Parliamentary Commission on Banking StandardsWritten evidence from Deutsche Bank

Overview

Deutsche Bank is pleased to be able to assist the Parliamentary Commission with its deliberations and welcomes the invitation to provide evidence on the specific question of corporate governance.

As a German company, Deutsche Bank is governed under a dual board structure. Non- executive directors on the Supervisory Board scrutinise the executive directors on the Management Board responsible for day to day management. The Management Board is responsible for ensuring the Bank meets the interests of shareholders as well as other stakeholders.

Deutsche Bank has a strong risk management culture and centralised and independent governance structures to support this. Since the financial crisis, changes have been made to the Bank’s risk profile and arrangements for anticipating and addressing product, transaction and reputational risks before they crystallise. We have also rolled out a risk culture initiative to strengthen this emphasis on every employee having a role in meeting standards.

Compensation practices have been overhauled to align better with risk management, and adequately take into account the desired culture and behaviour. However, the new co-CEOs acknowledge that more must be done to embed cultural change, one of three planks in their recently announced strategy review. Furthermore, Deutsche Bank announced in September an independent panel to review its compensation structures and governance.

As a number of the specific questions posed by the call for evidence do not translate particularly well to the twin board structure under which we operate, we have tried to address the key themes of interest to the Commission rather than attempting to answer each and every question.

1. Board Composition, Role and Effectiveness

Deutsche Bank is incorporated in Germany and governed by the German Corporate Governance Code (the Code) and by the German Stock Corporation Act. This requires that we establish a twin board structure under which supervisory and management functions are clearly delineated, with no cross-over of membership and clearly differentiated responsibilities:

Management Board—is responsible for managing the company with the objective of creating sustainable value in the interest of its shareholders and other stakeholders. The Management Board has exclusive responsibility for the day-to-day management of the Deutsche Bank Group. It is responsible for defining and implementing comprehensive and aligned business and risk strategies for the Bank.

Supervisory Board—monitors the management of Deutsche Bank and includes representatives elected by our German-based employees (50%) and representatives elected by Deutsche Bank shareholders, in line with the German co-determination law. It is responsible for appointing the members of the Management Board and determines their compensation. No current members and no more than two former members of the Management Board may be members of the Supervisory Board.

Both Boards have an obligation under the Code to “ensure the continued existence of the enterprise and its sustainable creation of value in conformity with the principles of the social market economy.” The Management Board is assisted in its function by the Group Executive Committee (“GEC”) which comprises the members of the Management Board and senior representatives from client-facing business divisions and from the management of the regions, as appointed by the Management Board. The GEC serves as a tool to coordinate the businesses and regions. It has, as its prime tasks and responsibilities, the provision of ongoing information to the Management Board on business developments and transactions, litigation, regulatory developments, a regular review of business segments, consultation with and furnishing advice to the Management Board on strategic decisions and preparation of materials relevant to decisions to be made by the Management Board.

Under the German governance model, it is the Supervisory Board which is closest in function to the role performed by non-executive directors under the UK model. The Supervisory Board’s key function is, literally, to supervise the Management Board. It meets formally at least six times a year and has powers to secure the resources it requires in the conduct of its role. It can examine the books and assets of Deutsche Bank, it appoints members of the Management Board, can summon them and employees, and appoints the Bank’s external auditors. It receives an annual “Long-form Report” from the external auditors on the Bank, which goes into the detail behind the Annual Report and in particular sets out risks and concerns.

If the Supervisory Board wish to commission external information or advice on particular topics they may do so.

Details of the operation and a summary of the discussions that the Supervisory Board undertakes each year are captured in our Annual Report. A copy of the most recent Annual Report (for financial year 2011) is attached by way of illustration (pages 10–17).

The Supervisory Board appoints members of five committees from its own number. A description of their activities in the financial year under review is made public within the Annual Report. These committees and their 2011 activities are summarised below:

The Chairman’s Committee—met five times in the 2011 financial year. Dealing with appointments to the Management Board and related issues and appointments to the Supervisory Board’s committees.

The Risk Committee—met six times in the 2011 financial year. The committee discussed in detail, inter alia, the Bank’s risk position and provisions for credit losses, its capital funding, the risk management systems and the effects on the Bank’s risk profile in light of the acquisition of Deutsche Postbank. The committee also covered macro-risks and the impact of regulatory change. Global industry portfolios were presented to the committee on a specified plan and discussed at length. The Bank’s exposures, which are subject to mandatory approval under German law and the Articles of Association, were also discussed in detail.

The Audit Committee—met six times in the 2011 financial year. Representatives of the Bank’s auditors attended all of these meetings. In addition to dealing in detail with the Bank’s financial statements the Committee looked into the system of internal controls, risk management and internal audit. The Committee had reports submitted to it on the work of Group Audit (presented by the Global Head of Group Audit), on issues relating to compliance, on legal and reputational risks, as well as on special investigations and significant findings of the regulatory authorities. Deutsche Bank shares trade in the United States and, as required under US law and by the Securities and Exchange Commission (SEC), Deutsche Bank reported in the Annual Report that all members of its Audit Committee were determined to be independent as defined by SEC rules and that three members of the Audit Committee were determined to be audit committee financial experts. In addition, neither the Chairman of the Supervisory Board nor any former members of the Management Board may chair the audit committee.

The Nominations Committee—met twice in the 2011 financial year and dealt with the succession issues on the Supervisory Board.

The Mediation Committee—this is a committee required by Germany’s Co-Determination Act if the two-thirds majority required to appoint or dismiss a Management Board member cannot be reached. It did not need to meet in 2011.

