Corporate Governance comprises all measures (structures, processes and rules) to ensure that actions of management and employees of a company are consistent with the interests of the shareholders. Since going public in 2005, Christ Water Technology AG (‘CWT’) has been pursuing the goal of sustainable ecologically and economically-oriented value enhancement.
With the Austrian Corporate Governance Code, CWT follows a regulation framework of standards for sound management and supervision of the company. This includes the standards of good corporate management common in international practice (OECD Principles, EU Transparency Directive) but also the provisions of Austrian corporation law in this respect (Börsegesetz, Gesellschaftsrechtsänderungsgesetz 2005, Unternehmensrechtsänderungsgesetz 2008). This enables a high level of transparency for all stakeholders of the company. The Code is publicly accessible on the homepage of the Austrian Working Group for Corporate Governance on www.corporate-governance.at.
To avoid insider trading, a policy based on the Emittenten-Compliance-Verordnung (ECV – Regulation on Compliance for Issuers, current version: 2008) of the Austrian Financial Market Authority has been in place at CWT since going public in 2005 and is implemented in the company by the Compliance. The Code of Conduct which came into force in 2007 is aimed at all employees and includes all the principles of conduct. It provides guidance on the fundamental ethical and legal duties of CWT employees.
The new Corporate Governance Code 2010 has now come into force – an evolution of the first version formulated in 2002 and amended in 2006 and 2008. The improvements primarily relate to the Supervisory Board regarding transparency and independence and compensation.
The Code comprises three rule categories:
- Legal requirement (“L”) – including compulsory regulations
- The “C” rules (Comply or Explain) in the Austrian Code of Corporate Governance are to be followed; any deviation must be explained and the reasons stated in order to comply with the Code
- Recommendation rules (“R”)
CWT applies the Corporate Governance Code in the version 2010 in full with the following explanations:
Composition of the Management Board
The Management Board consists of Mr. Richard Verreault, born 1963, who acts as Chairman of the Management Board and Chief Executive Officer of CWT AG since 19.12.2009 replacing Mr. Malek Salamor who resigned as chairman and member of the Management Board of CWT AG with effect of end of the day 18.12.2009 and has taken over an operational management position within CWT Group; Richard Verreault is responsible for the operational business of CWT Group as well as the whole Water Group within GLV Inc., ultimate parent company of CWT’s majority shareholder, and for the departments Research & Development, Human Resources, Marketing, Procurement and Manufacturing. Mr. Marc Barbeau, born 1967, acts as member of the Management Board since 19.12.2009 and has been appointed Chief Financial Officer with the responsibility for Finance & Controlling, Treasury & Taxes, IT, Legal Services & Risk Management, Investors Relations.
Mr. Harald Wegscheider, born 1960, has been member of the Management Board since 29.06.2006 as Chief Financial Officer and has been appointed Finance Director as per 19.12.2009 with the responsibility to join forces with the new CFO and to accompany the close co-operation of CWT Group companies with GLV Water Group. Mr Serge Schmitt, born 1949, left the Management Board in September 2009 after he acted as Chief Technology Officer for a one year period started in August 2008. Richard Verreault, who is President and Chief Operating Officer and Head of Water Group of GLV Inc and Marc Barbeau, who is Executive Vice-President and Chief Financial Officer of GLV Inc are appointed until December 19, 2014. Harald Wegscheider has been appointed until June 2011.
The share of female employees of the CWT Group is due to the fact of predominately technical job assignments roughly 21 % , the share of women in the Management and Supervisory Board is roughly 17 %. Gendering measures within CHRIST-Group include activities to promote the share of women in technical professions, opportunities to better balance job and family like flexible working time (e.g. part time work) and home office.
Composition of the Supervisory Board
With regard to the upcoming takeover of CWT AG by GLV Group the five former Supervisory Board members irrevocably resigned in September and November 2009. After the successful takeover of more than 80% of CWT shares by a subsidiary of GLV Inc., the extraordinary General Meeting held on 18.12.2009 reduced the number of the members of the Supervisory Board to three members. The new elected Supervisory Board composes of three members with high and long term experience in business development, operational management in water technology and related industries and legal affairs. Two members are Canadian citizens and one member is British citizen.
