BWT Corporate Governance

Corporate governance comprises all measures to ensure that the interests of the shareholders are consistent with the actions of the management and the employees of a company. Since going public in 1992, BWT has been pursuing the goal of sustainable ecologically and economically-oriented value enhancement.


In the Austrian Corporate Governance Code, BWT follows a regulation framework of standards for sound management and supervision of the company. This includes the standards of good corporate management common in international practice (OECD Principles) but also the important significant provisions of Austrian corporation law in this respect. This enables a high level of transparency for all stakeholders of the company.


To avoid insider trading, a policy based on the Emittenten-Compliance-Verordnung (ECV – Regulation on Compliance for Issuers, current version: 2006) of the Austrian Financial Market Authority has been in place at BWT since 2002 and is implemented in the company by the Compliance Officer. The Code of Conduct which came into force in 2007 is aimed at all employees and includes all the principles of conduct. It provides guidance on the fundamental ethical and legal duties of BWT employees.


The new version that now applies – an amended version of the first version formulated in 2002 – is binding with effect from January 1, 2006. It includes the corporate governance recommendations of the European Commission and the 2005 Gesellschaftsrechtsänderungsgesetz (2005 GesRÄG – 2005 Austrian Company Law Amendment Act), among other guidelines. The improvements primarily relate to the Supervisory Board (independence) and the compensation.

The Code comprises three rule categories:

1. Legal requirement (“L”) – including compulsory regulations
2. The “C” rules (Comply or Explain) in the Austrian Code of Corporate Governance are to be followed; any deviation must be explained and the reasons stated in order to comply with the Code
3. Recommendation rules (“R”)

Below are more detailed explanations of the individual rules of the Austrian Corporate Governance Code:

Rule 18
The internal auditing duties are currently being performed by the Group Controlling and Group Treasury departments. The Management and Supervisory Boards receive regular reports about important results of these auditing activities.

Rules 28 through 30
Performance-related payments at BWT AG are not made via share options, but are dependent on the attainment of predefined goals (e.g. company results, qualitative and quantitative goals). In 2007, 90% of the total remuneration of the Management Board was fixed and 10% performance-related. There is no company pension. There are also no Management Board entitlements or individual legal rights should the function be terminated.

Rule 38
The BWT AG Articles of Association do not stipulate any age limit for the members of the Board of Management. Appointments are made solely on the basis of professional and personal qualification.

Rule 39
The Audit Committee is the only committee established by the Supervisory Board of BWT AG. The Supervisory Board of BWT AG comprises experts in various fields and holds constructive meetings at regular intervals, which cover strategic, balance sheet, and personnel-related matters of the company. In this context, the BWT AG Supervisory Board is also involved in all-important decisions of the Management Board as an advisory body.

Rule 51
The members of the Supervisory Board received expense reimbursements totaling € 30,000 for the activities during the 2007 financial year (2006: € 18,000). No further payments were made.

Rule 53
“Independent” in the sense of the blanket clause of Rule 53 refers to members of the Supervisory Board whose business or personal relationship with BWT AG or its Management Board does not constitute a material conflict of interest allowing the member’s behavior to be influenced. The criteria for independence are set in accordance with the guidelines of the Corporate Governance Code (Annex 1).


The Supervisory Board thus comprises the following independent members:
Dr. Leopold Bednar, Gerda Egger, Dr. Wolfgang Hochsteger, Klaus Kastner MBA, Dipl.-Vw. Ekkehard Reicher, Serge Schmitt.

Rule 57
The BWT AG Articles of Association do not stipulate any age limit for the members of the Supervisory
Board.

Regel 58

Where applicable, other Supervisory Board mandates or similar functions in domestic or foreign listed corporations are disclosed:
Dr. Leopold Bednar, Gerda Egger, Dr. Wolfgang Hochsteger and Serge Schmitt are also Supervisory Board members of Christ Water Technology AG.

Rule 70
Reports regarding the acquisition and sale of BWT shares by members of the Management Board are communicated in accordance with Article 48d/4 of the Stock Exchange Act to the Austrian Financial Market Authority. Reference is made to the Austrian Financial Market Authority website on the BWT AG website.

Rule 80
The assessment of the effectiveness of risk management by is made in the course of internal reporting directly to the Management Board.