2017 Integrated Report – Departure into a new era

Cooperation between the Management Board and Supervisory Board

As a German Aktiengesellschaft (joint stock corporation), DB AG is subject to a two-tier management and monitoring structure in the form of the Management Board and Supervisory Board. These two bodies are strictly segregated in terms of both their membership and their competencies. The Management Board manages the company solely on its own joint responsibility. The Supervisory Board monitors the activities of the Management Board and is responsible for appointing members to, and dismissing members from, the Management Board.

In the interests of optimum company management, we see it as very important for the Management Board and the Supervisory Board to maintain continuous dialog with each other and to work together efficiently and in an atmosphere of mutual trust for the benefit of the company. The Management Board provides the Supervisory Board with regular, prompt, comprehensive information on all matters relevant to the company, particularly those concerning planning, business development, risk position and risk management, as well as the internal control system.

An overview of the members of the Management Board and of the Supervisory Board of DB AG, including the mandates they hold, is provided in the Notes to the consolidated financial statements.

Management Board

The Management Board manages the company solely on its own joint responsibility. It is required to safeguard the interests of the company and is committed to achieving the sustainable growth of enterprise value. It specifies the business targets and defines the strategies to be implemented in order to attain these targets. The Management Board is responsible for making decisions on all matters of fundamental and key importance for the company.

Following the resignation of Dr. Rüdiger Grube from DB Group as of January 30, 2017, in accordance with provisions on representation of the bylaws of the Management Board, the CFO took over temporary responsibility for managing the Board division of the CEO and the Technology and Quality Board division. By resolution adopted by the Supervisory Board on March 22, 2017, the functions of the Finance/Controlling Board division were incorporated into the Board division of the CEO in connection with the appoint­­ment of Dr. Richard Lutz as CEO. Accordingly, Finance/Controlling no longer exists as a separate Board division. At the same time, DB Long-Distance, DB Regional and DB Arriva were pooled in a separate division – Passenger Transport – that is managed by Berthold Huber. The business units DB Schenker and DB Cargo were pooled in a new Board di­­vi­­sion – Freight Transport and Logistics – which is also being managed by Berthold Huber in the interim, until Alexander Doll, who has been appointed to the Management Board in charge of Freight Transport and Logistics, joins the company. Traffic and Transport no longer exists as a separate Board division. Equally, on March 22, 2017, the former Technology and Quality Board division was expanded to include digitalization and IT (which were previously in the CEO’s division) and the name of the division changed to Digitalization and Technology. This Board division was managed in the interim by Dr. Richard Lutz until Prof. Sabina Jeschke took up her Management Board appointment in charge of Digitalization and Technology.

The Management Board of DB AG therefore continues to consist of six divisions. In addition to the CEO’s division, there are Human Resources and Legal Affairs, Digitalization and Technology, Passenger Transport, Freight Transport and Logistics as well as Infrastructure.

Management Board members must discuss any conflicts of interest with the Supervisory Board immediately and must also provide their colleagues on the Management Board with information about any such conflicts. There were no conflicts of interest during the year under review.

Supervisory Board

The Supervisory Board advises and monitors the Management Board in its management of the company.

In line with the requirements of the German Co-Determination Act (Mitbestimmungsgesetz; MitbestG), the Supervisory Board of DB AG consists of 20 members, of whom ten members are shareholders’ representatives and ten members are employee representatives. Some of the shareholders’ representatives are seconded to the Supervisory Board and some are elected at the Annual General Meeting. The employees’ representatives on the Supervisory Board are elected in line with the requirements of the Co-Determination Act.The Chairman of the Supervisory Board of DB AG is Professor Dr. Dr. Utz-Hellmuth Felcht. Personal or business relationships between individual Supervisory Board members and DB Group are stated in the Notes to the consolidated financial statements.

Supervisory Board members must immediately disclose any conflicts of interest with the Supervisory Board and must also provide the Supervisory Board with information about any such conflicts. When Johannes Schmalzl was appointed managing director of the Chamber of Industry and Commerce for the Stuttgart region, effective November 1, 2017, he indicated that his new responsibility might entail a possible conflict of interest with regard to the Stuttgart 21 project. He therefore abstained from the Supervisory Board’s subsequent adoption of resolutions relating to the Stuttgart 21 project and was not involved in any Supervisory Board decisions connected with the same. Johannes Schmalzl resigned his mandate on the Supervisory Board of DB AG with effect from the end of December 31, 2017.

Transactions of fundamental importance and other Management Board decisions with a major impact on the business operations and on the assets, financial or profit situation of the company require the authorization of the Supervisory Board. The Management Board reports to the DB Supervisory Board on the development of business and the position of DB Group at least once every quarter. The Management Board also reports to the Supervisory Board regularly on all measures implemented within the company that are intended to ensure compliance with laws and corporate regulations. In addition, the tasks of the Supervisory Board include the auditing and approval of the company’s annual financial statements and the auditing of the company’s management report, the consolidated financial statements, and the Group management report. The Supervisory Board also monitors the accounting process, the effectiveness of the internal control system, the risk management system and the internal audit system, as well as the process of auditing the annual financial statements.

In addition, the Chairman of the Supervisory Board is in regular contact with the Management Board and specifically the Chief Executive Officer to discuss company strategy, business development and risk management. The Chairman of the Supervisory Board receives regular reports from the Chief Executive Officer on all events that are of key importance for assessing the company’s situation and development, as well as for its management.

There were no consultancy agreements or other comparable service agreements or contracts for services be­­tween the members of the Supervisory Board and DB AG in the year under review.

Supervisory Board committees

In order to enable it to carry out its monitoring activities to the best of its abilities, the Supervisory Board of DB AG has made use of the option of setting up further committees in addition to the Mediation Committee, which has to be set up in accordance with the Co-Determination Act, and has set up an Audit and Compliance Committee and a Personnel Committee. An overview of the committee members can be found in the Notes to the consolidated financial statements. Details of the work performed by the individ­­ual committees in the year under review are included in the report of the Supervisory Board. Details of the functions of the individual committees can be found on our web site.

Share of women on the Management Board and Supervisory Board

Five women currently serve on the Supervisory Board of DB AG. A target of a 30% share of women on the Supervisory Board of DB AG was set, with a deadline of June 30, 2022.

One woman currently serves on the Management Board of DB AG. A target of a 30% share of women on the Management Board of DB AG was set, with a deadline of June 30, 2022.

At the other management levels of DB AG, the following targets have been set (deadline December 31, 2020): at the first management level below the Management Board a 25.5% share of women, and at the second management level below the Management Board a 28.6% share of women.