Report by the Supervisory Board
In accordance with statutory laws, the German Corporate Governance Code, the Articles of Association, and the bylaws, the Supervisory Board supervised and advised the Executive Board, focusing particularly on the C.A.R.E.+ strategy and on corporate planning, accounting, the course of business, the position and outlook, risk management, the internal control system, and compliance. The Executive Board reported regularly during and between the Supervisory Board meetings, both in writing and orally, particularly on significant events and developments in the business and market. The Supervisory Board also discussed and considered external views and developments concerning good corporate governance in Germany and other countries. Meetings were held face-to-face and via video and conference calls. Some members participated in face-to-face meetings by video or telephone.
The participation rate in meetings was 94.4% for the full Board, 95.8% for the Presiding Committee, 97.7% for the Audit Committee, 100% for the Finance Committee, and 77.8% for the Personnel Committee. The participation rates for the individual members who did not participate in every meeting were as follows: 5/6 full Board meetings for Hong Chow, Wolfgang Herz, Dr. Dr. Christine Martel, and Kirstin Weiland; 5/6 Presiding Committee meetings for Wolfgang Herz; 8/9 Audit Committee meetings for Dr. Dr. Christine Martel; and 1/3 Personnel Committee meetings for Reinhard Pöllath and Kirstin Weiland. There were no indications of any conflicts of interest relating to Executive Board or Supervisory Board members. Martin Hansson stepped down from his post effective July 31, 2022. The court appointed Uta Kemmerich-Keil as his successor.
The Executive Board and Supervisory Board worked together on the detailed preparation and follow-up of meetings. Discussions took place with and among Supervisory Board members prior to and after the meetings. A secure digital platform is available for drafts, documents, and comments.
At the beginning of 2023, the Supervisory Board began planning another efficiency audit to be conducted during the course of the year.
Full Supervisory Board
The Supervisory Board met six times (three face-to-face meetings and three video/conference calls). In two cases, the Supervisory Board adopted written resolutions. The meetings regularly addressed strategic orientation, business developments, interim financial statements, compliance, Executive Board matters, and significant individual transactions. Proposals for decision were carefully examined and discussed. All members of the Executive Board generally took part in the Supervisory Board meetings. Part of each meeting took place in the presence of the Supervisory Board members alone. The meetings early in the year focused on the prior year’s annual financial statements. At the mid-year meetings, the Supervisory Board discussed Executive Board matters, strategic orientation, and investment projects. The meetings at the end of the year concentrated on planning for the following year, investment projects, and strategic orientation.
On February 4, 2022, the Supervisory Board discussed the achievement of the Executive Board targets for fiscal year 2021 and set the total remuneration for Executive Board members. After intensive discussion, it also approved the newly prepared remuneration report for 2021.
On February 22, 2022, the Supervisory Board had an in-depth discussion on the development of the business and market shares. The Executive Board gave a detailed presentation of the business segments and regions. It reported at length on its strategy for expanding digital marketing and e-commerce in the coming years and on the development and integration of the Chantecaille business, which was acquired in early February. The auditor gave a thorough report on the scope, areas of emphasis, and findings of the audit. After intensive discussion, the Supervisory Board approved the annual and consolidated financial statements and the combined management report for Beiersdorf AG and the Group, including the Corporate Governance Statement and the combined Non-financial Statement for Beiersdorf AG and the Group. It thereby adopted the annual financial statements for the 2021 fiscal year. It discussed the Executive Board reports on dealings among Group companies and on the disclosures required under takeover law and approved the Supervisory Board’s report to the Annual General Meeting. It approved the proposal for the appropriation of net retained profits for fiscal year 2021. After an explanation of the changes versus the previous virtual meetings, it approved the agenda and proposals for decision for the online Annual General Meeting on April 14, 2022.
On April 14, 2022, the Supervisory Board first discussed the content and processes of the Annual General Meeting, prior to that meeting’s commencement. The Executive Board and management then gave a detailed presentation about the new China strategy. When its meeting resumed after the Annual General Meeting, the Supervisory Board looked at current business developments. The Executive Board gave a detailed presentation on the development of sales and market share in various product categories and brands. The Supervisory Board also discussed current challenges due to the continuing COVID-19 pandemic and in the supply chain. It decided on the audit engagement to be issued in accordance with the resolution of the Annual General Meeting.
On April 28, 2022, Nicola Lafrentz was appointed as an Executive Board member effective May 1, 2022. The Supervisory Board also discussed the precautions being taken by the company around current risks relating to energy and other factors.
On September 2, 2022, the Supervisory Board discussed business developments using reports on selected topics from the Executive Board’s areas of responsibility. The discussion focused on the key financial figures, the success of Thiamidol, and the development of the sun care business. The tesa SE Executive Board also reported on business performance. In addition, the Supervisory Board looked at the development of smaller brands and a report on sustainability. It adopted resolutions on investment projects, the successor to Mr. Hansson in the post of Deputy Chairman and member of multiple committees, and the audit engagement for the 2022 non-financial report.
On December 2, 2022, the Supervisory Board discussed the Group’s business performance up to the end of October 2022 using the key financial figures and development of market share by region, brand, and category, as well as looking ahead to the 2022 annual financial statements. The Executive Board also reported on individual aspects of the C.A.R.E.+ strategy and on the strategy for digitalization and e-commerce. The Supervisory Board approved the corporate planning for 2023, adopted the Declaration of Compliance with the German Corporate Governance Code for fiscal year 2022, set the targets and the target total remuneration for the members of the Executive Board for fiscal year 2023 and confirmed its appropriateness. Finally, the Supervisory Board approved the holding of another virtual Annual General Meeting in 2023.
