5. Diversity

One of the main concerns of good corporate governance is to ensure that appointments to the Supervisory Board, the Executive Board, and the two management levels below the Executive Board are appropriate to the specific needs of the business. To ensure this, the Executive Board and Supervisory Board of KION GROUP AG developed a joint diversity concept in 2017 and last amended it at the beginning of 2022.

Key criteria in this regard include, on the one hand, the professional and personal skills and qualifications of the members of the Supervisory Board, the Executive Board, and the two management levels below the Executive Board and, on the other hand, diversity in the composition of these two boards and two management levels – including an appropriate degree of female representation – and the independence of the Supervisory Board. In detail, this means that:

Composition of the Supervisory Board

Objectives for the composition of the Supervisory Board

In 2017, the Supervisory Board laid down specific requirements and objectives for its composition in recognition of the responsibilities and obligations assigned to it and taking into account the business needs of KION GROUP AG. These determinations were last reviewed and adjusted in February 2022. Besides having the minimum professional skills required to be a Supervisory Board member, as specified by law and the highest courts, all members of the Supervisory Board of KION GROUP AG should meet the following criteria:

  • Identification with the fundamental values and beliefs of KION GROUP AG: integrity, collaboration, courage, and excellence
  • Positive attitude toward the basic principles of responsible corporate governance
  • Personal integrity and a responsible approach to dealing with potential conflicts of interest
  • Ability to devote the expected amount of time required and compliance with the limit on the number of mandates that may be held at any one time

Other targets set by the Supervisory Board with regard to its composition are a standard age limit of no more than 70 at the time of appointment / election.

All of the current Supervisory Board members meet these requirements.

Profile of skills and expertise for the Supervisory Board

In connection with the objectives for its composition, the Supervisory Board also defined a profile of skills and expertise for itself in 2017. This profile is regularly reviewed as part of the Supervisory Board’s self-assessment. It was most recently reviewed in February 2022 and adjusted in line with the Company’s current requirements: Expertise and experience in environmental, social, and corporate governance (ESG) matters and expertise in alternative energies have been added to the profile with effect from 2022. The expertise area ‘in-depth understanding of the markets in Asia’ has been made more specific, and such expertise is now required to include an in-depth understanding of the Chinese market.

In the Supervisory Board’s opinion, when there is an objective of ensuring diversity in the composition of a board, there should be a focus on the skills and expertise of individual members and the balanced combination geared towards the company requirements of the personal qualities, experience, qualification, and knowledge represented in the Supervisory Board. Against this backdrop, the Supervisory Board developed a profile of skills and expertise. Accordingly, the following skills and expertise should be represented in the form of knowledge acquired through practically acquired experience and / or professional / academic training and knowledge (expertise):

Profile of skills and expertise for the Supervisory Board

Field of competence

Minimum SB members

Fulfilled in the overall body1

Material Handling and Intralogistics as well as related industries, including components and drive technology

4

Technological development and assessment
– including in particular environmentally friendly technologies, products and solutions, such as alternative energy sources

4

Service/after-sales business, as well as technological development in these areas

4

Digitization and automation

4

Development of international marketing and product range strategies

2

Business acquisitions and cooperations

2

Environment, Social & Governance (ESG), in particular

 

 

– Environmental Protection,

2

– Social & Labour conditions, including equal opportunities,

2

– Corporate governance

2

– Accounting and

1

– Auditing

1

Capital markets and international financing

2

Supervisory Board and/or Executive Management process and organization in companies with an international presence, including corporate culture

6

and in the economic areas of particular importance to the company

 

 

– EMEA,

2

– North and South America,

2

– China as well as

2

– rest of Asia

2

1

The criteria for professional suitability are based on a self-assessment by the Supervisory Board. A check mark means at least “good knowledge” and thus the ability to understand the relevant issues well and make informed decisions on the basis of existing qualifications and the training measures attended by the respective Supervisory Board member.

In its current composition, the Supervisory Board covers the profile of skills and expertise.

Independence of the Supervisory Board members

In 2020, the Supervisory Board defined what it considers to be an adequate number of independent Supervisory Board members. Accordingly, five shareholder representatives on the Supervisory Board should be independent of the Company and Executive Board (see recommendation C.7 of the GCGC). Dr. Macht, Mr. Ring, Dr. Reuter, Ms. Behrendt, Ms. Xu, and Dr. Dibelius are currently independent of the Company and Executive Board. Ms. Xu does not have any business and / or personal relationships with KION GROUP AG or any of its subsidiaries; the Supervisory Board views her role as an advisor to the anchor investor Weichai (through Weichai Power (Luxembourg) Holding S.à r.l., Luxembourg, a subsidiary of Weichai Power Co., Ltd., Weifang, People’s Republic of China) as unproblematic in this context. Dr. Dibelius has been a member of the Supervisory Board of KION GROUP AG since 2007, but the Supervisory Board still considers him to be independent. He has no business or financial ties to the Company or Executive Board.

Two shareholder representatives on the Supervisory Board should also be independent of the controlling shareholder (see recommendation C.9 of the GCGC). The Supervisory Board considers four shareholders to currently be independent of the anchor investor Weichai: Mr. Ring, Dr. Reuter, Ms. Behrendt, and Dr. Dibelius.

As regards the employee representatives, the Supervisory Board believes their role as representatives of the employees does not, per se, compromise their independence.

Diversity of the Supervisory Board

As 31.25 percent of the Supervisory Board members were female (five of the 16 members), the Supervisory Board met the statutory requirements regarding gender representation on supervisory boards pursuant to section 96 (2) AktG in 2021.

The shareholder representatives and the employee representatives are agreed that attaining the objectives in relation to diversity, in particular the objectives relating to the involvement of women and people from different cultural backgrounds, is considered to be in the interests of KION GROUP AG and a task that forms part of the collective responsibility of the entire Supervisory Board. The Supervisory Board therefore supports the inclusion of additional female members and members from different cultural backgrounds who meet the above criteria insofar as the skills requirements are met.

Nomination of Supervisory Board members

In the process to nominate suitable candidates for the Annual General Meeting’s election of four shareholder representatives to the Supervisory Board, the Nomination Committee and the Supervisory Board took all of the aforementioned targets, the profile of skills and expertise, and the diversity concept into consideration so that they were all covered. When proposing candidates to the Annual General Meeting in the future, the Nomination Committee and Supervisory Board will again take all of the aforementioned targets and the diversity concept into account and strive to ensure that the profile of skills and expertise is still achieved.

The Nomination Committee and Supervisory Board have no influence on the composition of the group of employee representatives on the Supervisory Board because the employees in Germany are free to choose whom they elect.