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Infineon Technologies : Statement on Corporate Governance pursuant to sections 289f, 315d of the German Commercial Code (HGB)/Corporate Governance Report

11/29/2021 | 07:31am EST

Infineon Technologies AG


Statement on Corporate Governance/Corporate Governance Report for the 2021 fiscal year

Statement on Corporate Governance pursuant to sections 289f, 315d of the German Commercial Code (HGB)/Corporate Governance Report

Declaration of Compliance with the German Corporate Governance Code issued for the 2021 fiscal year by the Management Board and Supervisory Board of Infineon Technologies AG pursuant to section 161 of the German Stock Corporation Act (AktG)

Declaration of Compliance pursuant to section 161 AktG

In November 2021, the Management Board and Supervisory Board issued the following declaration pursuant to section 161 AktG:

Since submitting its most recent Declaration of Compliance in November 2020, Infineon Technologies AG has complied with all recommendations set out in the German Corporate Governance Code in the version dated 16 December 2019 and will continue to do so in the future.

Suggestions contained in the German Corporate Governance Code

The Company complies with all legal requirements and all recommendations of the German Corporate Governance Code (Deutscher Corporate Governance Kodex - "DCGK"). Moreover, it complies voluntarily with the non-mandatory suggestions contained in the DCGK, with the exception of Suggestions A.5, D.8 and G.14.

According to Suggestion A.5, in the event of a takeover offer, the Management Board should convene an extraordinary general meeting to give shareholders the opportunity to discuss the offer and, if necessary, decide on corporate action. Calling a general meeting of the shareholders constitutes a major organizational challenge for a listed public company - even taking into account the shorter time limits stipulated by law in a takeover situation. It is questionable as to whether the related effort can be justified if there is no intention to pass relevant resolutions at the meeting. An extraordinary general meeting should therefore only be convened in indicated cases.

According to Suggestion D.8, participation at Supervisory Board meetings by telephone or video conference calls should not be the rule. However, in light of the coronavirus pandemic and the accompanying restrictions, meetings have temporarily had to be held exclusively on a virtual basis.

According to Suggestion G.14, commitments to benefits in the case of early termination of a Management Board member's service contract due to a change of control should not be agreed upon. However, the service contracts with Infineon Management Board members contain change-of-control clauses in line with standard market practice.

Relevant disclosures in respect of corporate governance practices

Fundamentals of the Company's governing constitution

Infineon Technologies AG has its registered office in Neubiberg, Germany, and is entered in the Commercial Register of the Munich Local Court under HRB 126492. As a stock corporation under German law, the Company has three corporate bodies - the Annual General Meeting, the Management Board and the Supervisory Board. The duties of these bodies derive primarily from the German Stock Corporation Act (AktG) and from the Companyʼs Articles of Association which are available on the Infineon website. The object of the Company is stated as direct or indirect work in the fields of research, development, production and sale of electronic components, electronic systems and software, as well as the performance of all related services.

Shareholders take their decisions at the Annual General Meeting, which is held at least once a year. Each share carries one vote. Shareholders can attend the Annual General Meeting if they are entered in the share register and have duly registered for the meeting. The Annual General Meeting decides on issues assigned to it by law, most notably the appropriation of profit, the approval of the acts of the Management Board and the Supervisory Board, the election of the auditor, corporate contracts,

Infineon Technologies AG

Statement on Corporate Governance/Corporate Governance Report for the 2021 fiscal year

and amendments to the Articles of Association. Shareholders are entitled to put forward proposals and also have a comprehensive right to speak and raise questions at the Annual General Meeting. Furthermore, subject to certain conditions, they also have the right to challenge resolutions of the Annual General Meeting, to request an extraordinary judicial review and to claim damages from corporate bodies of the Company on behalf of the Company. The Company supports the shareholders in the exercising of their rights at the Annual General Meeting. Shareholders can register for the Annual General Meeting electronically, participate in voting by means of postal voting or by sending online instructions (e.g., to company proxies) and follow the general debate online. All documents and information relating to the Annual General Meeting are available on the Infineon website. The Infineon Investor Relations department can be contacted throughout the year, both by telephone and electronically, to ensure the exchange of information between the Company and its shareholders.

