Corporate governance practices

Declaration dated March 8, 2023

Integrity and ethical decision-making are central to the sustained success of ADVA Optical Networking SE ("ADVA"). The company is committed to its responsibility to comply with national and international laws and regulations, internal policies and ethical standards ("Compliance").

As a group headquartered in Germany, our corporate management adheres in particular to German stock corporation and capital market law, our articles of association and the German Corporate Governance Code, which is implemented in a company-specific manner.

Compliance management system

ADVA has established a comprehensive compliance management system to ensure compliance with laws and regulations, internal policies and ethical standards. The commitment to compliance is supported by the management board and senior management and communicated accordingly. It is based on ADVA's value system, the so-called "core values". These result in a holistic code of conduct, the ADVA Group Code of Conduct and a set of group-wide guidelines that regulate operational processes. Compliance with these standards is mandatory for all employees.

ADVA's Group Code of Conduct and group-wide guidelines are embedded in a robust compliance management system, which is based on the legal requirements and guidelines of the countries most important to the group as well as generally accepted international standards. The following elements are covered: 

• A corporate culture characterized by integrity, accountability, transparency and a strong “tone from the top” (“leadership”)
• Periodic determination of the company's compliance risks ("risk assessment")
• Appropriate risk mitigation processes (“documented procedures”)
• Appropriate training and communication of all compliance elements and measures as well as the respective processes (“training and communication”)
• Means for reporting potential compliance violations personally and anonymously, including clear internal reporting lines, an external ombudsman and an independent ethics and compliance helpline
• Appropriate responses to compliance violations in accordance with our zero tolerance (“investigate and respond”) policy.
  Continuous improvement of the CMS based on identified vulnerabilities (“monitoring and testing”)

This understanding is acknowledged by all employees when signing the company's statement of compliance.

The group's compliance management system is supported by a central compliance department and currently six local employees, the so-called regional compliance officers. All corresponding measures are coordinated by the responsible head of department, the chief compliance officer (CCO) who reports to the chief executive officer and the supervisory board. In case of questions, relevant suggestions for improvement or suspected violations of the rules of conduct, all employees are instructed and encouraged to report them. In addition to clearly defined and actively communicated internal reporting channels, an external ombudsman as well as an externally operated ethics and compliance helpline (“reporting and whistleblowing”) enable confidential and anonymous reporting.

Transparency

ADVA is committed to providing consistent, comprehensive and timely information to the public. Reporting on the course of business and the related development of the company's financial position, net assets and results of operations is conducted in annual and quarterly reports, via press and telephone conferences and interviews with media representatives. Non-financial matters are reported in a consolidated separate non-financial report for ADVA Optical Networking SE and the group, which is part of our annual sustainability report. The consolidated non-financial report is prepared in accordance with Section 315c in conjunction with Sects. 289c to 289e of the German Commercial Code (HGB) and meets the requirements of the German CSR Directive Implementation Act. The sustainability report contains, based on risk and materiality analyses, descriptions of the material matters identified, including management approaches, objectives, initiatives, and performance achieved.

Equal opportunities for all employees

ADVA is committed to continually creating a work environment free of discrimination and harassment. Company employees are recruited, hired, trained and promoted in all areas of operations regardless of race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. The company offers a fair and equal working environment in which each individual is a respected and valued member of our team. ADVA's value system (with the four core values teamwork, excellence, accountability and motivation) and leadership principles (integrity & honesty, decisiveness and respect) guide employees and managers in all business activities.

Diversity concept

When selecting and appointing members of the management board and supervisory board, ADVA places great emphasis on the individual skills and qualities of the executives without unnecessarily restricting itself in this regard. As at all other levels of the company's hierarchy, management board members are selected and appointed without regard to race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. There is no explicitly formulated diversity concept that goes beyond the stipulations of a gender quota pursuant to Sects. 76 (4) and 111 (5) of the German Stock Corporation Act (AktG).The supervisory board has set itself a competence profile for its composition that takes other diversity factors into account.

Control quantities and risk management

Derived from the strategic corporate objectives

• growth and profitability  
• innovation
• operational excellence  
• employees and
• customer experience

the company is ultimately managed especially on the basis of sales revenue, pro forma operating income (pro forma = excluding non-cash expenses from share-based compensation, amortization of goodwill and amortization of intangible assets from acquisitions), net liquidity and Net Promoter Score (a non-financial metric calculated by asking customers how likely it is that they would recommend ADVA to a colleague or friend). Target values for these parameters are defined annually. The risks that could prevent the achievement of these target values are systematically recorded and regularly evaluated so that countermeasures can be taken early on. Details of ADVA's risk management system are presented in the risk report section of the group management report part of the current annual report.

Declaration dated February 22, 2022

Integrity and ethical decision-making are central to the sustained success of ADVA Optical Networking SE ("ADVA"). The company is committed to its responsibility to comply with national and international laws and regulations, internal policies and ethical standards ("Compliance").

