Corporate Governance Report incl. declaration on Corporate Governance

In the following Declaration on Corporate Governance pursuant to Section 289f of the German Commercial Code (HGB) and the Corporate Governance Report pursuant to Section 3.10 of the German Corporate Governance Code (GCGC) the Executive Board reports - also for the Supervisory Board - on corporate management and corporate governance at MeVis Medical Solutions AG. The declaration contains a reference to the current Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act (AktG) and the German Corporate Governance Code (GCGC), relevant details of corporate governance practices as well as a description of Executive Board and Supervisory Board procedures.

Declaration of Conformity pursuant to section 161 AktG to the GCGC

On September 9, 2018 the Executive Board and Supervisory Board of MeVis Medical Solutions AG have published the current Declaration of Conformity to the German Corporate Governance Code in the version of February 7, 2017.

Bodies of the Company

The Executive Board, Supervisory Board and shareholders' meeting are the bodies of the Company according to law and statutes. As a public company, the MeVis Medical Solutions AG has a dual management system, which is characterized by a clear separation between the Executive Board, as the management body and the Supervisory Board as the supervisory body.

Executive Board and its procedures

The Executive Board manages the Company on its own responsibility with the aim of creating sustainable value. It runs the Company in accordance with the statutory provisions, the Company's articles of association and the rules of procedure for the Executive Board, and works in good faith with the other executive bodies. The Executive Board sets out the corporate objectives and strategies and, based on them, determines the corporate policy.

Currently, the Executive Board of MeVis Medical Solutions AG consists of two male members with contract durations until December 2020 and March 2021. Personnel changes or the expansion of the Executive Board are currently neither planned nor foreseen. Therefore, the Supervisory Board has specified the target for the percentage of women on the Executive Board to 0 % until December 31, 2020. For any future appointments of Executive Board members, the Supervisory Board will of course include qualified women early in the selection process for potential candidates.

The principle of overall responsibility applies: the members of the Executive Board share responsibility for management. The Executive Board works in a cooperative manner and the members keep each other up-to-date on important measures and events in their respective areas. In addition, internal meetings between the entire Executive Board and mid-level management take place at least once a month. The Supervisory Board has issued rules of procedure for the Executive Board, which documents all the rules of procedure and transactions that require approval.

The Supervisory Board and its procedures

The Supervisory Board consists of three members, elected by the shareholders, pursuant to the Company's statutes and convenes at least twice in the half year. The members of the Executive Board generally take part in the meetings of the Supervisory Board and report verbally and in writing on the individual items on the agenda, and answer the Supervisory Board members' questions. The members of the Supervisory Board also discuss certain matters outside the official Supervisory Board meetings or pass resolutions by circulation. The Supervisory Board has issued itself rules of procedure and regularly reviews the efficiency of its activities. On an annual basis the Supervisory Board report sums up the activities in the past fiscal year.

Executive and Supervisory Boards work closely together in the Company's best interests. During the financial year there were no conflicts of interest.

Objectives regarding the composition of the Supervisory Board

Pursuant to Section 5.4.1 GCGC, the Supervisory Board must specify concrete objectives regarding its composition, which are reviewed at regular intervals and which will be taken into account when proposing candidates at the Annual General Meeting either in regular elections and in replacement elections of the Supervisory Board:

  • The members of the Supervisory Board should, generally speaking, offer the knowledge, skills and relevant experience necessary in order to properly perform their duties and be sufficiently independent. The individual skills and knowledge of the members can complement each other to obtain this objective.
  • Members of the Supervisory Board should not serve past the end of the Annual General Meeting following their 75th birthday.
  • A member of the Supervisory Board who also serves on the management board of a publicly traded company may not serve on more than five supervisory boards of publicly traded companies not affiliated with the group of the company in which the member of the Supervisory Board serves on the management board or in supervisory bodies of companies with similar requirements.
  • No more than two former members of the Company's Executive Board may be members of the Supervisory Board.
  • The Supervisory Board should include at least one member who is particularly qualified for handling the Company's international activities. International experience can be gathered, for example, during periods spent abroad or by working for an international company.
  • The Supervisory Board must include at least one member who has expert knowledge in accounting or auditing (Section 100 (5) AktG).

Given its current composition, the Supervisory Board believes that it has largely fulfilled These goals. The diversity of the Supervisory Board is mainly reflected in the varying professional careers and activities as well as the varying experiences of the individual members, who complement each other very well in their entirety. 

Currently the Supervisory Board consists of three members with a 33 % female representation. The members have been elected until the Annual General Meeting in 2021. Personnel changes are currently neither planned nor foreseen. At the next regular Supervisory Board election in 2021, the aim is that the Supervisory Board should consist of at least 30 % women and 30 % men.

Corporate Governance Practices

Corporate governance of MeVis Medical Solutions AG, as a German stock corporation listed in the Prime Standard, is dictated first and foremost by the German Stock Corporation Act and the recommendations of the current Corporate Governance Code.

