Report of the Supervisory Board
Lutz Feldmann
- Born 1957
- Chairman of the Supervisory Board since May 2016
The Supervisory Board dutifully and comprehensively performed all of the tasks incumbent on it in the 2022 financial year as required by law and the Articles of Association. It regularly advised the Board of Management on its management of the company and continuously accompanied and monitored all important management measures for the Group. The supervisory and advisory activities of the Supervisory Board also dealt with issues related to sustainability, in particular. The Supervisory Board was involved in all decisions of fundamental importance to the company and the Group.
The Board of Management regularly, comprehensively and promptly informed the Supervisory Board about all relevant aspects of intended business policies and other fundamental issues relating to business planning, and also provided reasons for any discrepancies between the actual development of business and the plans and targets reported at an earlier date. In the reporting period, this particularly included discussions on questions relating to the war between Russia and Ukraine and its impact on the business of EnBW and its subsidiaries, as well as discussions on questions relating to the coronavirus pandemic and its impact on the company. In addition, the Board of Management informed the Supervisory Board about the economic position of the company and the Group including, among other things, the profitability of the company (especially the equity), the development of business (especially the revenue and earnings, the net assets, financial position and results of operations, as well as HR development at the company) and those business transactions that could be of significant importance for the profitability or liquidity of the company. Furthermore, the Board of Management informed the Supervisory Board about the risk situation of the Group and of individual areas of the Group, corporate strategy and planning, risk management, the internal control system and compliance.
Key topics of the discussions at the plenary meetings of the Supervisory Board
In the 2022 financial year, the Supervisory Board dealt extensively with verbal and written reports and proposals for resolutions issued by the Board of Management at seven ordinary meetings on 17 February, 22 March, 11 May, 14 July, 29 September, 9 November and 8 December 2022, and four extraordinary meetings on 7 April, 30 May, 29 July and 15 September 2022. An urgent decision was also taken on three occasions: 18 March, 3 April and 10 June 2022. Furthermore, the Supervisory Board requested reports and information from the Board of Management on individual topics, which were comprehensively provided in a timely manner in each case. The discussions and resolutions at the plenary meetings of the Supervisory Board focused on the following key issues:
- In-depth consultations and discussions with the Board of Management about the latest developments in the war between Russia and Ukraine and its impact
- In-depth consultations and discussions with the Board of Management about the coronavirus crisis management system and the latest developments with respect to the coronavirus pandemic and its possible impact on the companies in the EnBW Group
- Determining the level of the short-term single-year variable remuneration for members of the Board of Management for 2021 and the long-term multi-year variable remuneration for members of the Board of Management for 2019 (performance period 2019 to 2021)
- Selection of the sustainability criteria for the performance period 2023 to 2025 and defining the targets for the variable remuneration for members of the Board of Management for 2023
- Consultation on the annual compliance and data protection report and the agenda for the subsequent period
- Approval of the proposals to be made at the ordinary Annual General Meeting 2022, including in particular on the appropriation of retained earnings for the 2021 financial year, the discharge of Board of Management and Supervisory Board members, the election of the auditor for the 2022 financial year, the (by-)election of a member of the Supervisory Board, approval of the Board of Management remuneration system and the remuneration report for the members of the Board of Management and the amendment to article 16 of the Articles of Association
- Approval of the decision taken by the Board of Management to hold the ordinary Annual General
- Meeting 2023 as a virtual Annual General Meeting without any physical presence of shareholders and their proxies
- Approval of the remuneration report for 2021 that was produced and checked in cooperation with the Board of Management in accordance with section 162 AktG
- Endorsement of the annual financial statements and consolidated financial statements as of 31 December 2021 presented by the Board of Management
- Replacement and reassignment of members on the committees of the Supervisory Board due to changes in the members of the Supervisory Board
- Appointment of Andreas Schell as a member and Chairman of the Board of Management (term of office beginning on 15 November 2022)
- Approval for a change to the allocation of responsibilities on the Board of Management
- In-depth consultations and discussions with the Board of Management about long-term strategic planning (with a focus on the energy industry, market, trading, gas, expansion of renewable energies, sustainability and climate change mitigation) and consultation on portfolio discussions of selected business fields of EnBW
- Approval for the collaborative projects for the quick charging of electric vehicles in Germany
- Regular reporting by the Board of Management on the development of market prices for electricity, fuels and CO₂
- Regular consultation on the development of the markets relevant to EnBW
- Consultation on the further development and definition of EnBW’s climate change mitigation goals
- Consultation on the self-assessment of the Supervisory Board
- Consultation on the impact of the 2022 reform of the German Corporate Governance Code
- Regular reporting by the Board of Management on the development of business activities in Turkey
