Corporate Management Practices

Declaration of the Managing Board and Supervisory Board of HUGO BOSS AG pursuant to section 161 AktG (German Stock Corporation Act)

Listed stock corporations are required to issue a Corporate Governance Statement pursuant to section 289a of the German Commercial Codes (HGB). The Corporate Governance Statement contains:

1. the declaration of compliance,

2. information on corporate management practices as well as

3. the description of the functions of the Managing and Supervisory Boards

Information on the stated topics can be found in the following sections, with the exception of the declaration of compliance which is to be found here. Besides, you will find further information on the Supervisory Board committees.

Corporate Management Practices

As an internationally active Group, HUGO BOSS is aware of its corporate responsibility to its employees, society and the environment. Handling core business responsibly is an important prerequisite for ensuring competitiveness and long-term success. Thus, HUGO BOSS employees not only make the highest possible demands of the quality of their own products but also take account of social and ecological factors in all activities along the value chain. Corporate responsibility is divided into six areas: stakeholders, environment, employees, partners, product and society. HUGO BOSS always acts in compliance with the current regulatory frameworks as well as its internal guidelines.

Further information can be found in the Sustainability​​​​​​​ section of our corporate website.

  • Corporate Compliance

    HUGO BOSS AG and the Group companies operate in many different countries and therefore in different legal systems. For HUGO BOSS, corporate compliance is a key responsibility of the Managing Board covering measures to ensure adherence to legal and official regulations, internal guidelines and codes. This includes antitrust and anti-corruption regulations as well as provisions under capital market legislation. HUGO BOSS expects all employees to act legally in day-to-day business operations.

    The Compliance department reports directly to the Chief Executive Officer in his function as Chief Compliance Officer and supports the Managing Board in the monitoring of effective compliance management. Together with the compliance officers at the Group companies, it ensures that the compliance program is implemented and continuously updated across the entire Group. The Audit Committee is kept regularly informed of the Compliance department’s activities.

    HUGO BOSS has embodied Group-wide principles of good conduct in a Code of Conduct as well as more detailed Group policies, thus creating the basis for ensuring the legality of all employee activities. They include in particular rules on conduct in competition, the avoidance of conflicts of interest, the appropriate handling of company information, fair and respectful working conditions and anti-corruption. Employees are familiarized with the provisions of the Code of Conduct and the Group policies on an ongoing basis. To this end, HUGO BOSS runs face-to-face training sessions and has also set up a global e-learning program that all Group employees must regularly complete. HUGO BOSS does not tolerate any willful misconduct or persistent infringements of the Code of Conduct.

    Employees can obtain support and advice on issues concerning legal conduct from their line managers or the Compliance Officer. As a supplementary reporting channel, HUGO BOSS has also established a Group-wide ombudsman system. Employees, suppliers and wholesale partners can notify an ombudsman in confidence if there are any indications of fraud, infringements of antitrust law or breaches of compliance guidelines. If desired, it is also possible to do this anonymously. The ombudsman’s contact data can be found in the Sustainability section.

  • Capital market communication

    The trust of shareholders and investors is strengthened by means of open and transparent communication. HUGO BOSS reports regularly and without delay on its business situation and material changes within the Group. The investor relations activities include regular dialog with institutional investors, financial analysts and private shareholders. In addition to the annual press and analyst conference at which the consolidated financial statements and the annual report are presented, telephone conferences are held for financial analysts and institutional investors to mark the publication of the quarterly statements. The Group’s strategy and relevant developments are discussed in detail at an annual Investor Day. In addition to special information events at which the Company presents itself to private investors, the Annual Shareholders’ Meeting offers an opportunity to obtain information about the Group’s performance comprehensively and effectively, either in person or online. 

    All key information and publications can be accessed in the financial calendar, which provides an overview of the most important dates. This is always kept up to date and is also included in the annual and quarterly reports. Information on current developments and all capital market news is published in the financial releases section. Those interested can also subscribe to an electronic newsletter to receive up-to-date information about news from the Group.

