Corporate Governance Report
and Statement of Compliance
Rentenbank is committed to the Public Corporate Governance Code of the German federal government
Effective corporate governance is a critically important prerequisite of responsible and sustainable governance. For this reason, Rentenbank’s Supervisory Board adopted the German federal government’s Public Corporate Governance Code (PCGC, version of 13 December 2023) on 20 March 2024.
Rentenbank’s Management Board and Supervisory Board identify with and respect the principles of the PCGC. Compliance with the nationally and internationally recognised standards of good and responsible corporate governance set out in the PCGC in the conduct of Rentenbank’s activities is expressly recognised as being in the interest of the German federal government. Any deviations from the principles of the PCGC are disclosed and explained in the annual Statement of Compliance.
Management by the Management Board and supervision by the Supervisory Board
The Management Board reports to the Supervisory Board on the course of business with due regard to all relevant planning issues, as well as on the bank’s risk position, risk management, compliance with banking regulations, and financial condition on a regular basis, but at least four times a year. In addition, the Management Board remains in regular contact with the Chairman of the Supervisory Board and discusses important questions of management and strategy with him. The Supervisory Board has adopted a non-exhaustive list of events and criteria that must be reported immediately to the Supervisory Board, its Chairman, and/or the Chairmen of the committees.
The Management Board kept the Supervisory Board completely informed of all relevant matters concerning the bank’s planning, risk position, risk management, compliance with banking regulations, business performance, and financial condition in the past financial year.
Management Board
The Management Board manages the bank under its own responsibility in accordance with all applicable laws and regulations, particularly including Rentenbank’s Governing Law, as well as the bank’s Articles of Incorporation and the Management Board’s rules of procedure. It is bound to safeguard the bank’s interests and fulfil its statutory promotional mandate. One woman was represented on the three-person Management Board and served as the Management Board Chairperson in the reporting period.
Supervisory Board
The Supervisory Board supervises and advises the Management Board in the management of the bank in accordance with Rentenbank’s Governing Law, the bank’s Articles of Incorporation, and the Supervisory Board’s rules of procedure. It appoints the members of the Management Board and decides on the ratification of their actions. The Supervisory Board may give general and specific instructions to the Management Board. The Supervisory Board selects the independent auditor, grants the audit engagement, and agrees the compensation of the independent auditor with the latter. Among its other tasks, the Audit Committee formed by the Supervisory Board also supervises the independence of the independent auditor.
In accordance with Rentenbank’s Governing Law, the Supervisory Board is composed of 18 members. The Chairman of the Supervisory Board is chosen by the Supervisory Board from the ranks of the members designated by the German Farmers Association (Deutscher Bauernverband e. V., DBV). The Supervisory Board Chairman in the past financial year was the President of the DBV, Joachim Rukwied. Five women were represented on the Supervisory Board in the reporting period.
Two Supervisory Board members attended fewer than half the total of three Supervisory Board meetings held in the past financial year.
Legal oversight
In accordance with Section 11 (1) of Rentenbank’s Governing Law, the bank is subject to the legal oversight of the German Federal Ministry of Food and Agriculture (regulatory authority), which makes its decisions in agreement with the German Federal Ministry of Finance. The regulatory authority ensures that the bank’s activities serve the public interest, particularly the promotion of agriculture and rural areas, and comply with the applicable laws and regulations and Rentenbank’s Articles of Incorporation.
Review pursuant to Section 25d (11), sentence 1 numbers 3 and 4 KWG
In accordance with Section 25d (11), sentence 1 nos. 3 and 4 German Banking Act (Kreditwesengesetz, KWG), the Supervisory Board conducts a review of the structure, size, composition, and performance of the Management Board and the Supervisory Board overall, as well as the knowledge, skills, and experience of individual governing body members and each governing body individually. In accordance with Section 9 (3) numbers 2 c, d of the Supervisory Board’s rules of procedure, the Supervisory Board is assisted in the conduct of the review by the Nomination Committee. The Supervisory Board evaluated the results at its meeting of 20 March 2024, its constitutive meeting of 4 July 2024, and its meeting of 15 November 2024, discussed any need for adjustments, and formulated action recommendations on that basis.
Avoidance of conflicts of interest
The members of the Management Board and the Supervisory Board are bound to safeguard the bank’s interests in the performance of their duties. Members of the Management Board and the Supervisory Board are required to disclose to the Supervisory Board Chairman and the Supervisory Board, respectively, any potential conflicts of interest in connection with their activity. No conflicts of interest of Management Board and Supervisory Board members arose in the past financial year.
Compensation policies for the Management Board and the Supervisory Board
The compensation of Management Board members is set and regularly monitored by the Supervisory Board. Since 2016, the compensation system of the Management Board has consisted of a purely fixed compensation model. The overall compensation of Management Board members does not include any components with an incentive effect.
The compensation of Supervisory Board members is specified by resolution of the annual general meeting; this resolution requires the approval of the regulatory authority. Compensation is set with due regard to the responsibility and scope of activity of the individual Supervisory Board members and the economic position of Rentenbank.
Transparency and dissemination of information
Transparency and dissemination of information are especially important for the bank. In disseminating information, Rentenbank adheres to the principle of equal treatment of investors and other interested parties. The bank also publishes all important information on its website (www.rentenbank.de). In addition to its annual financial statements, all press releases and ad-hoc disclosures of Rentenbank, the Statement of Compliance with the PCGC, and ESG notices are published there.
Statement of Compliance of the Management Board and the Supervisory Board
In the 2024 financial year, Landwirtschaftliche Rentenbank followed the recommendations of the PCGC in the version of 13 December 2023, with the following exceptions:
- The bank opted not to state the compensation of Management Board and Supervisory Board members in the present Corporate Governance Report pursuant to Sections 7.2.1 and 7.2.2 PCGC because the compensation of each member is stated by name in a generally comprehensible form in Rentenbank’s Annual Report (Notes to the financial statements, pp. 139 - 141).
- The bank opted not to disclose in the present Corporate Governance Report the measures defined in Sections 5.5.1. - 5.5.3. PCGC, including statements on the subject of its sustainability activities and the development of the percentage of positions held by women on the Management Board and the two management levels beneath that, as well as on the Supervisory Board, because this information is provided in detail in the sections of the Annual Report entitled Sustainable corporate governance (Sections 1.1. and 1.2) and Our employees (Section 3).
- In accordance with Section 4 (2) of the Management Board’s rules of procedure, the distribution of responsibilities may be specified in a business distribution plan without the approval of the Supervisory Board – contrary to Section 5.2.6 PCGC. This ensures the required flexibility to make necessary changes.
- In exceptional cases, the committees not only prepare the decisions of the Supervisory Board, but make the final decisions themselves– contrary to Section 6.1.7 PCGC – for reasons of practicability and efficiency.
- No age limit has been specified for resignation from the Management Board according to Section 5.2.5 PCGC.
- By way of exception to Section 4.4 PCGC, members of the governing bodies may utilise the promotional loans granted under Rentenbank’s special promotional programmes. Due to the standardisation of lending rules and the principle of on-lending by local banks, there is no risk of conflicts of interest in the utilisation of promotional loans.
- By way of exception to Section 6.5, two regular meetings of the Supervisory Board and its committees are held every year. The Expert Committee meets once a year. The Risk Committee meets three times a year. Other special meetings may be held if necessary.
Subject to the exceptions noted above, Landwirtschaftliche Rentenbank also intends to conform with the PCGC in the future.
Landwirtschaftliche Rentenbank
March 2025
The Management Board
The Supervisory Board