| Supervisory Board member |
First appointed |
End of current term |
| Laurent Verreault (Chairman, born 1941) |
December 18, 2009 |
until next AGM in June 2010 |
| Gwen Klees (born 1962) |
December 18, 2009 |
until next AGM in June 2010 |
|
Mike Froud (born 1959) |
December 18, 2009 |
until next AGM in June 2010 |
|
Dr. Leopold Bednar (Chairman, born 1948) |
September 26, 2005 |
until 18.12.2009 |
| Dr. Wolfgang Hochsteger (Dep. Chairman, born 1950) |
September 26, 2005 |
until 26.11.2009 |
| Gerda Egger (born 1964) |
May 24, 2006 |
until 26.11.2009 |
Emil Flückinger-Roth (born 1939)
|
May 24, 2006 |
until 18.12.2009 |
| Andreas Weissenbacher (born 1959) |
May 20, 2009 |
until 18.12.2009
|
Where applicable, other Supervisory Board mandates or similar functions in domestic or foreign listed corporations are disclosed: Laurent Verreault – NONE Gwen Klees – NONE, Mike Froud – NONE Dr. Leopold Bednar, Ms. Gerda Egger and Dr. Wolfgang Hochsteger are also Supervisory Board members of BWT AG. Mr. Andreas Weissenbacher is member of the Management Board of BWT AG.
Independency of the Supervisory Board “Independent” in the sense of the blanket clause of Rule 53 refers to members of the Supervisory Board whose business or personal relationship with CWT AG or its Management Board does not constitute a material conflict of interest allowing the member’s behaviour to be influenced. The criteria for independence are set in accordance with the guidelines of the Corporate Governance Code (Annex 1).
The Supervisory Board thus comprises or comprised the following independent members:
Laurent Verreault, Gwen Klees, Mike Froud, Dr. Leopold Bednar, Dr. Wolfgang Hochsteger, Gerda Egger, Emil Flückiger-Roth
Committees and activities of the Supervisory Board
The Supervisory Board of CWT AG includes experts in various fields and holds constructive meetings at regular intervals as well as for extraordinary topics which cover inter alia strategic, financial and personnel-related matters of the company. In this context, the CWT AG Supervisory Board is also involved in all important decisions of the Management Board as an advisory body.
The Audit Committee is the only committee established by the Supervisory Board of CWT AG. The following persons of the Supervisory Board formed the Audit Committee: Mr. Flückiger-Roth (Chairman), Dr. Bednar, Ms. Egger. The Audit Committee held 2 meetings in the year 2009 at which the annual financial statements have been analysed and audited and the internal control and risk system were discussed. On 19 December 2009 the new Supervisory Board also established an Audit Committee which comprises of Mr. Laurent Verreault and Mr. Mike Froud.
The Supervisory Board held four ordinary and five extraordinary meetings in the year 2009. The average presence quota exceeded 90%. No member of the Supervisory Board participated in less than 50% of the meetings. The main tasks of the Supervisory Board in the year 2009 are outlined in the Report of the Supervisory Board.
Internal Audit
The internal auditing duties are currently being performed by the departments Group Controlling, Group Treasury as well as Legal & Risk Management. The Management Board and Supervisory Board receive regular reports about important results of these auditing activities. There is no separate staff unit set up for internal audits.
Compensation Report The compensation schema of the members of the Management Board includes fixed and performance-related portions. Performance-related variable components within the remuneration refer to predefined personal goals of the respective member of the Management Board as well as to the achievement of pre-defined business results.
In 2009, 72 % of the total remuneration of the Management Board was fixed and 28 % performance-related. There is no company pension. There are also no Management Board entitlements or individual legal rights should the function be terminated.
The compensation of the members of the Supervisory Board has been approved for the financial year 2008 in the Annual General Assembly on 20 May 2009. The members of the Supervisory Board received for their activities in 2009 expense reimbursements totalling € 30,000 (2008: € 30,000). The basis remuneration for the members of the Supervisory Board amounts to € 5,000 per person, for the Chairman € 10,000. Beyond that, there were compensations of travel costs. The Supervisory Board bears joint responsibility for the development of the company and was therefore included in the stock option program of CWT AG started in 2006.
The Stock-Option Program for members of the Management Board and Supervisory Board of CWT AG as well as for leading employees of the CWT Group which was agreed from the Annual General Meeting of CWT AG on May 24, 2006 has been closed in June 2009. There were no options executed in 2009.
There is a valid liability insurance protection for the members of the Supervisory Board and the Management Board as well as for operational key managers of CHRIST Group (D&O insurance); the premium is paid from CWT AG.
Financial Reporting and Disclosure Due to substantial changes in the procedures and reporting structures the company had to take into account following the acquisition of a majority position in CWT AG shares by Eimco Water Technologies GmbH, a GLV-Group company, a new reporting and disclosure calendar has been published. The 2009 financial statements therefore will not be published according the legally required four months after the end of the reporting period as required by Rule 65.
Moreover the company does not comply do publish annual, half-yearly and any other interim financial reports in English due to the heavily reduced free-float of approx. 7 % (Rule 68).