As a group headquartered in Germany, our corporate management adheres in particular to German stock corporation and capital market law, our articles of association and the German Corporate Governance Code, which is implemented in a company-specific manner.

 

Compliance management system

ADVA has established a comprehensive compliance management system to ensure compliance with laws and regulations, internal policies and ethical standards. The commitment to compliance is supported by the management board and senior management and communicated accordingly. It is based on ADVA's value system, the so-called "core values". These result in a holistic code of conduct and a set of group-wide guidelines that regulate operational processes. Compliance with these standards is mandatory for all employees.

ADVA's code of conduct and group-wide guidelines are embedded in a robust compliance management system, which is based on the legal requirements and guidelines of the countries most important to the group as well as generally accepted international standards. The following elements are covered: 

• periodic risk evaluation
• adequate internal processes and controls
• periodic compliance training and regular communication
• personal and anonymous reporting channels
• appropriate consequences in case of infringements
• continuous improvement of all compliance measures and processes

The group's compliance management system is supported by a central compliance department and currently six local employees, the so-called regional compliance officers. All corresponding measures are coordinated by the responsible head of department, the chief compliance officer (CCO) who reports to the chief executive officer and the supervisory board. In case of questions, relevant suggestions for improvement or suspected violations of the rules of conduct, all employees are instructed and encouraged to report them. In addition to clearly defined and actively communicated internal reporting channels, an external ombudsman as well as an externally operated ethics and compliance helpline enable confidential and anonymous reporting.

Transparency

ADVA is committed to providing consistent, comprehensive and timely information to the public. Reporting on the course of business and the related development of the company's financial position, net assets and results of operations is conducted in annual and quarterly reports, via press and telephone conferences and interviews with media representatives. Non-financial matters are reported in a consolidated separate non-financial report for ADVA Optical Networking SE and the group, which is part of our annual sustainability report. The consolidated non-financial report is prepared in accordance with Section 315c in conjunction with Sects. 289c to 289e of the German Commercial Code (HGB) and meets the requirements of the German CSR Directive Implementation Act. The sustainability report contains, based on risk and materiality analyses, descriptions of the material matters identified, including management approaches, objectives, initiatives, and performance achieved.

Equal opportunities for all employees

ADVA is committed to continually creating a work environment free of discrimination and harassment. Company employees are recruited, hired, trained and promoted in all areas of operations regardless of race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. The company offers a fair and equal working environment in which each individual is a respected and valued member of our team. ADVA's value system (with the four core values teamwork, excellence, accountability and motivation) and leadership principles (integrity & honesty, decisiveness and respect) guide employees and managers in all business activities.

Diversity concept

When selecting and appointing members of the management board and supervisory board, ADVA places great emphasis on the individual skills and qualities of the executives without unnecessarily restricting itself in this regard. As at all other levels of the company's hierarchy, management board members are selected and appointed without regard to race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. There is no explicitly formulated diversity concept that goes beyond the stipulations of a gender quota pursuant to Sects. 76 (4) and 111 (5) of the German Stock Corporation Act (AktG).The supervisory board has set itself a competence profile for its composition that takes other diversity factors into account.

Control quantities and risk management

Derived from the strategic corporate objectives

• growth and profitability  
• innovation
• operational excellence  
• employees and
• customer experience

the company is ultimately managed especially on the basis of sales revenue, pro forma operating income (pro forma = excluding non-cash expenses from share-based compensation, amortization of goodwill and amortization of intangible assets from acquisitions), net liquidity and Net Promoter Score (a non-financial metric calculated by asking customers how likely it is that they would recommend ADVA to a colleague or friend). Target values for these parameters are defined annually. The risks that could prevent the achievement of these target values are systematically recorded and regularly evaluated so that countermeasures can be taken early on. Details of ADVA's risk management system are presented in the risk report section of the group management report part of the current annual report.

Declaration dated February 23, 2021

Integrity and ethical decision-making are central to the sustained success of ADVA Optical Networking SE ("ADVA"). The company is committed to its responsibility to comply with national and international laws and regulations, internal policies and ethical standards ("Compliance").

As a group headquartered in Germany, our corporate management adheres in particular to German stock corporation and capital market law, our articles of association and the German Corporate Governance Code, which is implemented in a company-specific manner.

Compliance management system

ADVA has established a comprehensive compliance management system to ensure compliance with laws and regulations, internal policies and ethical standards. The commitment to compliance is supported by the management board and senior management and communicated accordingly. It is based on ADVA's value system, the so-called "core values". These result in a holistic code of conduct and a set of group-wide guidelines that regulate operational processes. Compliance with these standards is mandatory for all employees.