Functions of Managing Board and Supervisory Board

The management structure at HUGO BOSS is primarily derived from the requirements of corporate law. As a German stock corporation, HUGO BOSS AG has a dual management and control structure. The Managing Board is responsible for the Group’s strategy and management. The Supervisory Board advises the Managing Board and monitors its management activities.

The Managing Board and Supervisory Board cooperate closely for the benefit of the Group. The common objective is to sustainably increase the enterprise value. The Managing Board regularly informs the Supervisory Board in a timely manner and in detail of issues of relevance for the Group concerning strategy, planning, business development, risk position, changes in the risk situation and compliance. Deviations from targets and budgets are explained to the Supervisory Board and its committees. The strategic alignment and further development of the Group are discussed and coordinated with the Supervisory Board.

When making decisions and in performing their duties for HUGO BOSS, members of the Managing Board and Supervisory Board are not permitted to pursue their personal interests or grant other persons unjustified advantages. No members of the Managing Board or the Supervisory Board reported any conflicts of interest in fiscal year 2017. The offices held by the Managing Board and Supervisory Board members in statutory supervisory boards or comparable oversight committees of commercial organizations in Germany and other countries are listed in the notes to the consolidated financial statements on page 207. No member of the Managing Board sits on more than three supervisory boards of listed companies that are not members of the Group. The same applies to members of the Supervisory Board who sit on the managing boards of other listed companies. 

  • Managing Board

    The Managing Board of HUGO BOSS AG comprises the Chief Executive Officer and the members with equal rights, whose duties cover specific corporate functions. It had four members at the end of 2017.

    The HUGO  BOSS Group is managed by the Managing Board of the parent company HUGO  BOSS  AG, in which all of the Group management functions are bundled. The Managing Board’s core duties include corporate strategy, corporate finance, risk management, decisions on the collections and the management of the sales network. In addition, it is responsible for preparing the annual, consolidated and interim financial statements and for establishing and monitoring the risk management system.

    The bylaws of the Managing Board govern the allocation of duties to its members as well as the procedures to be adopted for passing resolutions. In particular, they also define disclosure and reporting duties as well as those matters requiring the approval of the Supervisory Board. 

    The German Corporate Governance Code stipulates that the Managing Board must consider diversity when filling management positions in the Group and specifically that women must be adequately represented. The Managing Board is committed to this objective. It already monitors the diversity of the workforce and will continue to do so in future. The Managing Board set a target gender quota of at least 30% women in each of the two management levels below the Managing Board to be achieved by June 30, 2017. At that time, the target was slightly missed with a share of women of 28% at the first management level. This was due to a higher share of men among new hires than originally planned. Decisive for this development was solely the qualification of the respective applicants. The target at the second management level was clearly exceeded with a share of women of 45%. The Managing Board has now set a target gender quota of at least 30% women in each of the two management levels below the Managing Board to be achieved by December 31, 2021. Indeed, the company strives to keep the share of women on these two levels at least stable, but it also feels obligated to the principle to hire only those applicants with the most suitable qualification even if this results in a lower share of women.

  • Supervisory Board

    In accordance with the German Corporate Governance Code, HUGO  BOSS attaches key importance to the independence of the members of the Supervisory Board. The members of the Supervisory Board of HUGO  BOSS have the knowledge, skills, and professional experience necessary for the respective committees. The Supervisory Board currently includes three women. Until Ms. Lersmacher resigned as an employee representative with effect from July 31, 2016, the gender quota pursuant to Sec. 96 (2) AktG had been fulfilled in overall terms, with a total of four women (including three employee representatives). In a resolution dated July 25, 2016, the employee representatives rejected aggregate fulfillment of this requirement, meaning that the 30% gender quota requirement must now be met separately by the shareholder representatives and the employee representatives. The two female employee representatives fulfill the gender quota on the employee representatives’ side. As a result of the aforementioned decision, the gender quota for the shareholder representatives is no longer fulfilled, as only one woman has been elected. It must be ensured that the gender quota is fulfilled on the shareholder representatives’ side at the next election. In accordance with No. 5.4.1 Sentence 9 of the German Corporate Governance Code, the following shareholder representatives sitting on the Supervisory Board are considered to be independent: Ms. Kirsten Kistermann-Christophe, Mr. Michel Perraudin, Mr. Axel Salzmann and Mr. Hermann Waldemer.