The chairmen of each of the above committees reported regularly to the full Supervisory Board. Participation by Supervisory Board members at the Supervisory Board and at its respective committees in 2011 was high with average attendance over 95%.

Interaction of the Supervisory Board with Compliance/Internal Audit

Compliance and Internal Audit are both scrutinised by the Audit sub-committee of the Supervisory Board and where appropriate the Risk Committee of the Supervisory Board.

Group Audit and Compliance provide regular reports to the Supervisory Board (quarterly and additionally on specific issues as required). The Global Head of Group Audit always attends the Supervisory Board’s Audit Committee meetings, as does the Management Board member responsible for Compliance or the Global Head of Compliance. Both the Global Head of Group Audit and the Global Head of Compliance meet periodically with the Chairman of the Supervisory Board.

Training and Support for Supervisory Board Members

All Supervisory Board members undertake ongoing training and further education to ensure that they are properly equipped to discharge their duties. As required under German law, the whole Supervisory Board is subject to regular effectiveness reviews. These are coordinated by the Supervisory Board secretariat and in order to encourage a free and frank exchange of views the results are not made public (this information is protected under German law).

The Annual Report sets out details of Supervisory Board training that has been undertaken. New members of the Supervisory Board are given orientation individually tailored to their levels of knowledge as well as detailed documentation, covering induction to the institution, their legal and governance responsibilities and, if needed, in financial and accounting matters. In addition, members of the Supervisory Board participate in external training courses. As set out in the section on the Audit Committee above, three members of that committee must be deemed to be audit committee financial experts.

Supervisory Board members may not be on either the Management or Supervisory Board of major competitors. If they are on the Management Board of a listed company, they are limited to three Supervisory Board mandates in addition to Deutsche Bank. This is to ensure that they have capacity to devote sufficient time and energy to what is a demanding job. Biographical details of all current Supervisory Board members are attached in Appendix 1 in order to provide a clear sense as to the range of their background and expertise.

2. Risk Governance and Management

The proper management of risk is at the core of Deutsche Bank’s business and considerable effort is devoted to ensuring a fully effective governance framework for risk management.

Deutsche Bank operates as an integrated group through its divisions, business units and infrastructure functions. The Management Board provides overall risk and capital management oversight for the consolidated group. The Supervisory Board monitors Deutsche Bank’s risk and capital profile. Risk management is an independent function within the Bank, with its own centralised governance structures. Deutsche Bank operates a three-line of defence risk management model whereby business management, risk management oversight and assurance roles are played by functions independent of one another. Our approach to risk management is subject to ongoing refinement and evolution. In common with other institutions, changes have been made post-crisis to give a renewed focus on risk but recognising the fact that our risk management framework helped us navigate through the financial crisis, these changes have been evolutionary rather than revolutionary.

Since 2008, Deutsche Bank, in common with many other banks, has proactively recalibrated its balance sheet as we recognised that this was in the best interests of shareholders. For example, in our investment bank, we have reduced balance sheet assets by a third from peak and at the same time have reduced the risk profile of the assets that we do hold. In addition we have closed our dedicated proprietary risk business. We have also increased the stability of our funding through increasing the value of long-dated and stable retail deposits. Deutsche Bank’s core tier 1 capital ratio was 10.2% at the end of the second quarter of 2012, well in excess of the 9% threshold set by the European Banking Authority. The Bank had liquidity reserves totalling EUR 200 billion at end June 2012, 60% of which was made up of cash and cash equivalents. This does not include any positions held by Deutsche Postbank.

Risk governance

In Deutsche Bank, risk and capital are managed via a framework of principles, organisational structures and measurement and monitoring processes that are closely aligned with the activities of the divisions and business units within the Bank. The Management Board is responsible for overall risk within the group and in German law every member is responsible for ensuring that there is effective infrastructure in place and that this infrastructure is appropriate to identify and manage the risks that that company may be taking. The Management Board fulfils this responsibility by defining and implementing comprehensive and aligned business and risk strategies for Deutsche Bank, as well as establishing well-defined risk management functions and guidelines to ensure that Deutsche Bank’s overall performance is aligned to its business and risk strategy.

The Management Board has delegated certain functions and responsibilities to relevant governance committees, in particular the Capital and Risk Committee (CaR) and Risk Executive Committee (Risk ExCo) to ensure effective oversight and management of key risks. The Supervisory Board as a whole, and its Risk Committee in particular (as set out above), are responsible for scrutinising the activities of the Management Board in this area and ensuring that it is compliant with these requirements. Since 2008, four new subcommittees to the Risk ExCo have been established to provide a better bank-wide view in specific areas: cross-risk review committee, a subcommittee to both the Risk ExCo and CaR Committees focused on enterprise-wide risk; an anti-financial crime governance committee; a group new product approval committee; and an audit findings closure committee, which monitors remediation of supervisory findings by the Bank’s regulators.

Figure 1

RISK MANAGEMENT STRUCTURE WITHIN DEUTSCHE BANK

The Chief Risk Officer (CRO), as a member of the Management Board, has a Group-wide, supra-divisional responsibility for the management and control of all credit, market and operational risks as well as for the further development of risk measurement methods. In addition, the CRO is responsible for monitoring and reporting risks on a comprehensive basis, including liquidity, asset and liability gap, capital, legal, compliance and regulatory risks.