ADVA's code of conduct and group-wide guidelines are embedded in a robust compliance management system, which is based on the legal requirements and guidelines of the countries most important to the group as well as generally accepted international standards. The following elements are covered: 

• periodic risk evaluation
• adequate internal processes and controls
• periodic compliance training and regular communication
• personal and anonymous reporting channels
• appropriate consequences in case of infringements
• continuous improvement of all compliance measures and processes

The group's compliance management system is supported by a central compliance department and currently six local employees, the so-called regional compliance officers. All corresponding measures are coordinated by the responsible head of department, the chief compliance officer (CCO) who reports to the chief executive officer and the supervisory board. In case of questions, relevant suggestions for improvement or suspected violations of the rules of conduct, all employees are instructed and encouraged to report them. In addition to clearly defined and actively communicated internal reporting channels, an external ombudsman as well as an externally operated ethics and compliance helpline enable confidential and anonymous reporting.

Transparency

ADVA is committed to providing consistent, comprehensive and timely information to the public. Reporting on the course of business and the related development of the company's financial position, net assets and results of operations is conducted in annual and quarterly reports, via press and telephone conferences and interviews with media representatives. Non-financial matters are reported in a consolidated separate non-financial report for ADVA Optical Networking SE and the group, which is part of our annual sustainability report. The consolidated non-financial report is prepared in accordance with Section 315c in conjunction with Sects. 289c to 289e of the German Commercial Code (HGB) and meets the requirements of the German CSR Directive Implementation Act. The sustainability report contains, based on risk and materiality analyses, descriptions of the material matters identified, including management approaches, objectives, initiatives, and performance achieved.

Equal opportunities for all employees

ADVA is committed to continually creating a work environment free of discrimination and harassment. Company employees are recruited, hired, trained and promoted in all areas of operations regardless of race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. The company offers a fair and equal working environment in which each individual is a respected and valued member of our team. ADVA's value system (with the four core values teamwork, excellence, accountability and motivation) and leadership principles (integrity & honesty, decisiveness and respect) guide employees and managers in all business activities.

Diversity concept

When selecting and appointing members of the management board and supervisory board, ADVA places great emphasis on the individual skills and qualities of the executives without unnecessarily restricting itself in this regard. As at all other levels of the company's hierarchy, management board members are selected and appointed without regard to race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. There is no explicitly formulated diversity concept that goes beyond the stipulations of a gender quota pursuant to Sects. 76 (4) and 111 (5) of the German Stock Corporation Act (AktG).The supervisory board has set itself a competence profile for its composition that takes other diversity factors into account.

Control quantities and risk management

Derived from the strategic corporate objectives

• growth and profitability  
• innovation
• operational excellence  
• employees and
• customer experience

the company is ultimately managed especially on the basis of sales revenue, pro forma operating income (pro forma = excluding non-cash expenses from share-based compensation, amortization of goodwill and amortization of intangible assets from acquisitions), net liquidity and Net Promoter Score (a non-financial metric calculated by asking customers how likely it is that they would recommend ADVA to a colleague or friend). Target values for these parameters are defined annually. The risks that could prevent the achievement of these target values are systematically recorded and regularly evaluated so that countermeasures can be taken early on. Details of ADVA's risk management system are presented in the risk report section of the group management report part of the current annual report.

Declaration dated February 18, 2020

Integrity and ethical decision-making are central to the sustained success of ADVA Optical Networking SE ("ADVA"). The company is committed to its responsibility to comply with national and international laws and regulations, internal policies and ethical standards ("Compliance").

As a group headquartered in Germany, our corporate management adheres in particular to German stock corporation and capital market law, our articles of association and the German Corporate Governance Code, which is implemented in a company-specific manner.

Compliance management system

ADVA has established a comprehensive compliance management system to ensure compliance with laws and regulations, internal policies and ethical standards. The commitment to compliance is supported by the management board and senior management and communicated accordingly. It is based on ADVA's value system, the so-called "core values". These result in a holistic code of conduct and a set of group-wide guidelines that regulate operational processes. Compliance with these standards is mandatory for all employees.

ADVA's code of conduct and group-wide guidelines are embedded in a robust compliance management system, which is based on the legal requirements and guidelines of the countries most important to the group as well as generally accepted international standards. The following elements are covered: 

• periodic risk evaluation
• adequate internal processes and controls
• periodic compliance training and regular communication
• personal and anonymous reporting channels
• appropriate consequences in case of infringements
• continuous improvement of all compliance measures and processes

The group's compliance management system is supported by a central compliance department and currently six local employees, the so-called regional compliance officers. All corresponding measures are coordinated by the responsible head of department, the chief compliance officer (CCO) who reports to the chief executive officer and the supervisory board. In case of questions, relevant suggestions for improvement or suspected violations of the rules of conduct, all employees are instructed and encouraged to report them. In addition to clearly defined and actively communicated internal reporting channels, an external ombudsman as well as an externally operated ethics and compliance helpline enable confidential and anonymous reporting.

