the Annual General Meeting either themselves or through a proxy of their choice or through a representative of the company who is bound by instructions. The Executive Board is also authorized to provide for shareholders to cast their votes in writing or via electronic communication even without participating in the Annual General Meeting (absentee voting). All documents and information concerning the Annual General Meeting are made available to shareholders on the company's website in good time. Shareholders also have the option of asking employees from Investor Relations questions about these documents.

In connection with the COVID-19 pandemic, the German Law on Measures under Corporate, Cooperative, Association, Foundation and Residential Property Law to Combat the Impact of the COVID-19 Pandemic (C-19 AuswBekG) created the option of holding annual general meetings for the year 2020 without physical attendance by the shareholders or their proxies (virtual annual general meetings). An appropriate change to the articles of incorporation has created the conditions to enable a flexible response to certain circumstances and to maintain the company's ability to act in the future as well.

The system for determining Executive Board remuneration will also be presented to the shareholders for approval for the first time at the Annual General Meeting addressing the financial statements for the fiscal year 2020. The corresponding remuneration report must then be presented to the 2022 Annual General Meeting for approval.


Accounting and audit

First Sensor AG prepares its consolidated annual financial report in accordance with IFRS guidelines. The annual financial report of First Sensor AG is prepared in line with the provisions of the HGB. The consolidated and annual financial statements are prepared by the Executive Board and audited by the auditor. The annual financial statements are adopted upon their approval by the Supervisory Board. The consolidated financial statements are also approved by the Supervisory Board. Throughout the audit process, the Supervisory Board collaborates closely with the Executive Board and the auditor. The auditor immediately informs the Chairman of the Supervisory Board of all issues and incidents relevant to the Supervisory Board’s work that arise during the audit process.

Transparency

The Executive Board of First Sensor AG is committed to transparent communication. First Sensor AG regularly, promptly, and comprehensively informs shareholders, analysts, and shareholder associations, as well as the media and interested members of the public, about the current business development and the Group’s situation. All of these recipients are treated equally and at the same time, and the capital-market-related information to be communicated is also published in German and English on the First Sensor AG website. This also includes changes in the shareholding in First Sensor AG and changes in the number of shares held by members of the corporate bodies.

Information on section 76 (4) and section 111 (5) of the German Stock Corporation Act (AktG) and on target achievement

IThe company's Executive Board has resolved a target figure for the proportion of women on the two management levels below the Executive Board in accordance with Section 76 (4) AktG By June 30, 2022, the proportion of women on the two management levels below the Executive Board shall have reached 20%. The first level below the Executive Board comprises 11 managers, of which three are female. Thus the target figure is more than met at 27.3%. The second management level below the Executive Board comprises five managers, of which one is female. Thus the target figure is met. 

Based on the recommendations of the GCGC and in accordance with the statutory provisions, the Supervisory Board has adopted a requirement profile for Executive Board members that also takes into account the requirements concerning diversity in this body. Thus key suitability criteria when selecting candidates for long-term succession planning are professional qualification for the area of responsibility to be taken over, leadership skills, previous accomplishments and industry knowledge. When appointing Executive Board members, the Supervisory Board takes diversity into account as well as the relevant professional qualifications. In the medium and long term, the Supervisory Board aimed to appoint a woman to the Company's Executive Board and, in order to avoid setting a target whose achievement the Supervisory Board did not consider realistic with the resources at its disposal and not in the Company's interest, had limited to a target of 0 %. With the appointment of Sibylle Büttner, a woman is now a member of the Executive Board. When searching for the qualifications of new Executive Board members, the Supervisory Board takes diversity into account as well as the relevant professional qualifications. The age limit for Executive Board members is guided by the statutory retirement age.

A diversity concept for the composition of the Supervisory Board that takes into account characteristics such as age, gender, nationality, and educational or professional background, for example, had neither been devised nor followed until now. One member of the Supervisory Board is female, thus the proportion of women is 16.7%. The proportion shall also not fall below this level in future.

