7.1.1. Declaration of conformity
Assuming responsibility
MTU has always demonstrated a sense of responsibility in everything it does. The company assumes responsibility for the environment and society in the same way as it does in respect of its products, processes, employees, customers and partners. MTU is committed to sustainable development and has a long tradition of going above and beyond minimum legal requirements. The main areas in which this commitment is applied are environmental protection, human resources policy and community outreach projects in the neighborhood of MTU sites. The company’s commitments are described on the MTU website at www.mtu.de under The company -> Sustainability, where descriptive documents are also available to the public. Reference is also made to Section 1.5. (Corporate responsibility).
Code of conduct
MTU strives for an open and constant dialog with many different target groups – among them sharehol- ders, employees and unions, customers and suppliers, local residents, environmental interest groups and the media. The company communicates via the internet and intranet, brochures, flyers and employee and customer magazines. It also communicates directly with its target groups at events such as trade shows, exhibitions, open days and discussion forums. In so doing, MTU aims to generate broad public acceptance. A document describing MTU’s code of conduct can be downloaded from the company’s website at www.mtu.de under The company -> Sustainability -> Employees.
Quality spells safety
In aviation, where the smallest of mistakes may have catastrophic consequences, safety is a prime concern. MTU insists on the finest quality for its products and services. Quality spells safety, and safety is the first priority in the work of every MTU employee.
MTU strictly monitors compliance with its high quality standards at all times and across all levels of production and personnel. Its management system ensures the company observes all applicable legal and statutory regulations and clearly defines roles and responsibilities in the company. This enables MTU to promise its customers the same level of quality at any of the company’s locations worldwide. Compliance with quality requirements is verified by government agencies and through internal and external audits. Information on quality approvals and certifications is available on the MTU website at www.mtu.de under The company -> Quality.
The organization of the Board of Management and its members’ areas of responsibility are described in Section 1.2. (Group structure, locations and organization).
The Board of Management sets MTU‘s strategic direction, plans and establishes the company‘s budget, and monitors the individual business units. Its members are responsible for ensuring that an appropriate risk management and control system is in place. As a component of value-oriented corporate manage- ment, systematic risk management ensures that risks are identified at an early stage, analyzed and assessed, and that suitable measures are taken to minimize risk exposure. The Board of Management informs the Supervisory Board, in a timely manner and on a regular basis, of the company’s current situation, existing risks and their development and related risk management activities, strategic de- cisions and their implementation. The Supervisory Board receives monthly written reports on the com- pany’s earnings, financial situation, and net asset position. Any deviations from the planned operational 7.1.2. Management
practices extending beyond statutory requirements
7.1.3. Description of the work performed by the Board of Management and the Supervisory Board
[ ] MTU insists on the finest
quality for its products and services
Important Board of Management decisions require the approval of the Supervisory Board, in particular concerning the budget. For further information on this topic, please refer to the Supervisory Board report on page 316.
The Board of Management’s rules of procedure listing the transactions by MTU Aero Engines Holding AG, Munich, requiring Supervisory Board approval can be viewed on the website at www.mtu.de under Investor Relations -> Corporate Governance.
In line with statutory requirements, the Supervisory Board comprises six shareholder representatives – in addition to the chairman, Klaus Eberhardt, these are currently Professor Wilhelm Bender, Dr. Jürgen M. Geißinger, Dr. Joachim Rauhut, Udo Stark and Professor Klaus Steffens - and six employee representati- ves – in addition to the deputy chairman, Josef Hillreiner, these are currently Babette Fröhlich, Michael Behé, Thomas Dautl, Rudolf Domberger and Michael Leppek.
The Supervisory Board regularly advises the Board of Management on the running of the company, oversees its work, and continually follows business developments and the situation of MTU. The Supervisory Board is informed and consulted in a direct and timely manner regarding all decisions of consequence for the company.
The Supervisory Board has formed four committees, three of which equally represent the workforce and the management of the company (the Audit Committee, the Personnel Committee and the Mediation Committee – the latter formed to comply with Section 27, paragraph 3 of the German Co-Determination Act). The fourth is the Nomination Committee, which has the task of proposing candidates for election as shareholder representatives. Its two members are also shareholder representatives, currently Klaus Eberhardt and Dr. Jürgen M. Geißinger. The Personnel Committee consists of Klaus Eberhardt, Dr. Jürgen M. Geißinger and the two workforce representatives Josef Hillreiner and Michael Leppek. The members of the Audit Committee are Dr. Joachim Rauhut, Klaus Eberhardt, Babette Fröhlich and Josef Hillreiner. The members of the Mediation Committee are identical with those of the Personnel Committee. The Audit Committee monitors the financial reporting process, the efficacy of the company’s risk management system, its system of internal controls, and its internal auditing system, and also monitors the external auditor’s independence. Moreover, the Supervisory Board oversees the Board of
Management’s compliance activities with the assistance of the Audit Committee.
The Personnel Committee prepares the ground for personnel decisions by the Supervisory Board, in particular the appointment and dismissal of members of the Board of Management and the nomination of its chairman, the company’s CEO. It also takes decisions relating to the conclusion, amendment and termination of employment contracts and pension agreements with members of the Board of Manage- ment. This does not affect the right of the plenary meeting to define amounts of compensation. The Personnel Committee moreover represents the company in dealings with members of the Board of Management, approves transactions between the company and individual members of the Board of Management as well as certain extramural activities by members of the Board of Management, and performs the Supervisory Board’s efficiency audit.
7.2. Reference to