Transparency

ADVA is committed to providing consistent, comprehensive and timely information to the public. Reporting on the course of business and the related development of the company's financial position, net assets and results of operations is conducted in annual and quarterly reports, via press and telephone conferences and interviews with media representatives. Non-financial matters are reported in a consolidated separate non-financial report for ADVA Optical Networking SE and the group, which is part of our annual sustainability report. The consolidated non-financial report is prepared in accordance with Section 315c in conjunction with Sects. 289c to 289e of the German Commercial Code (HGB) and meets the requirements of the German CSR Directive Implementation Act. The sustainability report contains, based on risk and materiality analyses, descriptions of the material matters identified, including management approaches, objectives, initiatives, and performance achieved.

Equal opportunities for all employees

ADVA is committed to continually creating a work environment free of discrimination and harassment. Company employees are recruited, hired, trained and promoted in all areas of operations regardless of race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. The company offers a fair and equal working environment in which each individual is a respected and valued member of our team. ADVA's value system (with the four core values teamwork, excellence, accountability and motivation) and leadership principles (integrity & honesty, decisiveness, respect) guide employees and managers in all business activities.

Diversity concept

When selecting and appointing members of the management board and supervisory board, ADVA places great emphasis on the individual skills and qualities of the executives without unnecessarily restricting itself in this regard. As at all other levels of the company's hierarchy, management board members are selected and appointed without regard to race, religion, national origin, sexual orientation, marital status, nationality, age, gender, or physical or mental disability. There is no explicitly formulated diversity concept that goes beyond the stipulations of a gender quota pursuant to Sects. 76 (4) and 111 (5) of the German Stock Corporation Act (AktG).The supervisory board has set itself a competence profile for its composition that takes other diversity factors into account.

Control quantities and risk management

Derived from the strategic corporate objectives

• growth and profitability  
• innovation
• operational excellence  
• employees

the company is ultimately managed on the basis of sales revenue, pro forma operating income (pro forma = excluding non-cash expenses from share-based compensation, amortization of goodwill and amortization of intangible assets from acquisitions), net liquidity and Net Promoter Score (a non-financial metric calculated by asking customers how likely it is that they would recommend ADVA to a colleague or friend). Target values for these parameters are defined annually. The risks that could prevent the achievement of these target values are systematically recorded and regularly evaluated so that countermeasures can be taken early on. Details of ADVA's risk management system are presented in the risk report section of the group management report part of the current annual report.

Declaration dated February 19, 2019

Integrity and ethical decision-making are central requirements for the sustainable success of ADVA Optical Networking SE ("ADVA "). The group recognizes its responsibility to comply with national and international laws and regulations, internal policies and ethical standards – otherwise known as compliance.

As a group headquartered in Germany, German stock corporation and capital markets law as well as our articles of association and the company-specific German Corporate Governance Code form the basis of our corporate governance.

Compliance management system

ADVA has created a comprehensive compliance management system to comply with laws and regulations, internal guidelines and ethical standards. The commitment to compliance is supported by the executive board and executives and communicated accordingly. It is based on ADVA's value system, the so-called "core values." These result in a holistic code of conduct and a set of group-wide policies governing operational procedures. Compliance with these standards is mandatory for all employees.

ADVA's code of conduct and group-wide policies are embedded into a robust compliance management system, which is structured according to the legal requirements and best practices of the group's key countries of operation, as well as common international standards. The following elements are covered: 

• Periodic risk assessments
• Proportionate internal processes and controls
• Periodic compliance training and regular communication
• Means for in-person as well as anonymous reporting
• Proportionate responses to compliance violations 
• Continuous improvement of all compliance procedures

The group's compliance management system is supported by a central compliance department and currently six local employees, the so-called regional compliance officer. All corresponding measures are coordinated by the responsible head of department, the chief compliance officer (CCO), who reports to the chief executive officer and the supervisory board. Whenever employees have questions or suggestions related to compliance or suspect incidents of non-compliance, they are encouraged to speak up. In addition to clearly defined and actively communicated internal points of contact, an external ombudsman (this role is currently covered by Frank Fischer, tax lawyer and former member of ADVA’s supervisory board) and an externally operated ethics and compliance helpline enable confidential and anonymous reporting.

Transparency

Consistent, comprehensive, and timely public information is a high priority at ADVA. The company's reporting on the course of business and the associated development of the financial, asset and earnings situation is reported in annual and quarterly reports, press and telephone conferences and interviews with media representatives.

Equal opportunities for all employees

ADVA is committed to continually creating a work environment without discrimination and harassment. The company's employees are recruited, trained and promoted in all areas of activity without regard to race, religion, origin, sexual orientation, marital status, nationality, age, gender and physical or mental disability. The company offers a fair and equitable working environment in which each individual is a respected and valued member of our team. The group’s core values (teamwork, excellence, accountability and motivation) and ADVA’s leadership principles (integrity, honesty, decisiveness, respect) guide employees and leaders in all business activities.