The CRO reports directly into the co-Chairmen of the Management Board and as such is accountable to the Supervisory Board. As with the rest of the Management Board, the CRO’s compensation package is subject to approval by the Supervisory Board and non-binding approval by shareholders. In line with the rest of the risk management and internal control functions, the CRO’s variable remuneration is not directly dependent upon the performance of business lines. It is partly dependent on group performance and partly on performance against individual targets in line with the responsibilities outlined above.

Risk management governance is designed and embedded (see Figure 1, above) to ensure full oversight of day-to-day risk management across the organisation as well as clear monitoring and escalation to the Management Board of issues in which material deviation to plan are noted or at risk of occurring. The Management Board receive a presentation every month on the risk profile and its status at appropriate intervals. The reports must be clear and concise, and contain both a description and an assessment of the risk situation. Suggested actions, eg to reduce risk, are also to be included in the risk report where required.

All major risk classes are managed in a coordinated manner via risk management processes, including: credit risk, market risk, operational risk, liquidity risk, business risk, reputational risk, and risk concentrations. Where applicable, robust modelling and measurement approaches for quantifying risk and capital demand are implemented across these major risk classes. Effective systems, processes and policies are a critical component of the Bank’s risk management capability, and some of the governance processes on new products, transactions and reputational risk are outlined below, along with technological innovations used for early detection of potential risks.

Risk appetite and strategy

The Management Board is required to define a risk strategy consistent with the risk appetite of the firm, the business strategy that has been defined and the risks resulting from it.

Group Risk Appetite (GRA) is an expression of the maximum level of risk that Deutsche Bank is prepared to accept in order to deliver its business objectives. The Management Board reviews and approves the GRA annually to ensure that it is consistent with the group strategy, business environment and stakeholder requirements. To ensure that the group risk profile remains consistently aligned to the GRA, group-level triggers are set and monitored regularly through the risk management framework. Furthermore, the GRA translates the targets into risk limits and mitigating measures covering credit, market, operational and business risk including capital and liquidity constraints/needs. The setting of risk appetite thus ensures that risk and Deutsche Bank’s risk profile is proactively managed to the level desired by the Management Board and shareholders. The risk appetite tolerance levels are set at different trigger levels with clearly defined escalation and action schemes. Where these are breached, they are escalated through a pre-defined escalation path to the CRO and ultimately to the Management Board.

Risk strategy is defined based on the Group’s Strategic & Capital Plan and risk appetite in order to ensure full alignment of risk, capital, and performance targets. The risk strategy must include the risk control objectives with regard to our material business activities, divided into sub-strategies where appropriate (eg a strategy for counterparty risks) as well as measures to achieve these objectives. Risk tolerances must be defined for all material risks including taking risk concentrations. Risk concentrations must also be taken into account with regard to the earnings position of the institution (earnings concentrations).

An overview of the risk strategy of the Bank is included in the Annual Report (pages 42–128, 2011 Financial Report). It provides both quantitative and qualitative disclosures about credit, market and other risks and contains further explanation on how risks are managed.

Deutsche Bank’s risk statement is expressed as follows:

balanced performance across all business units;

positive development of earnings quality;

compliance with regulatory capital requirements;

capital adequacy; and

stable funding and strategic liquidity, allowing for business planning within the liquidity risk tolerance and regulatory requirements.

We conduct an annual strategic planning process which considers our future strategic direction, decisions on key initiatives and the allocation of resources to the businesses. Our plan comprises profit and loss, capital supply and capital demand, other resources, such as headcount and business specific key performance indicators. This process is performed at the business division and business unit level covering the next three years. The strategic plan is presented to the GEC and Management Board for discussion and approval and is presented to the Supervisory Board at the beginning of each year.

Our strategic plan includes the Risk and Capital Plan and risk appetite, allowing the Bank to:

set capital adequacy goals with respect to risk, considering our strategic focus and business plans;

assess our risk-bearing capacity with regard to internal and external requirements (ie regulatory and economic capital); and

apply stress testing to assess the impact on the capital demand, capital base and liquidity position.

Improving risk culture

In light the financial crisis we launched a Risk Culture Programme in 2010, in order to ensure that there is a clear focus on risk throughout the Bank. This initiative aims to enhance employees’ attitude to risk and their understanding of it—whether market, operational or reputational risks. The programme revolves around enhancing five “risk cultural behaviours”. Every member of staff is expected to:

Be fully responsible for Deutsche Bank’s risk;

Be rigorous, forward looking and comprehensive in the assessment of risk;

Invite, provide and respect challenge;

Troubleshoot collectively; and

Place Deutsche Bank and its reputation at the heart of all your decisions.

A Risk Culture Steering Committee has been formed to drive the Bank’s global risk culture initiatives, which includes, amongst other programs, a review of how risk-taking is considered when making individual compensation decisions. This connection has been reinforced via several media, one of which is a series of objective measures with respect to risk culture and risk taking activities which are measured and used at year end in the compensation and promotion process. This has been rolled out in parts of the investment bank and is in process of being extended to other divisions following its successful pilot implementation.

The risk culture programme is delivered through the following four workstreams:

Communications—clear and highly visible messages from senior management to all employees;

Training—consistent training covering all corporate titles, businesses, new joiners and people being promoted;

Accountability—strong link between expected behaviours and performance reviews/objective setting; and

Monitoring—“red flags” used to track breaches of policy—with a strong link to compensation and promotion process.

The importance of ensuring we have and maintain an appropriate culture inside the Bank is constantly emphasised by senior management in their communications with staff. In addition, risk reward reviews are conducted across divisions to ensure that sound risk management practices and a holistic awareness of risk exists across the organisation to help each business manage the balance between their risk appetite and reward.

