GOV-1 – The Role of the Administrative, Management and Supervisory Bodies

The designation Vonovia comprises Vonovia SE and its Group companies. Vonovia is a European company (SE) in accordance with the German Stock Corporation Act (AktG), the SE Act and the SE Regulation. Its registered headquarters are in Bochum. It has three governing bodies: the Annual General Meeting, the Supervisory Board and the Management Board. The duties and authority of those bodies derive from the SE Regulation (SE-VO), the German Stock Corporation Act (AktG) and the Articles of Association. Shareholders, as the owners of the company, exercise their rights at the Annual General Meeting.

According to the two-tier governance system provided for in the German Stock Corporation Act (AktG), Vonovia has a Management Board and a Supervisory Board. While managing the company is the sole responsibility of the Management Board, the Supervisory Board has a strictly separate role and is responsible for monitoring the company’s business by providing advice on, and supervising, those transactions that are significant for the company. Members cannot sit on both bodies at the same time.

Vonovia’s Management Board comprises five members. As a listed company that is not subject to codetermination, Vonovia’s Supervisory Board has ten members.

In accordance with the governing laws, in particular the SE Regulation and the German SE Employee Participation Act (SEBG), the Supervisory Board is only made up of representatives of the shareholders. The highest representative body of the employees is the Group works council. An SE works council was also set up at the level of Vonovia SE.

In accordance with the German Corporate Governance Code (GCGC), the Supervisory Board and the Management Board must be composed in such a way that these bodies/their members as a group have the knowledge, ability and specialist experience required to properly complete their tasks. The corresponding knowledge, skills and experience – particularly with regard to sustainability – can be found in the Supervisory Board Qualifications Profile set out below, as well as in the description of Supervisory Board and Management Board skills.

One of the members of the Supervisory Board with proven ESG expertise is Hildegard Müller, who chaired the Executive Board of the German Association of Energy and Water Industries for over eight years, formed part of the Management Board of utility company Innogy for three years and, as current President of the German Association of the Automotive Industry, continues to promote the development of this sector according to ESG regulations. Dr. Ute Geipel-Faber, who oversaw sustainability topics for over twelve years as part of Invesco Real Estate’s management, is also considered an ESG expert, as is Dr. Ariane Reinhart, who has chaired the area of sustainability at Continental AG as Chief Human Resources Officer and Labor Relations Director for eleven years. Furthermore, Dr. Daniela Gerd tom Markotten achieved ESG expertise through the development of sustainable business models as CEO of mobility platform moovel, a mobility joint venture of the BMW Group and Daimler AG for sustainable urban mobility, as well as through the founding of her tech start-up IUHHOO GmbH five years ago. She has been able to build on this expertise since 2021 in her role as Head of Digitalization and Technology at Deutsche Bahn AG, where she oversees sustainable innovation and technology, among other things. Ms. Bohle also has proven ESG expertise. She has been a member of the Executive Board of Deutsche Telekom AG since 2019, where her responsibilities as Chief Human Resources Officer and Labor Relations Director include the area of social sustainability. The focus of her work is on employee satisfaction, training and education in the area of digitalization as well as the promotion of diversity, equality and inclusion.