Diversity concept

When selecting and appointing the members of the management board and the supervisory board, ADVA attaches great importance to the individual skills and qualities of its executives without being unnecessarily limited. As with all other hierarchical levels, board members are selected and appointed regardless of race, religion, origin, sexual orientation, marital status, nationality, age, gender and physical or mental disability. There is no specifically formulated concept of diversity beyond the provisions of a gender quota in accordance with Section 76 (4) and Section 111 (5) of the German Stock Corporation Act. However, the Supervisory Board has decided that its composition be based on a profile of skills and expertise, which takes into account further diversity factors.

Control quantities and risk management

The company has four strategic business goals:

• Growth and profitability  
• Innovation
• Operational excellence  
• Employees

Derived from these, the company is ultimately identified by the key performance indicators of sales revenue, pro forma operating income (pro forma = without non-cash charges for share-based compensation, goodwill amortization and amortization of intangible assets from business combinations), net liquidity and net promoter score (a non-financial criterion ascertained by asking customers how likely they are to recommend ADVA to a colleague or friend). Target values for these parameters are defined annually. Risks that could prevent the achievement of these targets are systematically recorded and evaluated on a regular basis so that corrective action can be taken at an early stage. Details of ADVA’s risk management system are presented in the current annual report in the risk report section of the combined management report.

Declaration dated February 20, 2018

The structures for the management and supervision of the Company are as follows: 

Shareholders and Shareholders' Meeting

Shareholders exercise their rights at the shareholders' meeting. The annual shareholders' meeting of ADVA Optical Networking SE ("ADVA Optical Networking") is held within the first eight months of the financial year. The shareholders' meeting is chaired by the chairman of the supervisory board. The shareholders' meeting resolves all legally assigned matters (among other things: election of the members of the supervisory board, amendments to the articles of association, profit distribution, corporate actions). ADVA Optical Networking is under dual control of the management board and the supervisory board.

Supervisory Board

The principal role of the supervisory board is to appoint and to intensely advise and monitor the management board. At present, the supervisory board of ADVA Optical Networking consists of three members, whom had been elected by the shareholders in the shareholders' meeting. The supervisory board makes its resolutions with simple majority. Equality of votes leads to a resolution in favor of the vote of the chairman.

Objectives Regarding the Composition of the Supervisory Board

The supervisory board of the company defined a concept of diversity embedded in a comprehensive competency profile embedded and specified the following objectives regarding its composition:

• At least one independent member of the Supervisory Board has to be a financial expert within the meaning of § 100 Abs. 5 AktG.
• At least one member of the Supervisory Board should be from a country other than Germany or should have gained significant experience outside of Germany.
• At least two members of the Supervisory Board should be completely independent from shareholders holding, directly or indirectly, more than 10% of the Company's shares outstanding.
• At least one member of the Supervisory Board should have specific expertise in ADVA Optical Networking's industry.
• The member of the supervisory board should be in their entirety familiar with the business sector ADVA is operating in (§ 100 Abs.5 AktG).
• At least one member of the Supervisory Board should be a woman, at least one member should be a man.

In these objectives, the Supervisory Board combines the synergies of keeping the cast as diverse as possible with the advantages of a lean structure while retaining high levels of flexibility when it comes to filling any vacant chairs. As the composition of the Supervisory Board already meets the above-mentioned objectives, all the benefits of personal continuity, which are of particular importance in a committee of this size, can be leveraged at the same time. The Supervisory Board has refrained from determining age in favor of an international diversification, which is seen as the more important factor for the composition of the Group.

Currently, the above-mentioned objectives are fully achieved. Prior to the next recommendations on election, ADVA Optical Networking's Supervisory Board will review these objectives and adjust them if necessary.

Information on the Remuneration of the Supervisory Board

The compensation of ADVA Optical Networking SE's supervisory board members solely consists of a fixed component. On June 4, 2013, the annual shareholders' meeting resolved that each member of the supervisory board should receive reimbursement for expenses and a fixed compensation, payable at the end of each quarter.

Furthermore, ADVA Optical Networking bears the cost of pecuniary damage liability insurance for all members of the supervisory board, provided that the company has purchased such insurance for the members of the supervisory board. During 2017, no loans or advance payments were granted to members of the supervisory board. 

Provided that the 2017 annual shareholders' meeting approves the 2017 activities of the supervisory board, the total compensation payable to the members of the supervisory board for 2017 will be EUR 235 thousand, after EUR 215 thousand for 2016. 

Management Board

As the executive body of the company, the management board manages the affairs of the company and based on the provisions set forth in the German Stock Corporation Act (Aktiengesetz, AktG) needs to follow the interests and corporate policies of the company. The management board is appointed by the supervisory board and consists of four members. The management board consistently, promptly and extensively informs the supervisory board about all key aspects of the business development and the company strategy, as well as about potential risks.

Shareholdings of the Management and Supervisory Boards 

An overview of the shareholdings of the members of the management and supervisory boards, is included in the notes to the financial statements published in the annual and quarterly reports. In addition, ADVA Optical Networking publishes all directors' dealings in securities related to the company immediately after receipt of the corresponding notifications.

