The Supervisory Board of FMC AG & Co. KGaA advises and supervises the business activities as conducted by the General Partner and performs the other duties assigned to it by law and by the Articles of Association. It is involved in strategy and planning as well as all matters of fundamental importance for the Company.
The Supervisory Board of FMC AG & Co. KGaA consisted in the year under review of the following members: Dr. Gerd Krick (until May 17, 2018, until then at the same time Chairman), Dr. Dieter Schenk (until May 17, 2018 Vice Chairman, since then Chairman), Mr. Rolf A. Classon (since November 30, 2018 Vice Chairman), Mr. William P. Johnston, Ms. Deborah Doyle McWhinney (resigned effective November 1, 2018); Ms. Pascale Witz and Professor Dr. Gregor Zünd (since October 29, 2018).
Because of his extraordinary contributions to the Company’s development and his comprehensive experience, Dr. Ben Lipps is also honorary chairman of the Supervisory Board of FMC AG & Co. KGaA.
All members of the Supervisory Board are elected by the General Meeting of FMC AG & Co. KGaA as the competent election body according to the provisions of the German Stock Corporation Act by a simple majority of the votes cast. Fresenius SE & Co. KGaA is excluded from voting on this issue (further explanations on this matter can be found under “Further Information regarding Corporate Governance” in the section titled “Shareholders”).
When discussing its recommendations for the election of members of the Supervisory Board to the General Meeting, the Supervisory Board will take into account the international activities of the enterprise, potential conflicts of interest, what it considers to be an adequate number of independent Supervisory Board members and diversity. As the composition of the Supervisory Board needs to be aligned with the interests of the enterprise and must ensure the effective supervision and consultation of the Management Board, it is a matter of principle and of prime importance that each member is suitably qualified. In the Company’s interest not to limit the selection of qualified candidates in a general way, the Supervisory Board confines itself in compliance with its statutory obligations (section 111 para. 5 German Stock Corporation Act) to pursue self-defined targets for the representation of female Supervisory Board members (see also section “Gender diversity and definition of targets”) and refrains from an age limit for its members and from a duration limit on the term of membership of the Supervisory Board. Instead, the Supervisory Board shall also consist of members with long-term experience and thus individuals who are generally older in order to ensure a balanced ratio of Supervisory Board members of diverse age and various terms of membership. Therefore, with the exception of the determination of target figures for women’s proportion on the Supervisory Board, the Supervisory Board has refrained from determining, and from taking into account, specific objectives with respect to its composition when proposing candidates and from publishing the state of their implementation in the Corporate Governance Report.
The Supervisory Board is – in its own initiative – paying attention to the requirement to have in its entirety the knowledge, capabilities and professional expertise required for the due observation of the duties of the Supervisory Board of a listed company operating internationally in the dialysis business. Following the necessary detailed preparation, the Supervisory Board has resolved a profile of competence (skills and expertise) for the entire Supervisory Board in the first quarter of the fiscal year 2018. The profile of competence (skills and expertise) contains requirements for the individual Supervisory Board members as well as requirements for the entire Supervisory Board and is available here. The Supervisory Board will take into consideration such profile of competence (skills and expertise) when discussing its election proposals to the General Meeting.
As a consequence of the resignation of Ms. Deborah Doyle McWhinney with effect to November 1, 2018 only one of the current five Supervisory Board members is female. The share of female Supervisory Board members hence, at the end of the year under view, falls short of the target of 30% as set by the Supervisory Board for its composition. Apart from that, the current composition of the Supervisory Board meets the aims designated for the composition of the board and corresponds to the resolved profile of competence (skills and expertise). The Supervisory Board intends to propose to the Annual General Meeting in succession to Ms. Deborah Doyle McWhinney again a female member or, if such a proposal is not possible before the expiration of the relevant period, to propose to the competent court a female member for appointment as a member of the Supervisory Board of the Company. Upon a corresponding election by the Annual General Meeting, or of a court appointment in accordance with the application, respectively, again two out of six members will be female and the target of 30% female Supervisory Board members, as set by the Supervisory Board, will be surpassed again.