Role of Compliance

Deutsche Bank has an independent group-wide Compliance function. The role of the Compliance Department includes:

advising on ethical conduct and identifying regulatory solutions;

safeguarding integrity and reputation; and

promoting, in partnership with the business, a culture of compliance.

As part of these general responsibilities, the role of Compliance includes the following core functions:

Advice and training.

Monitoring and surveillance.

Risk assessments and reporting.

Administering anti-money laundering and anti-corruption programmes.

Initiating and carrying out investigations.

Setting up and managing appropriate information barriers.

Engaging with regulators.

The Compliance function itself is visible to and proactively engages with the businesses it supports. It is also strictly independent of them. Individual business lines have no control over the budget of Compliance or compensation of compliance professionals.

In recent years, regulators have focussed on the increasing importance of Compliance’s role as a control function relative to its other responsibilities of advice and support for the business. This emphasis underscores the three lines of defence, whereby the businesses are the first line of defence, with their own governance, policies and procedures in place to demonstrate compliance with regulatory requirements. Compliance (alongside other control functions) is the second line of defence—providing oversight that the businesses have policies and procedures in place to comply with regulation. It also independently monitors the business by such means as trade and e-communications surveillance, transaction and business reviews and, where appropriate, more formal investigations. Group Audit is the third line of defence, providing independent assurance over internal controls and effectiveness of risk management and governance processes (see section below on Group Audit).

The Bank’s lead regulator, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleitstungsaufsicht or “BaFin”) has explicitly required this model in demonstrating compliance with MiFiD through its MaComp (“Minimum Requirements for ‘Compliance’”) circular, which sets out the role of Compliance as being to Advise, Monitor, Assess and Report on the Bank’s compliance. The detail required within MaComp is consistent with the approach of the European Securities and Markets Authority in its “Guidelines on certain aspects of MiFiD compliance function requirement”, published on 6 July 2012 and which is subject to a “comply or explain” provision for EU national regulators.

3. Audit

Internal Audit

Deutsche Bank Group Audit provides independent, objective assurance to stakeholders on the adequacy of the design and effectiveness of the systems of internal control in mitigating significant risk exposures, including fraud risks, and the effectiveness of risk management and governance processes. Group Audit plays an integral role in the achievement of the Bank’s strategic goals, objectives, ethical and environmental standards, as set by the Management Board.

As a function, Group Audit is required to prepare and execute a dynamic, risk-based audit plan, which is approved by the Management Board. Group Audit also undertakes audits that are mandated by regulatory authorities and will perform pre-implementation reviews and special investigations, where necessary. The activities of Group Audit cover all businesses and functions and processes of the Bank. Audit assignments will be undertaken in accordance with the respective Minimum Requirements (“MaRisk”) set by the BaFin, which are described in Group Audit’s Policies and Manual, as well as other existing key regulations and guidelines.

The scope and focus areas of the audit plan are determined through the application of Group Audit’s risk based methodology called the Methodology and Process Strategy (“MAPS”). Under MAPS, Group Audit has established what it terms the “Audit Universe” covering the whole Deutsche Bank Group across businesses and legal entities. On at least an annual basis, Group Audit performs risk assessments of the components of the Audit Universe in order to evaluate the inherent risks and the control environment. The risk assessment drives the level of audit coverage required and results in the annual audit plan which focuses priority on the higher risk areas. The entire Audit Universe is subject to audit ever year at some level of intensity. Changes in risk assessments within the annual audit cycle can lead to dynamic changes to the audit plan.

The organisation chart of Group Audit is attached below, highlighting structure and the reporting lines. In addition, as outlined in the Group Audit Charter, the Global Head of Group Audit also has the authority to communicate jointly and severally with the members of the Management Board, the Chairman of the Supervisory Board, and also communicates with the Chair of the Supervisory Board Audit Committee.

The Group Audit function headcount at Deutsche Bank (including the Internal Audit function of Deutsche Postbank) was 500 at the end of 2011. The level of resourcing is informed by Group Audit’s risk based planning methodology, added to additional audit work required to be performed for regulatory requirements. The adequacy of the resources for Group Audit is considered at the Group Audit Executive Committee and informally benchmarked to peer groups. In addition, the adequacy of Group Audit resources is discussed at the Management Board and Supervisory Board Audit Committee. The level of resources is also an area of interest for regulators.

The performance of the Group Audit function is formally assessed by the Supervisory Board Audit Committee on an annual basis. Areas of evidence used to support their assessment include:

Results from Group Audit’s Quality Assurance function;

External Quality Assurance reviews performed at least once every five years;

Results from regulatory and other external reviews perform on Group Audit;

Evaluation of quality and quantity of issues raised by Group Audit.

Group Audit’s total remuneration is not linked to business specific performance to ensure Group Audit staff independence and objectivity from the business.

Figure 2

GROUP AUDIT STRUCTURE

External audit

Deutsche Bank’s external auditors conduct the statutory annual audit of the consolidated financial statements and the Management Report, in line with the German Commercial Code (Handelsgesetzbuch or HGB). This is different from UK requirements and so it may be useful to outline the German requirements.

The external auditor is appointed by the shareholders at the Annual General Meeting, based on the recommendation of the Supervisory Board, prepared by its Audit Committee. The Audit Committee is responsible for monitoring the integrity of draft audit reports, the auditors’ independence and approving any services from that firm in addition to the statutory audit.

