Supervisory Board activities in the 2016 financial year
We continually monitored the Board of Management’s activities in managing the business and the Group as a whole. Specifically, this supervisory role consisted of ensuring that these activities were lawful, compliant, appropriate, and efficient.
The primary prerequisites for fulfilling this role were the Board of Management’s written and oral reports. The Board of Management kept us regularly informed in good time on corporate strategy, planning, business development of the Group and its different segments, the risk situation, risk management, compliance, and any deviations in the business development from original plans, as well as significant business transactions involving the Company and its significant subsidiaries and associates.
The Board of Management fulfilled its duties to inform quickly and in full. The Board of Management’s reports met all statutory requirements, the standards of good corporate governance, and the criteria imposed on them by us with regard to both content and scope. In addition to the reports, we requested and received supplementary information. We reviewed, critically analyzed and verified the plausibility of these reports and other information.
The Rules of Procedure of the Board of Management and Supervisory Board include a list of transactions and measures for which the Board of Management has to obtain approval from the Supervisory Board. We met with the Board of Management to discuss and thoroughly review the business transactions and measures presented to us in the 2016 financial year for approval in line with the aforementioned document. We approved the transactions and measures submitted for resolution.
The frequency of plenary and committee meetings mean that we are in close contact with the Board of Management. The Board of Management also reports on individual issues in writing or in discussions between the meetings. In addition, the Chairman of the Supervisory Board is in contact with the Chairman of the Board of Management at regular appointments at which current business transactions, strategy issues, planning, business development, the risk situation, risk management, and compliance, as well as other significant events, are discussed.
In the 2016 financial year, six Supervisory Board meetings, a one-day off-site conference, and 22 meetings of the Supervisory Board committees took place. The overall average participation rate was 98 percent. Written votes were used where resolutions were required between the meetings.
In the Supervisory Board meeting on February 24, 2016, in the presence of the external auditor, we dealt with Deutsche Telekom AG’s annual financial statements and the 2015 consolidated financial statements, as well as the combined management report. Our approval of the 2015 annual financial statements was based on the recommendation of the Audit Committee, which had previously checked the documents in detail. We agreed to the Board of Management’s proposal on the appropriation of net income. We also approved the agenda for the 2016 shareholders’ meeting and the proposal to the shareholders’ meeting that the vacant position on the Supervisory Board following the resignation of Dr. Hubertus von Grünberg be filled by Dr. Helga Jung. In addition, we dealt with the results of the Supervisory Board’s self-evaluation for 2015, service quality in Germany, the rights to broadcast German soccer league games, and the development of business at T-Mobile Netherlands. The Board of Management reported comprehensively on the current situation and the most important financial and operational KPIs for the Company and its segments.
In the meeting before the shareholders’ meeting on May 24, 2016, the Board of Management reported in detail on the current situation and the financial and operational KPIs of the Company and its segments in the first quarter of 2016. We dealt with the most important business developments and in particular with the development of T-Mobile Polska. We also approved the decision of the Board of Management on the utilization of authorized capital in connection with the offer of a share dividend.
In the meeting on June 30, 2016, we dealt with matters concerning the Board of Management and decided to expand the Board of Management with the addition of the new Technology and Innovation Board department. The new department will be headed by Claudia Nemat effective January 1, 2017, who was previously responsible for the Europe and Technology department. We also appointed Srini Gopalan the new Board member responsible for Europe, effective January 1, 2017.
In the meeting on August 30, 2016, the Board of Management reported on the current situation and the financial and operational KPIs of the Company and its segments in the second quarter of 2016. We also reappointed Dr. Thomas Kremer effective June 1, 2017.
During the one-day off-site conference of the Supervisory Board and the Board of Management that was held the following day, we dealt with the Company’s strategy. We debated the status of the strategy, discussed individual aspects, and agreed on focal topics for the coming year. We were also given a market and competition analysis by an external expert.
In the Supervisory Board meeting on November 3, 2016, we adopted resolutions on the sale of Strato AG and on a change in the schedule of responsibilities of the Board of Management.
In our meeting on December 14, 2016, we adopted resolutions on a variety of Board of Management remuneration topics, such as target achievement for variable compensation, and on the reappointment of Reinhard Clemens. The Board of Management reported on the current situation and the financial and operational KPIs in the Company and its segments in the third quarter of 2016. A further focus of the meeting was the resolution on the budget for the 2017 financial year and on the annual financial plan. We also acknowledged the medium-term planning for 2018 to 2020 and dealt with the Group risk report.
In our plenary meetings and in the Audit Committee in particular, we also regularly verified that the Board of Management acted lawfully and ensured compliance with legal provisions and internal standards and policies, for example by setting up a Group-wide compliance organization. We also regularly met with the Board of Management to discuss the Group-wide risk management system that had been introduced. Based on our own reviews and on the audit reports from the external auditors, we came to the conclusion that the internal control and risk management system is functional and effective.