In February 2023, the Supervisory Board discussed the achievement of the targets set for the Executive Board for the 2022 fiscal year, determined the total remuneration, and substantiated annual targets. It approved the annual and consolidated financial statements, along with the associated reports, and approved the proposals for decision for the Annual General Meeting on April 13, 2023.
The Supervisory Board prepares its work in six committees. These can make decisions in place of the Supervisory Board in individual cases. The chairpersons of the committees provided the Supervisory Board with regular detailed reports on the committees’ work. The Mediation Committee and Nomination Committee did not meet in fiscal year 2022.
The Presiding Committee (six meetings, of which one was face-to-face and five were by video or conference call) discussed business performance, Executive Board remuneration, and other Executive Board matters along with individual important transactions and investment plans. It prepared and followed up on the meetings of the full Supervisory Board.
The Audit Committee (nine meetings, of which four were face-to-face and five by video or conference call) primarily performed the preliminary examination of the annual and interim financial statements and combined management report, discussed the Executive Board’s proposal for the appropriation of net retained profits, verified the independence and discussed the appointment of the auditor, specified the areas of emphasis for the audit, and discussed the legislative changes affecting the audit process. The committee made a proposal to the Supervisory Board for the election of the auditor by the Annual General Meeting. The auditor reported to the Audit Committee on the key findings of the audit, the results of the audit review of the half-year report for 2022, and other auditing matters. The committee also discussed the content and auditing of the combined Non-financial Statement. The committee, whose meetings on audit-related matters were also attended by the auditor, regularly addressed business developments. Other matters regularly discussed comprised risk management, internal auditing, sustainability, the upcoming invitation to tender for auditing services, and the scope of non-audit services provided by the auditor.
The Finance Committee (five meetings, of which three were face-to-face and two by video or conference call) addressed, in particular, investments and the investment strategy. It received regular reports on the investment projects. Other topics were compliance, crisis management, and the Lieferkettensorgfaltspflichtengesetz (German Supply Chain Due Diligence Act). In one case, the Finance Committee adopted a resolution by written procedure.
The Personnel Committee (three meetings, of which two were face-to-face and one was by video or conference call) discussed the long-term planning of appointments to positions in and beneath the Executive Board. It welcomed measures on diversity and inclusion and heard comprehensive reports at each meeting on the progress achieved, based on key performance indicators. Other focus areas were new work environments and the preparation of the qualification matrix on the skills and expertise of the Supervisory Board, which is required under the German Corporate Governance Code.
Annual Financial Statements and Audit
The annual financial statements are prepared in accordance with the requirements of the Handelsgesetzbuch (German Commercial Code, HGB), and the consolidated financial statements in accordance with the International Financial Reporting Standards (IFRSs), as adopted by the EU, and taking into account the applicable interpretations of the IFRS Interpretations Committee. The supplementary requirements of German law are also applied. The auditor audited the 2022 annual financial statements and consolidated financial statements, the combined management report for Beiersdorf AG and the Group, and the combined Non-financial Statement for Beiersdorf AG and the Group, and issued unqualified audit opinions for them. With regard to the Executive Board’s report on dealings among Group companies (§ 312 Aktiengesetz (German Stock Corporation Act, AktG)) required due to the majority interest held by maxingvest ag, Hamburg, the auditor, following the completion of the audit in accordance with professional standards, confirmed that the information contained therein is correct; that the compensation paid by the company with respect to the transactions listed in the report was not inappropriately high; and that there are no circumstances which would justify, in relation to the measures specified in the report, a materially different opinion than that held by the Executive Board.
The Supervisory Board received the fiscal year 2022 annual financial statements, consolidated financial statements, combined management report for Beiersdorf AG and the Group, including the combined Non-financial Statement for Beiersdorf AG and the Group, the report on dealings among Group companies, and the auditor’s reports immediately after their preparation. Prior to this, the Supervisory Board received and discussed drafts of the provisional financial statements. The auditor participated in the deliberations of the Supervisory Board on the annual financial statements of Beiersdorf AG and the Group and reported on the key findings of the audit to the Audit Committee and to the full Supervisory Board. The Supervisory Board’s examination of the annual financial statements and consolidated financial statements, combined management report, and combined Non-financial Statement for Beiersdorf AG and the Group, the report on dealings among Group companies, including the concluding declaration by the Executive Board, and the auditor’s reports did not raise any objections. At an ordinary meeting on February 21, 2023, the Supervisory Board concurred with the auditor’s findings and approved the annual financial statements of Beiersdorf AG and the consolidated financial statements for the year ending December 31, 2022; the annual financial statements of Beiersdorf AG are thus adopted. The Supervisory Board endorsed the Executive Board’s proposal on the appropriation of retained net profits.
The Supervisory Board would like to thank everyone who made 2022 a successful year for Beiersdorf. Employees and business partners impressed Beiersdorf’s discerning consumers with hard work and dependability, and above all with innovation and sustainability in skin care and adhesives. The support and constructive criticism of its consumers continues to future-proof Beiersdorf for all shareholders, even amid the ongoing challenges.
Hamburg, February 21, 2023
For the Supervisory Board