Being a manufacturer of medical software products, the statutory provisions of the German Medical Devices Act (MPG), the European directive on medical products (93/42/EEC), the Canadian Medical Devices Regulation (SOR/98-282), the US Code of Federal Regulations (21 CFR Part 820 - Quality System Regulation) as well as the requirements of the ISO 13485 standard (Medical devices - Quality management systems - Requirements for regulatory purposes) apply to the Company.Quality and quality management are cornerstones of our corporate governance. The quality management system is geared toward meeting our quality objectives as well as the quality requirements and expectations of our customers in relation to safety and performance, handling, availability, efficiency and punctuality. 

The Company's quality management system is certified to EN ISO 13485:2012 + AC 2012 by the notified body MEDCERT (ID-number 0482) in the development, manufacturing, final inspection and sale of software for diagnostic evaluation of medical image data as well as intervention support.

The management of MeVis Medical Solutions AG is also characterized by flat hierarchies with only one management level below the Executive Board, quick decision-making and team-oriented cooperation.

When filling management positions the qualification of candidates is the decisive criterion for the Executive Board of MeVis Medical Solutions AG. However, MeVis Medical Solutions AG pays attention to diversity and in particular the appropriate consideration of women when filling management positions. MeVis Medical Solutions AG welcomes efforts to increase the proportion of women in management positions and will continue to promote female employees according to their qualifications and skills in all levels and areas of responsibility. The proportion of women of the total number of employees of MeVis Medical Solutions AG is currently approximately 30 %. Already, 27 % of the leadership positions of the management level below the Executive Board are occupied with women. Our goal by the end of 2020 is to fill 30 % of the management positions with women.

Remuneration of Executive Bodies

MeVis Medical Solutions AG follows the recommendation of the German Corporate Governance Code to disclose individually the remunerations for the Executive Board and the Supervisory Board. The remuneration report is an integral part of the management report and also forms part of the Corporate Governance Report.

Transparency

To ensure maximum possible transparency, MeVis Medical Solutions AG regularly and promptly informs the capital market, the shareholders and the general public of the Company's financial situation as well as new circumstances and events of importance.

The financial statements and any interim reports are published within the deadlines stipulated for companies listed in the Prime Standard of the regulated market: within a period of four months for the annual financial statements and within a period of three months in the case of the semi-annual financial reports. The Company continues to publish quarterly reports instead of quarterly releases and publishes them within a period of two months.

Insider information that concerns the Company is published immediately pursuant to Section 15 of the German Securities Trading Act (WpHG). Shareholders and potential investors can obtain current information about topical events and recent developments on the internet. All press releases and ad-hoc announcements of MeVis Medical Solutions AG are available online at the Company website. In addition, MeVis Medical Solutions AG takes part in at least one analyst conference per year. Significant and semi-regular events in the financial calendar are published on the Company website.

Annual General Meeting and shareholders

The Annual General Meeting of MeVis Medical Solutions AG is called at least once a year and resolves on all such matters as provided by law, such as appropriation of profit, approval of the actions of the Executive Board and Supervisory Board and the statutory auditor with binding effect upon all shareholders and the Company. Each share carries one vote in shareholders' resolutions.

Each shareholder who registers in time is entitled to attend the Annual General Meeting or has an option of exercising his or her right to vote through a credit institution, association of shareholders, a proxy engaged by and bound by the instructions of Medical Solutions AG or a different proxy.

The invitation to the Annual General Meeting as well as the reports and information required for resolutions are published in accordance with the provisions of stock corporation law and made available online on the Company website.

Risk management

For MeVis Medical Solutions AG, dealing with risks in a responsible manner is a key element of good corporate governance. The Executive Board has installed an appropriate risk management and risk control system in the Company in order to identify, evaluate, monitor and control the risks arising from operating activities at an early stage. The Executive Board informs the Supervisory Board regularly about the current status of significant risks. The risk management system is continuously reviewed in accordance with the latest developments and adjusted where necessary. Further details and information on risk management can be found in the risk report beginning on page 34.

Accounting and auditing

MeVis Medical Solutions AG prepares its statutory financial statements and management report in accordance with the German Commercial Code (HGB). The Company also prepares individual IFRS financial statements in accordance with International Financial Reporting Standards (IFRS). The half-year financial report and the interim financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU.

The financial statements are prepared by the Executive Board and reviewed by the Supervisory Board. The Supervisory Board engaged PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Bremen, as the auditors elected by the Annual General Meeting for the fiscal year 2017, to audit the statutory financial statements for the fiscal year 2017 and the Executive Board engaged them to audit the individual IFRS financial statements. This approach ensures that no conflicts of interest affect the work of the auditors.

The audits of the financial statements for the short fiscal year 2016 were conducted by KPMG AG Wirtschaftsprüfungsgesellschaft, Bremen, in accordance with the generally accepted standards for the audit of financial statements promulgated by the German Institute of Public Auditors (IDW).

Directors' Dealings

Pursuant to Article 19 of the Market Abuse Regulation (EU) No. 596/2014 (MAR), members of the Company’s Executive and Supervisory Boards and related parties are required to announce all own transactions involving shares and debt securities of MeVis Medical Solutions AG that are traded on the stock market or related financial instruments (e.g. derivatives) where such transactions total or exceed € 5,000 in a calendar year. The Company immediately publishes such announcements on its website.

MeVis Medical Solutions AG

Executive Board