Based on the "Act Concerning Measures Under the Law of Companies, Cooperative Societies, Associations, Foundations and Commonhold Property to Combat the Effects of the COVID-19-pandemic" and the relevant regulation on the extension of these measures, the Company held its Annual General Meeting in February 2021 as a virtual event, primarily in order to avoid health risks for shareholders, employees, external service providers and the members of the Company's corporate bodies. The virtual format resulted in modifications in the conduct of the meeting and the exercise of shareholdersʼ rights. In particular, the physical participation of shareholders or their proxies was not possible. However, shareholders had the opportunity to follow the entire Annual General Meeting online. Prior to the meeting, it was possible to post video messages for publication and submit questions electronically to be answered during the Annual General Meeting. Shareholders or their proxies were only able to exercise their voting rights by means of postal voting or by issuing powers of attorney and instructions to company proxies.


The German Stock Corporation Act envisages a two-tier administrative system, namely the Management Board being responsible for managing the Company and its control by the Supervisory Board. The Management Board is fully responsible for managing the Company. Within this framework, it is both monitored and advised by the Super­ visory Board. The Supervisory Board appoints the Management Board members and can, at any time, revoke an appointment for good cause. The Management Board keeps the Supervisory Board informed on a regular, timely and comprehensive basis. For specified measures, the Management Board requires the approval of the Super­ visory Board.

Standards for good and responsible corporate governance

The Management Board and Supervisory Board of Infineon Technologies AG are of the opinion that the responsible, transparent and value-oriented management of an enterprise requires a comprehensive corporate governance concept. Good corporate governance contributes towards increasing the value of the business on a sustainable basis, while at the same time fostering trust in our entity among national and international investors, the financial markets, business partners, employees and the public. The Management Board, the Supervisory Board and other levels of management ensure that corporate governance is actively practiced and continuously developed throughout the entity. At Infineon, corporate governance encompasses not only the DCGK, but also the standards underlying Infineon's internal control system as well as compliance (particularly Infineon's Business Conduct Guidelines) and its Corporate Governance Principles. The Business Conduct Guidelines and Corporate Governance Principles are available to all employees on the Infineon intranet and can be down- loaded.

In addition, we consider it to be good corporate governance practice for the Company not to grant loans to Management Board or Supervisory Board members.

Infineon Technologies AG

Statement on Corporate Governance/Corporate Governance Report for the 2021 fiscal year

Business Conduct Guidelines

We conduct our business responsibly and in compliance with legal requirements and administrative regulations and have established various guidelines that contribute towards achieving this objective. As one of the key elements of our corporate governance system, the Infineon Technologies AG "Business Conduct Guidelines" are

published online at www.infineon.com/cms/en/about-infineon/investor/corporate-governance/compliance/business-conduct-guidelines/and are mandatory for the Management Board and all employees worldwide. In particular, they include regulations on compliance with the law, interaction with business partners and third parties, the avoidance of conflicts of interest, the use of Company assets, data and information, environmental protection, and health and safety topics. Also included are regulations relating to the handling of complaints and communication relating to violations of the Business Conduct Guidelines and other rules mandatory for Infineon. In order to convey the principles of the Business Conduct Guidelines, all members of the Management Board, as well as all employees, are required to participate in an online training program on a regular basis.

Corporate Compliance Officer and Compliance Panel

Infineon maintains an independent Compliance Office, which underlines Infineon's clear commitment to absolute compliance with the law and to maintaining ethical standards which protect the legitimate interests of employees, suppliers, customers and shareholders and safeguard Infineonʼs reputation while nevertheless taking account of its needs. In addition to meeting the traditional compliance objectives, such as risk mitigation and increases in efficiency and effectiveness, compliance

is promoted with a view to strengthening Infineonʼs image as a reliable and fair business partner and thus contributing to its overall success.