To ensure that members have suitable skills and expertise, the Management Board is engaged in constant dialogue with the Head of Strategy, Corporate Development & Sustainability and calls on the support of the relevant specialist departments depending on the topic. The Head of Strategy, Corporate Management & Sustainability reports to the CEO (at least) once a month to ensure that information on current, relevant topics and on developments related to sustainability is fed to the Management Board. The Management Board also engages in ongoing dialogue with stakeholders and external experts on sustainability issues, particularly those relating to the environment. The Management Board combines various qualification profiles and skills, for example in the areas of real estate, renewable energies, corporate governance, legal and strategy, ensuring that Vonovia has access to crucial expertise in these specialist areas. CEO Rolf Buch served for several years as a moderator of the Initiativkreis Ruhr, where he was responsible for promoting the structural transformation of the Ruhr region into a sustainable, livable and economically strong metropolitan area. As a longtime CFO of major residential real estate companies, Philip Grosse has gained particular expertise in green and social bonds. The CHRO Ruth Werhahn boasts extensive professional experience in HR. Within the Vonovia Group, Daniel Riedl is responsible for building project development in line with an ambitious sustainability agenda, and advises other construction and project companies on sustainable production as a Supervisory Board member. Arnd Fittkau is responsible for operations as well as portfolio management, which plays a crucial role in modernization and renovation actions to implement the climate pathway. Moreover, as a member of the Supervisory Board of Iqony Fernwärme GmbH, he regularly engages in dialogue with experts in sustainable heat supply. All members of the Management Board are obliged to keep abreast of regulatory developments related to sustainability and to keep their sustainability-related knowledge up-to-date.

The Management Board consists of one woman and four men (ratio of female to male members of 1:4), meaning that it is 20% female. Vonovia’s Supervisory Board consists of ten members. There are six female members of the Supervisory Board (60% female and ratio of female to male members of 6:4). The target for appointing Supervisory Board members takes account of the German Act on the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector (Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst), based on which the Supervisory Board should comprise at least 30% women and 30% men. If the Management Board consists of more than three members, which is the case at Vonovia, it must comprise at least one woman and at least one man. Targets also have to be set for the proportion of women at the two management levels below the Management Board (Section 76 (4) sentence 1 AktG). Vonovia is aiming to have achieved the target of 30% women by December 31, 2026. More information on target achievement is set out in S1-9.

All ten members (100%) of the Supervisory Board are considered by the latter to be independent within the meaning of C. 6 and C. 7 of the GCGC. No member of the Supervisory Board was a member of the company’s Management Board or has a personal relationship with a significant competitor of the company as defined by C. 12 of the GCGC.

As of December 31, 2024, the Management Board of Vonovia consisted of the following five members:

• Rolf Buch
• Arnd Fittkau
• Philip Grosse
• Ruth Werhahn
• Daniel Riedl

The current Supervisory Board is made up of the following members:

• Clara C. Streit
• Vitus Eckert
• Birgit M. Bohle
• Jürgen Fenk
• Dr. Florian Funck
• Dr. Ute Geipel-Faber
• Dr. Daniela Gerd tom Markotten
• Matthias Hünlein
• Hildegard Müller
• Dr. Ariane Reinhart

The disclosure of the names of all members of the Management Board and Supervisory Board serves as an expression of their collective responsibility for monitoring impacts, risks and opportunities. The overall responsibility of all Management Board members corresponds to the legal requirement that the management of the company is the shared responsibility of all Management Board members. The internal division of responsibilities serves only to facilitate daily operations, while matters of special or fundamental significance are subject to decision-making by the entire Management Board. The company’s commitment to implementing its sustainability strategy and the climate pathway is a cross-departmental responsibility in which each member of the Management Board must participate. By virtue of their management duty, each Management Board member must also ensure compliance with, and the development of, necessary measures for sustainable business activities by the other Board members. To support and promote the achievement of these goals, the Sustainability Committee plays an important role, having also approved the IROs. As a control and management instrument, all Management Board members are also required to incorporate the risks inherent to their respective areas into the risk report, which is then discussed and approved by the entire Management Board.

The responsibilities of the Supervisory Board (including committees) and the Management Board with regard to impacts, risks and opportunities, as well as strategies, are distributed as follows:

The Supervisory Board

The Supervisory Board appoints, supervises and advises the Management Board and is directly involved in decisions of fundamental importance to the company – also with regard to sustainability issues. The Supervisory Board performs its work in accordance with the legal provisions, the Articles of Association, its rules of procedure and its resolutions. The Supervisory Board examines and adopts the annual financial statements and the combined management report, and adopts the annual financial statements. The Supervisory Board reports in writing to the shareholders at the Annual General Meeting on the result of its examination.