Description of the diversity concept

Diversity is increasingly important for an international company like First Sensor. The company regards diversity and equal opportunities as important principles of its work environment, and has set this down in its Code of Conduct: “First Sensor does not tolerate any form of discrimination or harassment in the workplace whatsoever, whether on the basis of age, disability, origin, gender, political stance, union activity, ideology, race, religion or sexual orientation. We will not tolerate any discrimination whatsoever on the basis of these characteristics, or any sexual harassment or other personal attacks on individual persons. These principles apply to both internal collaboration and conduct towards external third parties. Our decisions concerning personnel, suppliers, customers, business partners, etc. are made exclusively on the basis of appropriate factual considerations, and never on the basis of other extraneous motives such as discrimination or pressure.”

Based on the recommendations of the GCGC and in accordance with the statutory provisions, the Supervisory Board has adopted a requirement profile for Executive Board members that also takes into account the requirements concerning diversity in this body. Thus key suitability criteria when selecting candidates for long-term succession planning are professional qualification for the area of responsibility to be taken over, leadership skills, previous accomplishments and industry knowledge. When appointing Executive Board members, the Supervisory Board takes diversity into account as well as the relevant professional qualifications. In the medium and long term, the Supervisory Board aimed to appoint a woman to the Company's Executive Board and, in order to avoid setting a target whose achievement the Supervisory Board did not consider realistic with the resources at its disposal and not in the Company's interest, had limited to a target of 0 %. With the appointment of Sibylle Büttner, a woman is now a member of the Executive Board. When searching for the qualifications of new Executive Board members, the Supervisory Board takes diversity into account as well as the relevant professional qualifications. The age limit for Executive Board members is guided by the statutory retirement age.

A diversity concept for the composition of the Supervisory Board that takes into account characteristics such as age, gender, nationality, and educational or professional background, for example, had neither been devised nor followed until now. One member of the Supervisory Board is female, thus the proportion of women is 16.7%. The proportion shall also not fall below this level in future.

Compliance management system

Compliance is a key element of sustainable business management at First Sensor. In order to ensure that the legal provisions and company-specific principles (Code of Conduct) are followed, a Group-wide compliance management system (CMS) has been established. The main features of this system are permanently available on the company’s website in the Our Responsibility, Compliance section. The goals of compliance management are derived from the company’s mission statement and define the desired conduct and actions – reliable, fair, honest, and trustworthy – of all employees with each other, including in relations with customers and suppliers. Internal and external whistle-blowers can report infringements of our principles and other compliance requirements confidentially to the Compliance Officer or completely anonymously to an external ombudsman. The Compliance Committee is responsible for assessing the reports received and taking measures if necessary. It also periodically reviews the effectiveness of the CMS and initiates changes if necessary. Violations of the compliance guidelines by the Executive Board result in the Supervisory Board being informed directly.

Note: The declaration of business management will be published in Internet on April 30, 2020 and will not be updated during the year.

Download:
- Corporate governance declaration (PDF)
Company
First Sensor is one of the world's leading suppliers in the field of sensor systems and part of TE Connectivity. In the growth market of sensor systems, First Sensor develops and produces customer-specific solutions for the ever-increasing number of applications in the industrial, medical, and mobility target markets. Our goal here is to identify, meet and solve the challenges of the future with our innovative sensor solutions early on.
Investor Relations
Our investor relations activities aim at raising the international publicity of First Sensor AG and at consolidating and extending the perception of our share as an attractive growth stock. This means we keep our online communication transparent, comprehensive and continuous in order to enhance your trust in our share.
Tailored Solutions
In the growth market of sensor systems, First Sensor develops and produces customer-specific sensors, electronics, modules and complex systems for the ever-increasing number of applications in the industrial, medical, and mobility target markets. As a solution provider the company offers complete development services from a first draft and proof of concept up to the development of prototypes and finally serial production. First Sensor offers comprehensive development expertise, state-of-the-art packaging technologies and production capacities in clean rooms from ISO class 8 to 5.
Competencies
In the growth market of sensor systems, First Sensor develops and produces customer-specific sensors, electronics, modules and complex systems for the ever-increasing number of applications in the industrial, medical, and mobility target markets. As a solution provider the company offers complete development services from a first draft and proof of concept up to the development of prototypes and finally serial production. First Sensor offers comprehensive development expertise, state-of-the-art packaging technologies and production capacities in clean rooms from ISO class 8 to 5.
Career
Innovation, excellence, proximity – these are our values, our ambition, our drive. Anything less is not an option. Our sensor solutions stand for technical innovation and economic growth. As such, they form the basis for the development and application of new technologies in almost all areas of life. We aim to shape this future together with you.

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