Infineon Technologies AGʼs Corporate Compliance Officer reports directly to the Chief Financial Officer (CFO). The Corporate Compliance Officer coordinates the Compliance Management System; develops the Infineon compliance program based on a risk- oriented approach; draws up and revises guidelines; advises employees; receives complaints and tip-offs, including those made anonymously; and leads investigations aimed at clarifying compliance-related cases. In addition, the Corporate Compliance Officer carries out regular mandatory compliance training measures for employees


on a range of topics, in particular anti-trust law and the prevention of corruption. Extensive training measures were again carried out during the 2021 fiscal year.

The Corporate Compliance Officer is supported by regional Compliance Officers. The Company has also established a Compliance Panel that meets on a regular basis and is composed of experienced managers from the Legal, Human Resources, Internal Audit and Security departments as well as the Corporate Compliance Officer. The ­primary task of the panel is to deliberate on the current status of compliance throughout the Company and to discuss key issues relevant for the continuous improvement of the compliance system. A whistleblowing system has been established as an important component of the compliance system. Infineon employees can contact the Integrity Line and/or the Corporate Compliance Officer on a confidential basis (anonymously if desired) to report any non-compliance with internal guidelines and applicable laws. The Corporate Compliance Office follows up every item of infor­ mation communicated and, in collaboration with the Compliance Panel, decides whether to initiate an internal investigation.

The sustainability of the Compliance Management System in place at Group companies is ensured by means of regular internal audits.

Risk management

The Management Board sees the systematic and effective management of risks and opportunities as an important part of good corporate governance and a key success factor for our business. The system in place ensures that risks and opportunities are detected at an early stage and risk exposures are minimized. The transparency of the Groupʼs risk profile contributes to the systematic and continuous growth in the value of the Company. The effectiveness of the Risk and Opportunity Management System is reviewed regularly by the Supervisory Board's Investment, Finance and Audit Committee.

Details of risk management at Infineon are presented in the Annual Report in the "Risk and opportunity report" contained in the Combined Management Report, including an in-depth description of both risk and opportunity management as well as the internal control system at Infineon.

Infineon Technologies AG

Statement on Corporate Governance/Corporate Governance Report for the 2021 fiscal year

D&O insurance

The Company maintains a directorsʼ and officersʼ group liability insurance policy ("D&O insurance"). The D&O insurance policy covers personal liability in the event that claims for losses incurred in the course of the performance of their duties are brought against Management and Supervisory Board members and other specified managers. In accordance with the legal regulation in section 93, paragraph 2, AktG, a deductible of 10 percent of the loss up to the amount of one-and-a-half times the annual fixed remuneration of the Management Board member concerned has been agreed in the D&O policy which can be insured personally by Management Board members. No deductible has been agreed for Supervisory Board members.

Financial reporting and auditing

Since the 2009 fiscal year, Infineon Technologies AG has prepared its Consolidated Financial Statements exclusively in accordance with International Financial Reporting Standards (IFRS) as applicable in the EU. The Separate Financial Statements of Infineon Technologies AG continue to be prepared in accordance with the German Commercial Code (HGB). The Separate and Consolidated Financial Statements of Infineon Technologies AG and the Combined Management Report ("Lagebericht") are published within 90 days of the end of the fiscal year upon approval by the Supervisory Board.

The Separate and Consolidated Financial Statements for the 2021 fiscal year were audited by KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, Germany, (KPMG). The audit also considered the Company's system for the early identification of risks as well as the submission of the Declaration of Compliance pursuant to section 161 AktG. In addition, KPMG performed a review of the Half-Year Financial Report pursuant to section 115, paragraph 5, of the German Securities Trading Act (WpHG). Prior to publi- cation, the Half-Year Financial Report, the Separate Financial Statements and the Consolidated Financial Statements were discussed in detail by the Management Board together with the Supervisory Board's Investment, Finance and Audit Committee.