Simultaneous membership in both the Supervisory Board and the Management Board is not permissible. In the year under review, the Supervisory Board did not include any members who were also members of the Management Board of the General Partner during the previous two years. The members of the Company’s Supervisory Board are independent in their decisions and are not bound by requirements or instructions of third parties.
A member of the Supervisory Board is not to be considered independent pursuant to the recommendation in Code number 5.4.2 in particular if it entertains any personal or business relations with the Company, its corporate bodies, a controlling shareholder or an enterprise associated with the latter which may cause a substantial and not merely temporary conflict of interests. Taking into account the shareholder structure, the Supervisory Board has determined that it considers three independent Supervisory Board members to be an adequate number of independent members and that the Supervisory Board and its committees comprise an adequate number of independent members. Independent within the meaning of Code number 5.4.2 are, in the view of the Supervisory Board, Mr. Rolf A. Classon, Mr. William P. Johnston, Ms. Deborah Doyle McWhinney (until her resignation), Ms. Pascale Witz and Professor Dr. Gregor Zünd (since his appointment). Details on the treatment of potential conflicts of interests are set out in the section “Legal relationships with members of the Company’s corporate bodies” below.
The term of office of the members of the Supervisory Board is in principle five years. The current term of office of all members of the Supervisory Board of FMC AG & Co. KGaA ends on conclusion of the General Meeting for 2021. The term of office of Professor Dr. Gregor Zünd, who was judicially appointed by the local court of Hof as a member of the Supervisory Board, is limited until the end of the next Annual General Meeting, as requested. The Supervisory Board has resolved to propose to the Annual General Meeting 2019 to elect Professor Dr. Gregor Zünd as a member of the Supervisory Board until the end of the Annual General Meeting of the year 2021.
Details on the election, constitution and term of office of the Supervisory Board, its meetings and the adoption of resolutions, as well as its rights and obligations, are set out in the Company’s Articles of Association available here. In accordance with the recommendation in Code number 5.1.3, the Supervisory Board has furthermore adopted rules of procedure which set out, among other things, the modalities for convening meetings and the manner in which resolutions are adopted. In accordance with these, the Supervisory Board meets regularly at least twice per calendar half year. The convocation period for meetings of the Supervisory Board is generally two weeks. The deliberations of the Supervisory Board are conducted by the Chairman or, if the latter is unavailable, by the Vice Chairman. The Chairman of the meeting also determines the order of the agenda items and the mode of voting. As a rule, the Supervisory Board decides by simple majority of votes cast if decisions are taken in physical meetings and otherwise with the simple majority of its members, unless other majorities are prescribed by a mandatory provision of law in the individual case. The provisions of the rules of procedure for the Supervisory Board of the Company also apply to its committees, unless their rules of procedure contain deviating provisions. The Chairman of the Supervisory Board coordinates the work and direction of the Supervisory Board; he also represents the Supervisory Board vis-à-vis third parties.
In accordance with the recommendation in Code number 5.6, the members of the Supervisory Board regularly carry out efficiency evaluations with regard to their work. These take place in the form of open discussions in plenary meetings, based on a corresponding questionnaire. On these occasions, also the complexity and the design of the presentations, as well as the meetings’ procedure and structuring are discussed. The results of the evaluations carried out have shown that each of the Supervisory Board and its committees are efficiently organized and that the co-operation of the Supervisory Board and the Management Boards works very well.
All members of the Supervisory Board have the capabilities as well as the knowledge required for the proper exercise of their duties. The Supervisory Board members are in their entirety familiar with the sector FMC AG & Co. KGaA operates in. The members of the Supervisory Board regularly update themselves via in-house sources and via external sources about the current status of supervisory requirements. In addition to the information provided to them by several external experts, also experts of the Company’s departments regularly provide reports about relevant developments, such as – for example – relevant new developments in the revision of legal rules or in jurisprudence and also about recent developments in regulations on accounting and annual auditing. In this way, the Supervisory Board, with the Company’s reasonable assistance, ensures an ongoing qualification of its members and also a further development and updating of their expertise, power of judgment and experience, which is required for the Supervisory Board including its committees to duly perform their tasks.
Details of the key activities of the Supervisory Board’s consultations in the year under review can be found in the Report by the Supervisory Board on pages 104 et seqq. of the Annual Report.