    None of the current members of the Supervisory Board have previously held a Managing Board position within the Group. There were also no advisory or other service agreements in place between members of the Supervisory Board and the Group in the reporting year.

    On September 23, 2015, the Supervisory Board acting under Sec. 111 (5) AktG defined a target for the proportion of women on the Managing Board, which was to be achieved by June 30, 2017. This target has not been reached. With the appointment of Mr. Hake, succession planning for the Managing Board responsibility for distribution was implemented. The prerequisite for the appointment to the position of Chief Brand Officer was longstanding experience in creative and menswear areas. This resulted in a limited selection of candidates, with Mr. Wilts proving to be the ideal candidate on account of his experience. Several candidates were considered in the selection process for the appointment of the Chief Financial Officer, which the Supervisory Board undertook following preparations by the Personnel Committee in 2017. However, the newly appointed Managing Board member was ultimately selected on account of his professional qualifications. The Supervisory Board is still pursuing the target of having at least one woman sitting on the Managing Board of the Company. This should be achieved by no later than December 31, 2021. 

  • Diversity Concept of the Supervisory Board

    In accordance with the recommendation in No. 5.4.1 Sentence 8 of the German Corporate Governance Code, the Supervisory Board adopted a profile of required skills and defined specific goals for its own composition at its meeting on December  7, 2017. Thus, at least two members of the Supervisory Board should have an international background. At the same time, no member may be exposed to any conflicts of interest. Furthermore, no member of the Supervisory Board should be older than 69 years on the date on which he or she is elected. In addition, the Supervisory Board has defined a specific target as regards the number of “independent” members of the Supervisory Board as defined in the German Corporate Governance Code. Accordingly, of the twelve members of the Supervisory Board, at least eight members, including the six employee representatives, should be independent. The Supervisory Board has not defined any maximum period of office for its members. HUGO BOSS believes that a predefined maximum period of office is not appropriate as it is keen to benefit from the experience of the long-standing members of the Supervisory Board. 

     

    The following further rules pertaining to the composition of the Supervisory Board were also adopted and simultaneously seek to implement a concept for increasing diversity (diversity concept):

    • The Supervisory Board should have at least two members with an international background (i.e. persons who possess experience gained outside Germany due to current or past activities and/or hold non-German citizenship).
    • The Supervisory Board should have at least one member holding expertise in branding, supply chain and/or national or international sales matters.
    • The Supervisory Board should have at least two members who are currently or formerly executives of another company.
    • The Supervisory Board should have at least four members possessing extensive knowledge and experience of the Company itself.
    • Aside from the employee representatives, the Supervisory Board should have at least three members who are independent and two who have expertise in the areas of accounting or auditing.

    The Supervisory Board has adopted bylaws which among other things govern its duties and responsibilities as well as the procedures for convening, preparing and chairing meetings and for passing resolutions. In addition, the bylaws stipulate equal representation in the composition of all Committees.

Supervisory Board Committees

The Supervisory Board has formed five committees, which perform to the extent legally permissible, statute and/or bylaw. The tasks assigned to them in the name of and on behalf of the entire Supervisory Board:

  1. Audit Committee,
  2. Personnel Committee,
  3. Working Committee,
  4. Nomination Committee and
  5. Mediation Committee

To the extent permitted by law, the Supervisory Board’s decision-making authority was transferred to the Committees. The committees addressed in-depth the respective issues assigned to them and the chairs of the committees always reported in detail to the Supervisory Board on the meetings and their results.