German law requires the Management Board to draw up a responsibility statement ("Bilanzeid"). The information required for this purpose is confirmed to the Management Board internally by senior executives bearing management responsibility.

The Company is required to appoint a new auditor for the 2024 fiscal year.


We report to our shareholders four times a year on business developments and Infineon's business situation, according to a defined financial calendar. The Management Board members inform shareholders, analysts, media and the general public about the quarterly and annual results. Our comprehensive investor relations service features regular meetings and telephone and video conferences with analysts and institutional investors. Generally, reports, notices and disclosures are available on our website  www.infineon.com in German and English.

Infineon Technologies AG also issues ad hoc announcements in addition to its regular reporting to make known information that is not in the public domain and the disclosure of which is deemed to have a significant impact on the value of the Infineon share.

The Company has a Disclosure Committee comprising experienced managers from the Investor Relations, Communication, Finance, Financial Reporting and Accounting, Controlling, Tax and Legal departments. The Disclosure Committee reviews specified financial and other material information published in conjunction with regular financial reporting and ad hoc announcements.

Infineon Technologies AG

Statement on Corporate Governance/Corporate Governance Report for the 2021 fiscal year

Reportable transactions in financial instruments ("Managersʼ Transactions")/ Shareholdings of members of the Management Board and Supervisory Board Persons with executive responsibilities (in Infineonʼs case, members of the Management Board and the Supervisory Board) and certain parties related to them are required by law to notify the Company as well as the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - "BaFin") of their own transactions involving Company shares, Company debt securities or related financial instruments within three business days. This requirement only applies, however, if the total value of the transactions made by a person subject to notification requirements amounts to €20,000 or more within a given calendar year. The Company is obliged to publish the notifications it receives without undue delay, but no later than two business days after receipt of the notification, and have them recorded in the Company Register. Such notifications are also reported to BaFin.

Share-based programs for employees and Management Board members

The full text relating to share-based programs can be viewed on the Infineon website.  

www.infineon.com (about Infineon/Investor/Corporate Governance/compensation)

As an element of the long-term remuneration of management and selected Infineon employees worldwide, a "Performance Share Plan" (PSP) was again applied in the 2021 fiscal year. The same plan applies to members of the Management Board, whereby the latter - unlike other plan participants - have a contractual entitlement to participate in the plan. The principal conditions of the plan for Management Board members are described in the Remuneration Report. The same conditions essentially apply to other PSP participants. The rules differ only with respect to the partially mandatory personal investment in Infineon shares and in the event of premature contract termination. Moreover, the cap stipulated for performance shares only applies to Management Board members.


In addition, the Management Board has adopted a "Restricted Stock Unit Plan" (RSUP) for managers and selected Infineon employees worldwide.

Social responsibility

Infineon combines entrepreneurial success with responsible action. We place great value on the careful use of natural resources and provide solutions for key societal challenges, including the efficient use of energy, environmentally compatible mobility and security in a connected world.

We understand sustainability as the symbiosis between economy, ecology and social engagement, continuously respecting and recognizing the importance of cultural diversity. This is reflected in our Corporate Social Responsibility (CSR) Policy that sets out guidelines for responsible and sustainable business operation, based on the fulfilment of the legal requirements where we operate and the voluntary commitment to follow the ten principles of the UN Global Compact, which we signed up for in 2004. Furthermore, internal rules and requirements, voluntary engagement, as well as the requirements of our customers and investors, form an additional framework for our approach. Further information can be found on our website  www.infineon.com/csr and in the "Sustainability at Infineon" report  www.infineon.com/sustainability_reporting.

Sustainability matters are primarily the responsibility of the Chief Digital Transformation Officer at Management Board level, with reporting and risk management issues being the responsibility of the Chief Financial Officer.

This is an excerpt of the original content. To continue reading it, access the original document here.


Infineon Technologies AG published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2021 12:30:14 UTC.

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