Transparency 

Providing consistent, comprehensive and prompt information to the public is a key priority for ADVA Optical Networking. Reporting about the development of the business and the related development of the financial position, net assets position and results of operations is provided in annual and quarterly reports, via press conferences, conference calls and interviews with media representatives. In addition, ADVA Optical Networking publishes press and ad-hoc releases as appropriate.

Equal Opportunities for All Employees

ADVA Optical Networking is an equal opportunity employer and has an ongoing commitment to the creation of a workplace free of discrimination and harassment. The Company recruits, hires, trains and promotes individuals in all job levels without regard to race, religion, ancestry, sexual orientation, marital status, national origin, age, gender and physical or mental disability. ADVA Optical Networking is committed to a fair and equitable workplace where everyone is a respected and valued member of the team. The Company's core values (teamwork, execution, accountability and motivation) and leadership principles (integrity, honesty, decisiveness, respect) guide employees and managers in all business activities.

Accounting and Audit

The financial statements of ADVA Optical Networking SE (parent company financial statements) are prepared in accordance with the German Commercial Code (Handelsgesetzbuch, HGB), and since the fiscal year 2005, the consolidated financial statements of ADVA Optical Networking have been prepared in accordance with International Financial Reporting Standards (IFRS). Once prepared by the management board, the parent company financial statements and the consolidated financial statements are reviewed by the external auditor and by the supervisory board, and are then approved by the supervisory board. With this approval, the parent company financial statements are adopted. The parent company financial statements and the consolidated financial statements are published within 90 days after the end of the financial year.

Control Metrics and Risk Management 

The strategic goals of the Company are: 

• Growth & Profitability
• Innovation
• Operational Excellence
• People

Based on these goals, the company is ultimately managed using the control metrics "revenues", "pro forma operating income" (pro forma = prior to non-cash charges related to stock compensation programs and amortization and impairment of goodwill and acquisition-related intangible assets), net liquidity and net promoter score (a non-financial control metric obtained by asking customers how likely it is that they would recommend ADVA Optical Networking to a colleague or friend). Risks which may work against the achievement of the annually redefined target values for these metrics are captured systematically, allowing to take counteractions at an early stage. Details of the risk management system of ADVA Optical Networking are disclosed in the current annual report in the risk report section of the group management report.

Declaration dated February 21, 2017

 The structures for the management and supervision of the Company are as follows: 

Shareholders and Shareholders' Meeting

Shareholders exercise their rights at the Shareholders' Meeting. The Annual Shareholders' Meeting of ADVA Optical Networking SE (“ADVA Optical Networking”) is held within the first eight months of the financial year. The Shareholders' Meeting is chaired by the Chairman of the Supervisory Board. The Shareholders' Meeting resolves all legally assigned matters (among other things: election of the members of the Supervisory Board, amendments to the articles of association, profit distribution, corporate actions). ADVA Optical Networking is under dual control of the Management Board and the Supervisory Board. 

Supervisory Board

 The principal role of the Supervisory Board is to appoint and to intensely advise and monitor the Management Board. At present, the Supervisory Board of ADVA Optical Networking consists of three members, whom had been elected by the shareholders in the Shareholders' Meeting. The Supervisory Board makes its resolutions with simple majority. Equality of votes leads to a resolution in favor of the vote of the Chairman. 

Objectives Regarding the Composition of the Supervisory Board

 The Supervisory Board of the Company specified the following objectives regarding its composition:

• At least one member of the Supervisory Board has to be an independent financial expert within the meaning of § 100 Abs 5 AktG.
• At least one member of the Supervisory Board should be from a country other than Germany or should have gained significant experience outside of Germany.
• At least two members of the Supervisory Board should be completely independent from shareholders holding, directly or indirectly, more than 10% of the Company’s shares outstanding.
• At least one member of the Supervisory Board should have specific expertise in ADVA Optical Networking’s industry.
• The supervisory board members should be in their entirety familiar with the business sector ADVA is operating in (§ 100 Abs. 5 AktG).
• At least one member of the Supervisory Board should be a woman, at least one member should be a man.

Currently, the above-mentioned objectives are fully achieved. Prior to the next recommendations on election, ADVA Optical Networking’s Supervisory Board will review these objectives and adjust them if necessary.

Information on the Remuneration of the Supervisory Board

 The compensation of ADVA Optical Networking SE’s Supervisory Board members solely consists of a fixed component. On June 4, 2013, the Annual Shareholders’ Meeting resolved that each member of the Supervisory Board should receive reimbursement for expenses and a fixed compensation, payable at the end of each quarter.

Furthermore, ADVA Optical Networking bears the cost of pecuniary damage liability insurance for all members of the Supervisory Board, provided that the Company has purchased such insurance for the members of the Supervisory Board. During 2016, no loans or advance payments were granted to members of the Supervisory Board. 

