Corporate governance

At a glance

  • The Board of Managing Directors acts in the interests of the company to achieve sustainable value creation
  • The Governance, Risk & Compliance Committee (GRCC) began its work at the start of 2023

Governance structure

Part of NFRThe Schaeffler Group is managed by the Board of Managing Directors of Schaeffler AG. In addition to the Chief Executive Officer (Group CEO), the members of the Board of Managing Directors are part of this board. It aligns its actions and decisions with the interests of the company, i.e., considering the interests of shareholders, employees, and other interest groups (stakeholders) associated with the company to achieve the goal of sustainable value creation. The members of the Board of Managing Directors conduct business in accordance with the law, the Articles of Association, and internal regulations. In doing so, they must observe the reservation of consent set out in the Supervisory Board’s internal regulations. The Board of Managing Directors has direct responsibility for managing the company, defines the objectives and strategic direction, coordinates these with the Supervisory Board, manages the implementation of the corporate strategy, and regularly discusses the status of implementation with the Supervisory Board. The Chief Executive Officer (Group CEO) coordinates the management of the company and the Schaeffler Group. The Board of Managing Directors of Schaeffler AG consists of eight members. The proportion of female employees in the reporting year remained unchanged at 12.5 %.

In addition to the divisions and functions, the matrix organization includes the regions Europe, Americas, Greater China, and Asia/Pacific, each of which is headed by a regional CEO. The regional CEOs report directly to the Chief Executive Officer. The regional CEOs and the Board of Managing Directors form the Executive Board of the Schaeffler Group. The management structure thus reflects the organizational structure. 

The task of the Supervisory Board is to advise and monitor the Board of Managing Directors in its management of the company. The Board of Managing Directors must involve the Supervisory Board in decisions critical to the company. For this purpose, the internal regulations govern for the Supervisory Board which legal transactions and measures of the Board of Managing Directors require the approval of the Supervisory Board or the Executive Committee. The Supervisory Board performs its activities according to the statutory provisions, the Articles of Association, and the internal regulations. For the Supervisory Board the internal regulations govern its organization and work.

The Chairman of the Supervisory Board coordinates the work of the Supervisory Board, which is made up of 20 members. Of these, ten members are appointed by resolution of the Annual General Meeting and ten members are elected by the employees according to the provisions of the Co-Determination Act. The term of the shareholder representatives on the Supervisory Board ends at the conclusion of the 2024 Annual General Meeting. The term of the employee representatives ends with the conclusion of the 2025 Annual General Meeting.

Schaeffler AG Supervisory Board
in percentage

As at December 31, 2023, 90 % (prior year: 80 %) of the shareholder representatives on the Supervisory Board were elected independently. Maria-Elisabeth Schaeffler-Thumann resigned from the Schaeffler AG Supervisory Board on April 20, 2023. The number of independent members of the Supervisory Board has increased with the appointment of Katherina Reiche. The proportion of female members on Schaeffler AG’s Supervisory Board remained unchanged at 35 % during the year, consisting of four female employee representatives and three female shareholder representatives.Part of NFR

Part of NFRThe Governance, Risk & Compliance Committee (GRCC) is an important part of governance, which began its work at the beginning of 2023 under the supervision of the CEO and CFO. The GRCC provides an overview of the completeness of coverage of relevant governance, risk, and compliance management requirements. It oversees their appropriate, effective, and consistent implementation and coordinates the integrated reporting on this. The GRCC also aims to promote a holistic view of significant risks for the company.

Schaeffler Group governance structure

The GRCC is supported by the Group Compliance and Risk Council (GCRC). It increases transparency in internal structures, organization, and responsibilities. The Group Chief Compliance Officer of the Schaeffler Group chairs the GCRC, which is made up of those responsible for the relevant governance functions (including compliance, legal, risk management, internal control system, and internal audit). The GCRC is tasked with supporting the Board of Managing Directors in its organizational duties regarding compliance and risk management. The main objectives of the GCRC are to define and delineate responsibilities and interactions and to avoid redundancies. It is also expected to create a consistent and complete view of the risk situation in the divisions, functions, and regions based on a standardized method of assessment and prioritization. Another goal of the GCRC is to develop and monitor risk reduction measures. The Compliance & Risk Working Group provides operational support to the GCRC. This is made up of staff representatives from the functions represented on the GCRC.Part of NFR

Risk management

Part of NFRThe Schaeffler Group deliberately takes calculated business risks to achieve its corporate objectives and thus implement its corporate strategy and utilize the associated opportunities. The risk management system aims to identify these risks at an early stage and to manage them in accordance with the risk strategy.