  • Audit Committee

    The Audit Committee is composed of at least four members who are elected by the Supervisory Board. The total number of members of the Audit Committee is determined by the Supervisory Board and must always be even. In accordance with the German Corporate Governance Code, the Committee must have at least one independent member. The Audit Committee is responsible for monitoring the financial reporting process, the effectiveness of the systems of internal control, risk management and internal auditing, and the audit of the annual financial statements. It has the following main duties:

    • To perform a preliminary audit of the annual financial statements and the consolidated financial statements, the combined management report of HUGO BOSS AG and the Group and the profit appropriation proposal, to discuss the audit report with the external auditor and to prepare the Supervisory Board’s decision on the approval of the annual financial statements and the consolidated financial statements;
    • To examine the quarterly reports (interim reports and quarterly statements) and discuss them with the Managing Board;
    • To prepare the Supervisory Board’s proposal to the Annual Shareholders’ Meeting concerning the appointment of an external auditor and, in particular, to satisfy itself of the external auditor’s independence and to examine the additional services which are provided;
    • To engage the external auditor and to sign the corresponding fee agreement for the audit of the annual financial statements and the consolidated financial statements following consultation with the Managing Board on the basis of the resolution passed at the Annual Shareholders’ Meeting, including the determination of the key audit points and the auditor’s reporting duties towards the Supervisory Board;
    • To satisfy itself that the statutory provisions and internal company policies have been complied with (“compliance”).

    The Supervisory Board satisfied itself of the independence of the members of the Audit Committee representing the shareholders and of the Chairman of the Audit Committee, Hermann Waldemer. 

    The Audit Committee met five times in 2017. The main agenda of its meetings concerned the financial reporting of the Company and the Group with respect to the annual, half-yearly and quarterly financial statements and reports, the audit of the annual and consolidated financial statements, monitoring of the risk management and internal control system, compliance matters and risk management. In addition, the Audit Committee requested the declaration of independence from the external auditor and satisfied itself of the auditor’s independence. In addition to defining the main aspects of the audit of the annual and consolidated financial statements for 2017 and mandating the external auditor, it approved non-auditing services and placed a cap on the fees payable for such non-auditing services. In addition, the results of the internal preliminary audit of the non-financial report were discussed in accordance with the Act to Strengthen Non-Financial Reporting by Companies in the Management and Group Management Reports (CSR Directive Implementation Act).

    Members of the Audit Committee (since May 2015):

    • Hermann Waldemer (Chairman)
    • Fridolin Klumpp
    • Michel Perraudin
    • Antonio Simina
  • Personnel Committee

    The Personnel Committee is made up of the Chairman of the Supervisory Board and three other members elected by the Supervisory Board from its own number. Its composition ensures equal representation. It makes decisions on the service contracts of the Managing Board members and other contractual matters (including those relating to former Managing Board members and their surviving dependents) not related to the compensation of Managing Board members. Decisions concerning the compensation of Managing Board members (including former Managing Board members and their surviving dependents) as well as regular deliberation on and the review of the compensation system are the responsibility of the full Supervisory Board. However, the Personnel Committee submits proposals in preparation of decisions on these matters. In addition, the Personnel Committee makes decisions in accordance with Sec. 114 AktG (contracts with Supervisory Board members) and Sec. 115 AktG (loans to Supervisory Board members) as well as matters requiring the Supervisory Board’s consent in connection with senior executives (including the granting of loans to senior executives within the meaning of Sec. 89 (2) AktG). To the extent permitted by law, it represents the Company in transactions with Managing Board members (including former Managing Board members and their surviving dependents).

    The Personnel Committee held seven meetings at which it focused on the changes to the Managing Board. In addition, the Personnel Committee handled the preparations for the target agreements on behalf of the Managing Board and reviewed the achievement of the targets. 