The Supervisory Board has established four committees (the Governance and Nomination Committee, the Audit, Risk and Compliance Committee, the Strategy, Finance and Sustainability Committee and the HR and Remuneration Committee), two of which, namely the Audit, Risk and Compliance Committee and the Strategy, Finance and Sustainability Committee, have explicit responsibilities related to sustainability. Additionally, the HR and Remuneration Committee has an indirect role in sustainability through its determination of variable remuneration elements aligned with sustainable performance criteria. Since the decision on Management Board remuneration is reserved for the Supervisory Board itself, this body is also directly involved in sustainability matters.

The Audit, Risk and Compliance Committee handles, in particular, the monitoring of the accounting process, the effectiveness of the internal control system, risk management system and internal audit system, the audit of the annual financial statements and compliance. Accounting and auditing also include the sustainability statement and the auditing of this report. The members of this committee are Dr. Florian Funck (Chairman), Mr. Vitus Eckert, Dr. Ute Geipel-Faber and Mr. Matthias Hünlein.

The Strategy, Finance and Sustainability Committee discusses focal issues relating to corporate strategy, financial matters and sustainability issues, and prepares resolutions for the Supervisory Board. It advises and monitors the Management Board with regard to its sustainability strategy, in particular the planning of the strategic framework for all Group-wide sustainability measures, including the interaction between entrepreneurial activities and the challenges associated with climate change. The members of this committee are Mr. Jürgen Fenk (Chairman), Ms. Birgit M. Bohle, Dr. Daniela Gerd tom Markotten, Ms. Hildegard Müller, and Ms. Clara C. Streit.

In particular, the HR and Remuneration Committee is responsible for the preparation of discussions and resolutions on the remuneration system and HR strategy, as well as other Management Board matters. In its discussions on adjusting the Management Board remuneration system in the 2024 fiscal year, the committee discussed and took into account the company’s sustainability targets. The members of this committee are Dr. Ariane Reinhart (Chairwoman), Mr. Jürgen Fenk, Dr. Florian Funck and Ms. Clara C. Streit.

The Management Board

The Management Board develops the company’s strategy, coordinates it with the Supervisory Board and implements it. It ensures that all statutory provisions and the company’s internal policies are complied with and is responsible for corporate policy. The Management Board also ensures appropriate risk management and risk controlling in the company. The Chief Executive Officer is responsible for the social and environmental factors to be taken into account in this process, as well as for the associated risks, opportunities and impacts. The CEO submits the corporate planning for the coming fiscal year to the Supervisory Board as well as the midterm and strategic planning, which also includes sustainability targets and the impacts, opportunities and risks that are to be addressed. The Chair of the Management Board informs the Supervisory Board Chair without delay of important events that are essential for the assessment of the situation and the development of the company or for the management of the company as well as of any shortcomings that occur in the monitoring systems.

Vonovia also defines specific sustainability-related responsibilities with regard to the implementation of the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD). The recommendations made by the TCFD constitute important guidance for defining and implementing the climate pathway as part of Vonovia’s systematic way of tackling climate change – with regard to both Vonovia’s contribution to mitigating climate change and the effects of climate change on the company’s economic development. Responsibilities for implementing the TCFD recommendations are distributed as follows at Vonovia:

• The entire Management Board bears responsibility for sustainability and climate change mitigation, as well as climate-related risks and opportunities.
• In its Strategy, Finance and Sustainability Committee, the Supervisory Board addresses climate change mitigation and relevant risks and opportunities, among other topics. 
• The Sustainability Committee – comprising the entire Management Board and representatives of central functional departments – determines the strategy and targets and monitors progress.
• The central department Strategy, Corporate Development & Sustainability, within the executive division of the CEO, coordinates and spearheads the development of the sustainability strategy and the implementation of relevant measures.
• Climate-related risks are calculated and collated on a half-yearly basis as part of the company-wide risk management process; the process is coordinated by Controlling, with the Management Board taking the final decision on risk assessment.
• Energy efficiency modernization and the expansion of renewable energies for heating and powering the existing portfolio in Germany is the responsibility of the CRO (regional business areas and portfolio management); for Austria, the CDO is responsible, for Sweden the CEO of Victoriahem.