The Schaeffler Group’s opportunity and risk reporting in the group management report provides comprehensive information about the company’s risk management system as well as significant risks that have a medium or high negative impact on assets, finances, or income. The Executive Board has set a threshold of EUR 5 million. Risks that are identified and assessed to be above this are included in the risk inventory. This includes risks related to the Schaeffler Group’s business operations, business relationships, or products and services. Climate risks are also part of the risk management system.

With the integration of the non-financial ESG risks into the top-down risk assessment process of the Schaeffler Group’s risk management system, the non-financial risk impact of the five reportable aspects in accordance with Section 289c HGB – in addition to the evaluation of their financial risk impact – is assessed using a similar assessment logic. The risk survey showed that there were no reportable risks in the 2023 reporting year in accordance with CSR-RUG (Section 289c (3) HGB).

As proactive risk management, the Energy, Environment, Health and Safety (EnEHS) management system also serves to identify and avoid systematic risks and potential negative impacts of the Schaeffler Group on the environment and occupational health and safety at an early stage.Part of NFR

Opportunities and risks as a result of climate change

Part of NFRIn addition to analyzing the above non-financial ESG risks, the Schaeffler Group is also continuously developing the analysis of climate-related opportunities and risks in line with the recommendations of the Task Force on Climate-related Financial Dis­closures (TCFD)

The company analyzes various physical risks in the scope of climate scenarios. For the analysis, the Schaeffler Group selected the “Sustainable Development Scenario” of the International Energy Agency as the optimistic and the “RCP 8.5” from the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) as the pessimistic physical climate scenario. The parameters, assumptions, and analysis methods contained therein remained unchanged. The results then served as the basis for developing scenario-specific action plans with climate-relevant objectives. 

Climate-related risks are included in the Schaeffler Group’s risk management system. Climate-related risks can be identified in all risk categories as strategic, operational, legal or financial. “Strategic” includes risks that relate to a changed market situation (e.g., the transition to e-mobility). “Legal” includes, for example, risks in connection with current and future climate-related regulations. “Operational” includes, for example, acute physical risks that lead to production downtime. The assessed risks and opportunities are updated in the risk management tool within a predefined structure designed to ensure standardized documentation. A qualitative assessment is provided if the amount of damage cannot be determined in monetary terms, for example, the reputational damage is assessed qualitatively according to its relevance to the public interest (low, medium, high). 

Risks as a result of climate change

RegulationsCarbon prices or taxes could lead to rising costs for energy, transportation services, or raw materials – and thus to rising production costs.
MarketVarious mechanical components will no longer be needed in the future. Future demand is considered regarding OEMs, for example, in part using scenario analyses.
TechnologyThe switch to lower-emission technologies requires the increased development and manufacture of products and system solutions, such as for the electrification of the powertrain.
Despite increasing global regulations, the Schaeffler Group is currently not directly affected by climate-related laws and regulations in most cases. The Schaeffler Group continues to closely monitor regulatory developments through the relevant departments.
ReputationIncreased awareness of various aspects of climate change also leads to higher stakeholder expectations, e.g., for improved carbon efficiency or neutrality. Unfulfilled expectations potentially lead to reputational damage impacting share prices, profits and balance sheets, as well as potentially less measurable impacts such as continued brand deterioration.
Acute and chronic physical climate risksIncreased severity and frequency of extreme weather events such as hurricanes and floods can have an impact on operations or the supply chain. Chronic physical risks are particularly relevant regarding areas of high water stress in India, Mexico, China, and Romania. Other plants in Germany, South Africa, Spain, and the USA are expected to be under high water stress over the next decade. For the Schaeffler Group, this results in an increased need for adaptation (investments), new regulations, and technological changes, for example for water usage or recycling.

The risk response includes all measures that mitigate the effects of the risk. These include risk avoidance (the risk is eliminated by avoiding risk-bearing transactions or processes), risk mitigation (the extent of damage or probability of occurrence is reduced through suitable measures), risk transfer (the risk is transferred to another risk carrier), and risk acceptance (which means that all risks that are not mitigated, prevented, or transferred to another risk carrier must be tolerated as business risks).

The global demand for renewable energy is growing as part of global climate change and as a result of climate policy. The Schaeffler Group supports the expansion of renewable energy production with the necessary components and solutions. With innovative bearing solutions for wind turbines in particular, the Schaeffler Group helps to make wind turbines more reliable and reduce the costs of renewable energy production. Opportunities for the product portfolio or regarding the Schaeffler Group’s employees are explained in the respective chapters.Part of NFR

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