Provided that the 2017 Annual Shareholders’ Meeting approves the 2016 activities of the Supervisory Board, the total compensation payable to the members of the Supervisory Board for 2016 will be EUR 229 thousand, after EUR 215 thousand for 2015. 

Management Board

 As the executive body of the Company, the Management Board manages the affairs of the Company and based on the provisions set forth in the German Stock Corporation Act (Aktiengesetz, AktG) needs to follow the interests and corporate policies of the Company. The Management Board is appointed by the Supervisory Board and consists of three members. The Management Board consistently, promptly and extensively informs the Supervisory Board about all key aspects of the business development and the Company strategy, as well as about potential risks.

Information on the remuneration of the Management Board

Shareholdings of the Management and Supervisory Boards 

 An overview of the shareholdings of the members of the Management and Supervisory Boards, is included in the notes to the financial statements published in the annual and quarterly reports. In addition, ADVA Optical Networking publishes all directors' dealings in securities related to the Company immediately after receipt of the corresponding notifications. 

Transparency 

 Providing consistent, comprehensive and prompt information to the public is a key priority for ADVA Optical Networking. Reporting about the development of the business and the related development of the financial position, net assets position and results of operations is provided in annual and quarterly reports, via press conferences, conference calls and interviews with media representatives. In addition, ADVA Optical Networking publishes press and ad-hoc releases as appropriate.

Until July 3, 2016, ADVA Optical Networking maintained an insider register according to section 15b of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG); since July 3, 2016 ADVA Optical Networking has set up an insider register according to Article 18 Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) in connection with Commission Implementing Regulation (EU) 2016/347. All insiders listed in these registers have been informed about the respective legal duties and penalties according to the applicable laws.

Equal Opportunities for All Employees

ADVA Optical Networking is an equal opportunity employer and has an ongoing commitment to the creation of a workplace free of discrimination and harassment. The Company recruits, hires, trains and promotes individuals in all job levels without regard to race, religion, ancestry, sexual orientation, marital status, national origin, age, gender and physical or mental disability. ADVA Optical Networking is committed to a fair and equitable workplace where everyone is a respected and valued member of the team. The Company's core values (teamwork, execution, accountability and motivation) and leadership principles (integrity, honesty, decisiveness, respect) guide employees and managers in all business activities. 

Accounting and Audit

The financial statements of ADVA Optical Networking SE (parent company financial statements) are prepared in accordance with the German Commercial Code (Handelsgesetzbuch, HGB), and since the fiscal year 2005, the consolidated financial statements of ADVA Optical Networking have been prepared in accordance with International Financial Reporting Standards (IFRS). Once prepared by the Management Board, the parent company financial statements and the consolidated financial statements are reviewed by the external auditor and by the Supervisory Board, and are then approved by the Supervisory Board. With this approval, the parent company financial statements are adopted. The parent company financial statements and the consolidated financial statements are published within 90 days after the end of the financial year. 

Control Metrics and Risk Management 

 The strategic goals of the Company are: 

• Growth & Profitability,
• Innovation,  
• Operational Excellence and  
• People.  

Based on these goals, the Company is ultimately managed using the control metrics "revenues", "pro forma operating income" (pro forma = prior to non-cash charges related to stock compensation programs and amortization and impairment of goodwill and acquisition-related intangible assets), net liquidity and net promoter score (a non-financial control metric obtained by asking customers how likely it is that they would recommend ADVA Optical Networking to a colleague or friend). Risks which may work against the achievement of the annually redefined target values for these metrics are captured systematically, allowing to take counteractions at an early stage. Details of the risk management system of ADVA Optical Networking are disclosed in the current annual report in the risk report section of the Group management report. 

Declaration dated February 23, 2016

 The structures for the management and supervision of the Company are as follows: 

Shareholders and Shareholders' Meeting

 Shareholders exercise their rights at the Shareholders' Meeting. The Annual Shareholders' Meeting of ADVA Optical Networking SE (“ADVA Optical Networking”) is held within the first eight months of the financial year. The Shareholders' Meeting is chaired by the Chairman of the Supervisory Board. The Shareholders' Meeting resolves all legally assigned matters (among other things: election of the members of the Supervisory Board, amendments to the articles of association, profit distribution, corporate actions). ADVA Optical Networking is under dual control of the Management Board and the Supervisory Board. 

Supervisory Board

 The principal role of the Supervisory Board is to appoint and to intensely advise and monitor the Management Board. At present, the Supervisory Board of ADVA Optical Networking consists of two members, whom had been elected by the shareholders in the Shareholders' Meeting, and one member assigned by the court until the 2016 Annual Shareholders’ Meeting (status: February 23, 2016). The Supervisory Board makes its resolutions with simple majority. Equality of votes leads to a resolution in favor of the vote of the Chairman. 