The external auditor produces both an auditors’ report, which is made public, and an additional long-form audit report. This long-form report goes into further detail on:

the fundamental findings of the audit;

the auditors’ analysis of the assessment of the state of affairs, future development and risks of the entity;

material accounting and disclosure decisions;

irregularities encountered; and

control weaknesses.

The long-form report is delivered to the BaFin and the Bundesbank and is submitted to the Supervisory Board to support their responsibility for monitoring the audit of annual financial statements. It is used as the basis for regular dialogue between the Audit Committee, the external and the internal auditors. The regulators use it as the basis for their regular, formal discussions with the Bank and its external auditor and to support their prudential audits.

Deutsche Bank’s group financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and endorsed by the EU and with the supplementary requirements of the German Commercial Code. We also prepare external reports in line with US Securities and Exchange Commission listing requirements. In order to ensure that the Bank’s interpretation of international accounting standards (IFRS, German HGB and US Generally Accepted Accounting Principles) is consistent, we have a global Accounting Policy and Advisory Group, which reports into the Chief Accounting Officer, a direct report of the CFO. This provides consulting and educational services to Finance and the business on products, trades and transactions and addresses grey accounting areas by review, escalation, if necessary, to the external auditors.

4. Shareholder Engagement

Deutsche Bank is governed by the German Stock Corporation Act and the German Corporate Governance Code and, under the terms of our share listing on the New York Stock Exchange (“NYSE”), the Bank is also subject in certain respects to U.S. capital market laws as well as the rules of the Securities and Exchange Commission and the NYSE itself. All of these requirements determine the timing and content of communications with shareholders.

Under the German dual board structure and co-determination laws, shareholders’ representatives make up half of the Supervisory Board and have the “casting vote” in the Chairman of the Supervisory Board. Employee representatives make up half of the Supervisory Board and are jointly responsible for ensuring that the Bank is effectively managed and that stakeholder interests wider than investors’ alone are take into account. Shareholder representatives are elected at the Annual General Meeting, while employee representatives are elected by German-based employees.

Deutsche Bank has only one class of shares, with each share carrying one voting right. This has the effect that every shareholder has the right to a voice at the Annual General Meeting, which results in a forum where they are encouraged to challenge and debate both general and specific issues. In terms of formal voting, our shareholders participate in decisions of material importance to the Bank, including amendments to the Articles of Association, the appropriation of profit, the authorisation to issue new shares and important structural changes. Moreover, shareholders are able to vote on a non-binding basis on the remuneration system for the Management Board. To make it easier for our shareholders to exercise their voting rights, we offer absentee voting and support the use of electronic media for the Annual General Meeting. For example, shareholders may issue authorisations and voting instructions to Deutsche Bank’s proxies through the Internet. We also provide a toll- free shareholder hotline for private shareholders throughout the year.

Deutsche Bank is regularly in touch with existing and potential institutional and private shareholders. Deutsche Bank’s Investor Relations department carries out an extensive communication programme which is adapted to the needs of our shareholder base (74% institutional/26% private). On roadshows, broker conferences or investor days, Deutsche Bank provides investors access to senior management.

In 2011, for example, in telephone conferences, we regularly reported on the development of the quarterly and annual Group results. The Bank conducted more than 400 individual or group discussions (2010: 398) with equity and debt investors, including at events such as roadshows and broker conferences, in which members of the Management Board participated. Furthermore, the Bank presented its two Group Divisions at the time—Corporate & Investment Bank (CIB) and Private Clients and Asset Management (PCAM) at two “investor days” held in London and Frankfurt. Senior managers answered questions at these events, which were broadcast in their entirety on the internet.

In 2011, the Bank also increased communications with investors who base their investment decisions on ecological, social and corporate governance issues. Again, in 2012, the Bank is carrying out an intense dialogue on corporate governance topics like compensation with its institutional investors. A particularly important round of investor meetings was held around the Deutsche Bank Investor Days on 11 and 12 September 2012 where the Management Board presented the results of its strategic review.

6. Remuneration Reforms and Staff Incentives

Deutsche Bank has consistently sought to ensure that our remuneration policies and practices create the right incentives to reinforce our strong risk management culture. At the end of the last financial year, the Bank made a number of changes in this regard, including a decision to significantly increase the number of employees subject to stringent requirements around deferrals and clawback on variable remuneration. These changes mean that we have levels of staff subject to these rules that are typically much higher than in other banks.

Further enhancements have already been announced ahead of this year’s pay round. For the Bank’s most senior employees (approximately 150) the decision has been taken to apply a five year deferral period to restricted equity awards. The awards will be subject to clawback conditions throughout that period and will vest in full at the end of that extended deferral period rather than on a pro rata basis. The Bank has chosen to take this approach in order to align better the variable compensation awarded to senior managers with the long term performance of the Bank and the individual. The decision is intended to be industry leading and goes significantly beyond the minimum standards prescribed in EU legislation. In line with international standards, the variable remuneration of risk management and internal control functions are set independently of the business lines they oversee. Instead, this is based on their divisional and individual objectives, adjusted for group performance.

This progress demonstrates very clearly the Bank’s desire to be at the forefront of cultural change in the industry. The Bank and its senior management recognise the need to ensure that pay levels are very clearly and demonstrably aligned to performance and the sustainable future of the business. Building on these developments, the Bank announced in September 2012 the creation of an external independent panel, chaired by Dr. Jürgen Hambrecht, former CEO of BASF, a German chemical company, with other members from industry and the public sector and input from academics and compensation experts. The objective of this group will be to benchmark the Bank’s compensation structures and practices against industry best practice and to formulate core principles to inform its pay structures in future. It will also advise on how the Bank can further increase its transparency around its approach to pay. The panel´s recommendations will influence compensation practices for 2012.