- Consultation on post completion audits for acquired companies
- Regular consultation on the development of the financial ratings of EnBW AG
- Regular reporting by the Board of Management on the operation, safety and, where relevant, dismantling of the nuclear power plants
- Approval for covering the financing needs of TransnetBW GmbH
- Approval for covering the financing needs of Stadtwerke Düsseldorf AG
- Approval of financing measures for VNG AG
- Approval of the implementation of a settlement in a court proceeding
- Consultation on the yield forecasts for offshore/onshore wind
- Consultation on the results of the EnBW Employee Survey 2021
- Approval for the conclusion of a loan agreement and the extension of a guarantee facility agreement
- Approval for the conclusion of natural gas procurement contracts
- Approval for the submission of a binding bid for LNG regasification capacities
- Approval of investment decisions for the realization of various fuel switch projects
- Regular consultation on the market environment in the energy industry
- Approval of bids for an invitation to tender for grid services
- Consultation on the post-contractual non-competition agreement with members of the Board of Management
- Approval of the financing strategy for 2023
- Approval of the extension to the market operation of a hard coal unit
- Approval for the conclusion of new LNG procurement contracts and the extension of existing ones
- Approval for the conclusion of gas procurement and sales contracts
- Approval for the conclusion of multiple electricity supply contracts
- Approval for the issuing of an interim and the annual declaration of compliance and (Group) declaration of corporate management, the latter including for the first time a qualification matrix on the fulfillment of the defined competency profile for the members of the Supervisory Board
- Approval of the budget for the 2023 financial year and acknowledgment of the medium-term planning for the period 2023 to 2025 consisting of the plans for Group earnings, finance, investment and HR, as well as for the result (HGB) and liquidity of EnBW AG. The corporate planning incorporates both financial and sustainability targets
- Completion of a selection process according to EU Regulation 537/2014 and adopting a resolution on the future auditor for the financial years from 2024 to 2028, subject to election each year by the Annual General Meeting
Aside from the meetings, the Board of Management informed the Supervisory Board in writing about all business transactions of particular importance for the company or the Group. In addition, there was ongoing communication between the Chairman of the Supervisory Board and the Board of Management, particularly with the Chairman of the Board of Management, in order to discuss issues relating to strategy, planning, business development, the risk situation, risk management, compliance, the impact of the war between Russia and Ukraine, the impact of the coronavirus pandemic, important individual transactions and currently pending decisions.
There was a consistently very high attendance rate at the individual meetings of the Supervisory Board. The majority of the members of the Supervisory Board attended all meetings of the Supervisory Board. No member of the Supervisory Board participated in less than half of the meetings.
Work of the committees
The committees set up by the Supervisory Board once again met regularly in the 2022 financial year, so that the Supervisory Board could perform its functions efficiently. In order for the Supervisory Board to optimally perform its functions, it formed a special committee at its meeting on 29 September 2022 with immediate effect that will serve until the end of the day of the Annual General Meeting of EnBW Energie Baden-Württemberg AG on 3 May 2023. This special committee is responsible, in particular, for examining the impact of the war between Russia and Ukraine on the business of EnBW and its subsidiaries. The respective members of the committees are listed on p. 299 of the Integrated Annual Report 2022. The Chairpersons of the committees regularly reported in detail on the work of the committees at each subsequent plenary meeting of the Supervisory Board.
Corporate Governance
The Supervisory Board also paid close attention to the various issues relating to corporate governance in the 2022 financial year and discussed the declaration of compliance in accordance with section 161 AktG. These topics are explained in detail in the declaration of corporate management (p. 164 ff.). The company also published the declaration of corporate management in accordance with section 289f (1) sentence 2 and section 315d sentence 2 HGB on its website.
Audit of the annual and consolidated financial statements
Following a thorough examination by the audit committee, the Supervisory Board undertook a detailed review of the annual financial statements and consolidated financial statements as of 31 December 2022 that were audited and issued with an unqualified audit opinion by Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, and of the combined management report including the non-financial declaration for the 2022 financial year. The final results of its own reviews did not lead to any reservations on behalf of the Supervisory Board. It approved the audit results of the independent auditor and endorsed the annual financial statements prepared by the Board of Management as of 31 December 2022 – which have thus been ratified – and the consolidated financial statements as of 31 December 2022, as well as the combined management report including the non-financial declaration for the 2022 financial year.
Reference to the complete version of the Report of the Supervisory Board
Further details on the topics “Work of the committees,” “Corporate governance,” “Audit of the annual and consolidated financial statements” and “Personnel changes at the level of the Supervisory Board and Board of Management” can be found in the full version of the Report of the Supervisory Board made available to the public on the company’s website.
Karlsruhe, 22 March 2023
The Supervisory Board
Chairman