Objectives Regarding the Composition of the Supervisory Board

 The Supervisory Board of the Company specified the following objectives regarding its composition:

• At least one member of the Supervisory Board shall be an independent financial expert within the meaning of section 100 paragraph 5 of the German Stock Corporation Act (Aktiengesetz, AktG). 
• At least one member of the Supervisory Board should be from a country other than Germany or should have gained significant experience outside of Germany. 
• At least two members of the Supervisory Board should be completely independent from shareholders holding, directly or indirectly, more than 10% of the Company’s shares outstanding. 
• At least one member of the Supervisory Board should have specific expertise in ADVA Optical Networking’s industry. 
• At least one member of the Supervisory Board should be a woman. 

Currently, the above-mentioned objectives are fully achieved (status: February 23, 2016). Prior to the next recommendations on election, ADVA Optical Networking’s Supervisory Board will review these objectives and adjust them if necessary.

Information on the Remuneration of the Supervisory Board

 The compensation of ADVA Optical Networking SE’s Supervisory Board members solely consists of a fixed component. On June 4, 2013, the Annual Shareholders’ Meeting resolved that each member of the Supervisory Board should receive reimbursement for expenses and a fixed compensation, payable at the end of each quarter.

Furthermore, ADVA Optical Networking bears the cost of pecuniary damage liability insurance for all members of the Supervisory Board, provided that the Company has purchased such insurance for the members of the Supervisory Board. During 2015, no loans or advance payments were granted to members of the Supervisory Board. 

Provided that the 2016 Annual Shareholders’ Meeting approves the 2015 activities of the Supervisory Board, the total compensation payable to the members of the Supervisory Board for 2015 will be EUR 215 thousand, after EUR 224 thousand for 2014. 

Management Board

 As the executive body of the Company, the Management Board manages the affairs of the Company and based on the provisions set forth in the German Stock Corporation Act (Aktiengesetz, AktG) needs to follow the interests and corporate policies of the Company. The Management Board is appointed by the Supervisory Board and consists of three members (status: February 23, 2016). The Management Board consistently, promptly and extensively informs the Supervisory Board about all key aspects of the business development and the Company strategy, as well as about potential risks.

Information on the remuneration of the Management Board

Shareholdings of the Management and Supervisory Boards 

An overview of the shareholdings of the members of the Management and Supervisory Boards, is included in the notes to the financial statements published in the annual and quarterly reports. In addition, ADVA Optical Networking publishes all directors' dealings in securities related to the Company immediately after receipt of the corresponding notifications. 

Transparency 

 Providing consistent, comprehensive and prompt information to the public is a key priority for ADVA Optical Networking. Reporting about the development of the business and the related development of the financial position, net assets position and results of operations is provided in annual and quarterly reports, via press conferences, conference calls and interviews with media representatives. In addition, ADVA Optical Networking publishes press and ad-hoc releases as appropriate.

According to section 15b of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG), ADVA Optical Networking has set up an insider register. All insiders listed in this register have been informed about the respective legal duties and penalties.

Equal Opportunities for All Employees

 ADVA Optical Networking is an equal opportunity employer and has an ongoing commitment to the creation of a workplace free of discrimination and harassment. The Company recruits, hires, trains and promotes individuals in all job levels without regard to race, religion, ancestry, sexual orientation, marital status, national origin, age, gender and physical or mental disability. ADVA Optical Networking is committed to a fair and equitable workplace where everyone is a respected and valued member of the team. The Company's core values (teamwork, execution, accountability and motivation) and leadership principles (integrity, honesty, decisiveness, respect) guide employees and managers in all business activities. 

Accounting and Audit

 The financial statements of ADVA Optical Networking SE (parent company financial statements) are prepared in accordance with the German Commercial Code (Handelsgesetzbuch, HGB), and since the fiscal year 2005, the consolidated financial statements of ADVA Optical Networking have been prepared in accordance with International Financial Reporting Standards (IFRS). Once prepared by the Management Board, the parent company financial statements and the consolidated financial statements are reviewed by the external auditor and by the Supervisory Board, and are then approved by the Supervisory Board. With this approval, the parent company financial statements are adopted. The parent company financial statements and the consolidated financial statements are published within 90 days after the end of the financial year. 

Control Metrics and Risk Management 

 The strategic goals of the Company are: 

• Growth & Profitability,
• Innovation,  
• Operational Excellence and  
• People.  

Based on these goals, the Company is ultimately managed using the control metrics "revenues", "pro forma operating income" (pro forma = prior to non-cash charges related to stock compensation programs and amortization and impairment of goodwill and acquisition-related intangible assets), net liquidity and net promoter score (a non-financial control metric obtained by asking customers how likely it is that they would recommend ADVA Optical Networking to a colleague or friend). Risks which may work against the achievement of the annually redefined target values for these metrics are captured systematically, allowing to take counteractions at an early stage. Details of the risk management system of ADVA Optical Networking are disclosed in the current annual report in the risk report section of the Group management report.