    Members of the Personnel Committee (since May 2015):

    • Michel Perraudin (Chairman)
    • Luca Marzotto
    • Sinan Piskin
    • Antonio Simina
  • Working Committee

    The Working Committee comprises the Chairman of the Supervisory Board and five other members whom the Supervisory Board elects from its own number. They assist and advise the Chairman of the Supervisory Board. In accordance with the statutory provisions, the Working Committee works closely with the Managing Board to prepare the meetings of the Supervisory Board. In particular, the Working Committee performs the monitoring duties between the meetings of the Supervisory Board. This does not prejudice the monitoring duties of the individual members of the Supervisory Board. The Working Committee makes decisions on transactions requiring consent in cases where the Supervisory Board has delegated its powers accordingly. To the extent permitted by law, the Working Committee may make decisions on urgent matters in lieu of the full Supervisory Board. In such cases, it must immediately notify the Supervisory Board in writing and report orally in detail at the next Supervisory Board meeting on the decision, the reasons for it and the need for the decision by the Working Committee.

    The Working Committee met five times in the year under review and dealt with the remuneration of the Supervisory Board, the strategy, preparations for the Annual General Meeting and the establishment of subsidiaries in Estonia and Latvia. In addition, it deliberated on the performance of online business, personnel matters, the renewal of the license agreement for watches as well as the corporate governance statement and the diversity policy

    Members of the Working Committee (since May 2015):

    • Michel Perraudin (Chairman)
    • Anita Kessel
    • Luca Marzotto
    • Sinan Piskin
    • Antonio Simina
    • Hermann Waldemer
  • Nomination Committee

    The Nomination Committee has two members who are elected by the representatives of the shareholders on the Supervisory Board from their own number; accordingly, it is made up solely of shareholder representatives in accordance with the requirements set out in Sec. 5.3.3 of the GCGC. It is required to identify suitable candidates for the election of shareholder representatives to the Supervisory Board and to put their names forward to the Supervisory Board as its proposed nominees for election at the Annual Shareholders’ Meeting. 

    It was not necessary for the Nomination Committee to be convened in the year under review.

    Members of the Nomination Committee (since May 2015):

    • Gaetano Marzotto
    • Michel Perraudin
  • Mediation Committee

    The Mediation Committee comprises the Chairman of the Supervisory Board, the Deputy Chairman of the Supervisory Board, one member elected by the employee representatives on the Supervisory Board and one elected by the shareholder representatives on the Supervisory Board, with a majority of the votes cast in both cases. Its sole purpose is to perform the duties referred to in Sec. 27 (3) and Sec. 31 (3) Sentence 1 Mitbestimmungsgesetz [Co-Determination Act]. Accordingly, the Mediation Committee submits proposals for the appointment of members of the Managing Board in cases in which a prior proposal has failed to achieve the necessary statutory majority.

    The Mediation Committeeset up in accordance with Sec. 27 (3) MitbestG [“Mitbestimmungsgesetz”: German Co-determination Act] did not meet in the past fiscal year. 

    Members of the Mediation Committee (since May 2015):

    • Michel Perraudin (Chairman)
    • Tanja Silvana Grzesch 
    • Gaetano Marzotto
    • Antonio Simina

Further information

Declaration of Compliance

The Managing Board and Supervisory Board dealt with the fulfillment of the specifications of the German Corporate Governance Code (DCGK) at length in fiscal year 2017, and have provided a Declaration of Compliance as the result.

Strategy

Consistent proximity to the customer—this goal is at the heart of the corporate strategy. To be able to offer our customers the best service, HUGO BOSS is global, digital, agile and sustainable. These qualities result in the fields of action where we are further developing.

Compensation

Here, you can find information about the compensation of the Managing Board and Supervisory Board as published in the Annual Report of the prior fiscal year.

Risk Management

HUGO BOSS views the responsible handling of risks as an important part of good corporate governance. This enables risks to be detected and assessed at an early stage and risk positions to be controlled through corresponding measures.

Tax Strategy

HUGO BOSS management knows that paying taxes plays an important role in the global economic and social relationships of the company. In addition to compliance with tax regulations, adequate risk management is also obligatory.

Articles of Association & Bylaws

Here, you can download the Articles of Association and the Bylaws of the Managing and Supervisory Boards of HUGO BOSS AG as PDF files.