Behaviour and deferrals

Across the Corporate Banking and Securities (CB&S) division (and being rolled out across further divisions) the Bank has implemented a “red flag” system—a series of objective measures tied to risk management behaviours and responsibilities. These are designed to identify and record actions of individuals that fall short of required behaviour. These measures are monitored and are integrated into the decision making process with respect to compensation and promotion. Other disciplinary action may also be taken, depending on the severity or frequency of incidents, up to and including dismissal.

To ensure we identify and address inappropriate behaviour, we have put in place a framework which sees a significant proportion of compensation deferred. In 2011 59% of the total bonus pool was deferred. This group wide percentage is more wide-ranging than that set out in the third update to the Capital Requirements Directive (CRD III) in which 60% mandatory deferral is reserved for only a bank’s most senior employees of a bank.

The Bank also takes stronger steps in terms of its most senior staff. The Bank has more than 1,300 “Regulated Employees” (defined by CRD IIII and equivalent to the UK Financial Services Authority’s Code Staff) globally and more than 400 in the UK. Under the European CRD III regulations, a minimum deferral of 40%-60% is required for variable compensation awarded to Code Staff. In fact the Bank exceeds this and deferred in excess of 84% of the total variable awards made to Regulated Employees for FY 2011 globally.

Although not required under CRD III, the Bank also initiated a cash cap in relation to variable compensation awards. This limited the gross upfront cash payment to €100,000 for Regulated Employees globally.

As noted above, the GEC has recently decided that the deferral period of the equity element of compensation should change for senior management at Deutsche Bank. In future the deferral period for the equity award element of variable compensation will be extended from three years to four years six months plus six months retention, with a cliff vesting rather than tranches throughout that time. The service requirement will apply throughout the full five years of vesting and retention period and breach of policy clawback is being strengthened to 100% of all outstanding awards.

Clawback principles

Clawback policies are now a key part of Deutsche Bank’s existing remuneration framework. Although specific clawback provisions vary from year to year, these generally operate at a number of different levels:

Group clawback—This provision requires that Deutsche Bank’s Group NIBT (Net Income Before Income Taxes) remains positive as a performance condition for vesting the full value of the deferred awards granted in February 2012 in respect of FY 2011. If Group NIBT is negative for any year during the three year vesting period the performance condition will not be met and 100% of the REA and RIA tranches due to vest in respect of that year and granted to relevant employees will be forfeited.

Divisional clawback—This provision requires that Divisional NIBT is zero or greater. If NIBT for the employees’ division is negative during any year of the three year vesting period, the performance condition will not be met and 100% of the REA and RIA tranches due to vest in respect of that year will be forfeited by all relevant employees in the applicable Division.

Performance Forfeiture clawback (can apply to all staff, not just specified employees)—This puts an employee’s deferred cash award (50% of the deferred award) at risk into the future and allows the Bank to determine whether adjustments may be necessary based on actual outcomes. Up to 100% of an employee’s unvested award can be clawed back in the event that the Bank discovers that the original award value was inappropriate because a performance measure is later deemed to be materially inaccurate or if a deal, trade or transaction considered to be attributable to the employee has a significant adverse effect on the Bank, one of its divisions or the group.

7. Communicating Standards

Deutsche Bank’s Management Board has agreed a “Code of Business Conduct and Business Ethics” which sets out clearly the core values to which all employees must adhere. A full copy, dated 29 October 2012 when it was last revised and reissued, is attached. It includes the following core principles:

Trust—We behave reliably, fairly and honestly. We maintain the trust of our shareholders, clients, business partners, colleagues, and the communities in which we operate by keeping our commitments and acting with honesty and integrity in all of our business dealings.

Professionalism—We insist on the highest standard of professionalism and integrity in all of our business activities. We expect staff to refrain from any conduct that could be viewed unfavourably by our clients, employees, or the public at large.

Adherence to laws and regulations—All Deutsche Bank employees are expected to comply with the laws, rules, and regulations of the countries in which we operate. We have an ongoing commitment to maintain effective controls to help prevent and detect illegal and unethical business practices.

The roll-out of the revised Code is supported by an ongoing programme of training for all employees. Appropriate training specifically on risk culture has been delivered to a fifth of employees since the inception of the risk culture programme detailed above, for new and recent joiners to the Bank. This will be rolled out to newly promoted employees, from middle management upwards, from December 2012. Senior Management, from the Co-CEOs of Deutsche Bank down, set the tone from the top by emphasising the importance of the highest standards of integrity and ethical behaviour, including as part of the recent strategy review.

As noted above, compensation is a key way to ensure that standards feed through into incentive structures. Deutsche Bank goes beyond the minimum requirements to ensure that all senior staff and highly paid individuals are subject to deferrals and clawback, while the “red flag” system currently being rolled out across the Bank embeds consequences for inappropriate behaviour into the compensation and promotion process across a wider population.

Every staff member’s contract of employment makes clear that they are expected to comply with regulatory and legal requirements, observe the highest standards of integrity and fair dealing and make immediate disclosure where they suspect any wrongdoing. The adherence to high standards is a core Deutsche Bank requirement and failure to do so leads to disciplinary consequences.

In addition to this and the three lines of defence outlined above, Deutsche Bank’s approach to ensuring that standards of behaviour are embedded across the Bank is supported by robust structures to ensure clients are protected and reputational risk is managed. This is further supported by additional methods to improve detection, through technological innovations and robust whistleblowing policies and procedures.