Responsibility for the other material sustainability topics is also distributed within the Management Board. The Chief Human Resources Officer (CHRO), for example, is responsible for employee issues, the Chief Rental Officer (CRO) – in conjunction with the decentralized regional managing directors – for all issues related to the provision of affordable housing, the climate-friendly development of the overall portfolio and other social sustainability issues, and the Chief Development Officer (CDO) for sustainable new construction. The CEO is responsible for sustainability-related governance issues, in particular for compliance, while the responsibility of the Chief Financial Officer (CFO) encompasses the structural infrastructure of sustainability data and risk management, as well as reporting, in addition to sustainable financing aspects.

This means that at Vonovia, sustainability is a top management priority, with all Management Board members sharing responsibility. The Chair of the Management Board ensures that the business model and the respective departments are aligned to achieve the company’s goals. On the part of the Supervisory Board, the Strategy, Finance and Sustainability Committee, as well as the Audit, Risk and Compliance Committee (for reporting) perform the corresponding control function. The Management Board has overall responsibility for monitoring, managing and overseeing impacts, risks and opportunities, setting related targets and monitoring progress towards achieving these targets. In this quest, it involves the Sustainability Committee in decision-making and monitoring processes. The Management Board is provided with information on impacts, risks and opportunities in the Risk Report. The Controlling department is responsible for preparing the Risk Report. Technical management of impacts, risks and opportunities is the responsibility of the Strategy, Corporate Development & Sustainability department, and these impacts, risks and opportunities are assessed by the responsible risk owners. The Management Board monitors progress towards achieving the targets through annual sustainability reporting as part of the Annual Report, the ESG Factbook and other sustainability reporting formats approved by the Management Board.

Central coordination of sustainability activities is the responsibility of the Strategy, Corporate Development & Sustainability department. Its core duties include, in particular, the further development of an integrated strategy aligned with sustainability matters, the definition and monitoring of sustainability targets, the providing of impetus and the implementation of sustainability projects. The Strategy, Corporate Development & Sustainability department is also responsible for preparing the ESG Factbook and managing numerous ESG ratings, as well as being responsible for the sustainability statement in the Annual Report, which is prepared in collaboration with the Accounting department.

The Sustainability Committee meets two to three times a year – as required – to discuss the overall strategic direction and to evaluate the company’s sustainability performance. The committee comprises the entire Management Board as well as the heads of Sustainability, Corporate Communications, Controlling, Accounting and Investor Relations. The Audit, Risk and Compliance Committee usually meets up to four times a year, with the Strategy, Corporate Development & Sustainability department providing it with information on the implementation of sustainability reporting on an ad hoc basis.

The availability of appropriate skills and expertise to oversee sustainability matters is ensured by furnishing evidence of the relevant skills (see skills profile/description for the Supervisory Board and Management Board). The Supervisory Board and the Management Board are briefed on sustainability topics at regular intervals.

The skills and expertise of Vonovia’s Management Board and Supervisory Board are closely related to the company’s material impacts, risks and opportunities. The Management Board contributes in-depth expertise in the areas of real estate, energy and sustainability, corporate governance, legal, and strategy so as to be able to make strategic decisions and manage risks effectively. The Supervisory Board supplements this expertise by providing independent monitoring and advice, drawing on its extensive experience in a whole range of sectors and disciplines. Working in tandem, the Management Board and Supervisory Board ensure that impacts are considered, opportunities are exploited and risks minimized in order to create sustainable corporate value.