Declaration of Compliance with the German Corporate Governance Code
Declaration by the Board of Directors and the Supervisory Board of artnet AG on the recommendations of the
"Government Commission of the German Corporate Governance Code" in accordance with Section 161 of the German Stock Corporation Act
The Board of Directors and the Supervisory Board of artnet AG hereby declare, in accordance with Section 161 of the German Stock Corporation Act (Aktiengesetz – AktG),
that the recommendations of the Government Commission of the "German Corporate Governance Code" as amended on June 18, 2009 – published in the electronic Federal Gazette (Bundesanzeiger) on August 5, 2009 – are generally complied with. The following recommendations are not applied:
1. No. 3.8 para. 2 sentence 2 "A similar deductible must be agreed upon in any D&O policy for the Supervisory Board."
artnet AG does not believe that the due care and diligence that the members of its Supervisory Board exercise in discharging their duties could be increased further by agreeing a deductible. For this reason, artnet AG does not intend to change existing D&O insurance policies that do not provide for such a deductible.
2. No. 4.2.1 "The Management Board shall be comprised of several persons and have a Chairman or Spokesman. By-laws shall govern the work of the Management Board,
in particular the allocation of duties among individual Management Board members, matters reserved for the Management Board as a whole, and the required majority for Management Board resolutions (unanimity or resolution by majority vote)."
Since its constitution, the Board of Directors of artnet AG has comprised one person. By contrast, the Board of the subsidiary Artnet Worldwide Corp. in New York, which is responsible for operations within the Group, comprises several persons.
Given the relatively low management effort and expense at artnet AG and to avoid unnecessary expenditure, the Company currently does not see any need to increase the size of its Board of Directors. As a result, there is no need to draw up by-laws.
3. No. 5.1.2 para. 2 sent. 3 "An age limit for members of the Management Board shall be specified."
artnet AG considers a provision of this nature to be inappropriate because general age limits would unduly limit the shareholders’ and Supervisory Board's discretionary powers when selecting members of the Board of Directors and Supervisory Board.
4. No. 5.1.3 "The Supervisory Board shall issue Terms of Reference."
The Supervisory Board of artnet AG comprises only three members. Previous experience of the cooperation of these members shows that Terms of Reference are not necessary.
5. No. 5.3.1, No. 5.3.2, and No. 5.3.3: In these sections, the Code recommends that the Supervisory Board form committees, an Audit Committee and a Nomination Committee.
As the Supervisory Board of artnet AG comprises only three members, it does not make sense to form committees. The tasks envisaged for the Audit Committee and the Nomination Committee are undertaken jointly by the Supervisory Board as a whole.
6. No. 5.4.6 para. 2 sent. 1: "Members of the Supervisory Board shall receive fixed as well as performance-related compensation."
The articles of incorporation of artnet AG do not provide for performance-related compensation for the members of the Supervisory Board. Following a lengthy debate, the Board of Directors and the Supervisory Board reached the conclusion
- that performance-related compensation of Supervisory Board members is not consistent with the duties of the Supervisory Board, whose primary objective is to oversee the Board of Directors.
- The Board of Directors and the Supervisory Board of artnet AG hereby declare that the recommendations of the Government Commission of the "German Corporate Governance Code" as amended on June 6, 2008 – published in the electronic Federal Gazette (Bundesanzeiger) on August 8, 2008 – have generally been complied with since the last Declaration of Conformity dated December 5, 2008. The recommendations from No. 3.8 para. 2, No. 4.2.1, No. 5.1.2 para. 2 sent. 3, No. 5.1.3, No. 5.3.1, No. 5.3.2, No. 5.3.3, and No. 5.4.6 para. 2 sentence 1 were not applied.
Berlin, December 5, 2009
The Board of Directors The Supervisory Board