Client protection

Deutsche Bank goes to great lengths to ensure financial innovations are appropriate for its client base, through a strong approvals process for new products and new transactions. In addition, on top of financial risk management as outlined above, we place a strong emphasis on addressing reputational risk, as this plays an important role for banks as whole as their overall business model is built on the trust of the public in the stability of the individual institution as well as the financial system as a whole.

The New Product and New Transaction and Reputation Risk framework at Deutsche Bank have been set up to ensure that the pace of growth and innovation is consistent with the pace of the Bank’s capacity to manage the associated risks. These processes support a culture of transparency and accountability. All staff are expected to challenge and escalate issues of concern to senior governance forums which provide holistic review and oversight of the process. Reputational, suitability, regulatory and other risks are evaluated as part of the process.

New Products and Transactions

The Group New Product Approval (NPA) policy provides a framework to manage the risks associated with financial innovation. Deutsche Bank has one of the widest definitions of new products amongst our peers, which covers:

new products (financial products, technological platforms), markets and services;

changes to new products during their life cycle;

changes to client jurisdiction and type eg introduction of product to retail clients;

Review is also required if:

a new legal entity, or different part of the Bank is offering an existing product; and

risk management strategies change eg change to hedging instruments.

Deutsche Bank maintains a dedicated NPA Risk Management team which reviews and escalates risk management issues around new products falling under this definition to the appropriate governance framework. The team is independent to ensure that there is no vested interest in the review of proposals. As such, it does not:

report into a business line;

offer co-ordination services to business or infrastructure functions; and

approve proposals.

Clearly assigned roles and responsibilities in the NPA process have been set up across the Bank. Business proposals are reviewed and challenged by the appropriate groups in risk management such as Legal, Compliance, Finance and operational support areas, before approval can be provided. This is supported by consistent coverage from regional management who provide in depth review of country/region specific issues. Escalation may be into different fora depending on the nature of the risks, including:

escalation within a specific risk function;

regional or group-wide business and risk function committees such as Regional NPA Operating Committees, Transaction Review forum; or

review by specialist forums for Algorithmic trading, or review of Reputation Risk, Retail committee, country specific forums by Regional Management.

The business division submitting the proposal must attest to its accuracy and evidence sponsorship. Business must accept all feedback provided by infrastructure functions and attest that conditions will be completed in the agreed timelines. If the business do not complete approval processes prior to the launch of a product/execution of trade, the Bank’s “red flag” process applies, where there are consequences for responsible individuals’ promotion and compensation (see section 6 for details).

The New Transaction Approval (NTA) framework provides heightened due diligence for “significant” non-vanilla transactions. This is a requirement even though the constituent products of a transaction have already been reviewed via NPA. Amongst peer banks, Deutsche Bank has one of the widest and most transparent definitions for transactions requiring due diligence via NTA process. All non-vanilla transactions above certain financial thresholds, eg greater than EUR three million P&L impact are deemed significant and hence must be approved via the formal process.

Reputational Risk Management (RRM)

In 2005, Deutsche Bank introduced a group-wide RRM Programme to ensure common standards for identifying, escalating and resolving reputational risks which may arise from new transactions and business events. Deutsche Bank defines the term Reputational Risk as “the threat that publicity concerning a transaction, counterparty or business practice involving a client will negatively impact the public’s trust in Deutsche Bank”.

Although reputational risk is only a small part of the prudential regulatory framework (part of the economic capital under Pillar 2 of Basel II) Deutsche Bank defines reputational risk in a group wide policy that applies to all staff. The primary responsibility for the identification and escalation of reputational risks arising from new products, markets and clients rests with the business divisions who are in direct contact with clients. They are supported in this through regular training and updates and by Deutsche Bank’s control groups (Legal, Compliance, Finance, Credit, Market and Operational Risk Management) and by Group Sustainability to ensure that reputational risks are adequately identified, addressed and escalated. If informal discussions between these groups and senior staff in the business division do not sufficiently address reputational risk, a formal meeting is convened, termed the “Business Review” and is the first level of the escalation hierarchy.

If the issue remains unresolved after the Business Review, it then must be escalated for further review and final determinations to the next escalation level, ie the “Regional/Divisional Review”. This involves one of eight Divisional and Regional Reputational Risk Management Committees which always include senior representatives of the control functions, the business divisions and regional management so that in the majority of cases a decision can be reached by these committees without the need for further escalation. Where issues cannot be resolved at this level, reputational risk issues can be escalated to the Group Reputational Risk Committee (GRRC), an official subcommittee of the Group Risk Executive Committee. The GRRC has two Management Board members as Chair and Deputy Chair, and compromises direct reports to other Management Board members.

Monitoring and detection

Deutsche Bank uses technological innovation to help monitor and detect risks and divergences from normal behaviours and limits. This helps to create an early warning system through several channels:

Behaviour monitoring technology—The Bank has an automated monitoring process for trading behaviours. 20+ controls are monitored via a technological solution in the investment bank as part of the supervisory process. Behaviours monitored include: mandatory time away, working hour behaviours and other high volume behavioural controls, which also include email monitoring where anomalies can be flagged and investigated rather than using manual sample processes to detect potential issues.

Enhancements to our Global Supervisory System—This acts as a reporting tool for supervisors around Key Risk indicators strengthening transparency, supervision and the control culture within the Bank. The system has been in place for several years but recent enhancements include: more timely data and clarity around team hierarchies for supervisors.

Improvements to ability to consolidate and review cross risk exposures—Improvements have been made in developing technology that can bring together diverse metrics to create a holistic view across key risk measures and metrics. Key metrics that can now be viewed group wide include organisation; credit risk counterparty concentrations, market risk asset level VaR (Value at Risk) analysis, liquidity and funding utilisation, regulatory risk and tracking of audit remediation activities.

In addition, the detection of departures from established standards of behaviour and risk-taking is supported by a whistleblowing mechanism. A hotline was established in 2009. This is a freephone number which employees globally can use to escalate issues or concerns relating to potentially unethical or inappropriate business practices. A link to the Bank’s intranet site was circulated to all employees explaining the procedure for making a complaint and attaching the policy. The policy provides direction and guidance to employees on the importance of reporting violations, or suspected violations, of the Code of Business Conduct and Ethics, and the related reporting mechanisms available.

Each call is documented and those that involve a workplace allegation are referred to designated contacts at Deutsche Bank. After the information is received the matter is investigated and, based on the results, appropriate action is taken. Deutsche Bank makes reasonable efforts to treat any disclosures on a strictly confidential basis. Retaliation of any kind against a whistleblower will not be tolerated.

Employees at the Bank’s general HR helpdesk are also trained in directing whistleblowing complaints to HR, Legal or Compliance, as appropriate. Employees may make a disclosure to an external body but usually to official bodies like the UK FSA or Health and Safety Executive in accordance with the provisions of the Public Interest Disclosure Act 1998 (“PIDA”). To clarify whether an external disclosure is appropriate, employees are directed to Public Concern at Work (a registered charity) which has a confidential helpline (020 7404 6609).

8. Ongoing Corporate Governance Developments

As described above, the overall framework for our corporate governance (board structure, board committees, shareholder disclosures etc) is closely controlled by both European and German legislation. Where there are changes in this binding legal framework the Bank will move quickly and comprehensively to ensure it is compliant with both the letter and spirit of the new rules.

Internal priorities

We believe that within that framework, our governance and risk management structures are effective and have served clients, employees and shareholders well. However, we also believe that there is continuous scope for improvement in the way in which risks are monitored and managed. There were important lessons that had to be learned from the financial crisis and we have continued to develop and improve our compliance and risk governance structures as a result (see above). In light of further issues that have come to light through the course of regulatory investigations into a number of banks this year, we will seek to learn further lessons and make yet more improvements.

The new management team at Deutsche Bank have made very clear already that aligning staff incentives with interests of clients and wider stakeholders will be a top priority. Significant announcements have already been made in this regard as outlined above. However an independent review group has been appointed to benchmark our remuneration approach against best practice in different sectors. The chairman of the panel will be Dr. Jürgen Hambrecht, former CEO of BASF, with other members from industry and the public sector, with input from academics and compensation experts (see Appendix 2 for the full list of panel members). Its objectives will include formulating core principles and minimum standards for future compensation structures and practices and assist the Bank to define future compensation transparency and disclosures. The panel´s recommendations will influence compensation practices for 2012. Our objective is to remain an industry leader in the Bank’s approach sustainable remuneration policies and we will prioritise measures required to ensure we retain that position.

Another priority for the Management Board and for all senior managers within the Bank will be reinforcing key messages around ethical and professional codes of conduct. Policies are only effective if they are regularly and effectively communicated, and making sure that there continues to be appropriate tone at the top will remain a priority for Deutsche Bank. Ethics and professional behaviour will form the back bone of senior management communications to staff through regular town halls and meetings across all business lines and geographies. These messages will be reinforced by the implementation of the new compensation structures outlined in section 6, through ongoing training and the annual appraisal process.

As you would expect, a further priority for the Bank will be to ensure that our compliance and risk monitoring procedures evolve to reflect any concerns raised by supervisors or via the internal audit process. It is not possible to tell whether there will be any specific points that need to be addressed during the course of the year, but robust processes are in place to ensure that gaps are identified, and the Management Board will prioritise any action required.

External developments

The German Corporate Governance Code was updated in 2010 and we do not expect it to be amended again in the immediate short term (attached for information). There were significant changes to European legislation affecting remuneration practices (introduction of stringent rules on deferral and clawbacks of variable pay), risk management and disclosure for banks, which were introduced under the third revision to the Capital Requirements Directive (CRD III) and which came into force in January 2011. We expect these to be further refined under CRD IV which is currently being negotiated at the European level and which is likely to be implemented (the corporate governance aspects at least) through the course of 2013.

A further important initiative which will be launched by the EU Commission early in 2013, will a new Corporate Governance Framework covering all listed companies in the EU. Details of this framework have not yet been made public but the Commissioner responsible, Michel Barnier, has given a clear indication that he expects the framework to include significant proposals to enhance to role of shareholders in setting executive pay. If agreed by member states and the European Parliament this could see a significant change to the way in which remuneration is agreed for listed companies in the EU.

30 November 2012

APPENDIX 1

MEMBERS OF THE DEUTSCHE BANK SUPERVISORY BOARD

Dr. Paul Achleitner (since 31 May 2012)

Chairman of the Supervisory Board of Deutsche Bank AG

Career

2000–12 Member of the Management Board, Allianz SE (formely Allianz AG)
1994–99 Chairman (and Partner, Goldman Sachs Group), Goldman Sachs & Co. OHG, Frankfurt
1989–94 Executive Director, Investment Banking, Goldman Sachs International, London
1988–89 Vice President, Mergers & Acquisitions, Goldman Sachs & Co., New York
1984–88 Manager, strategy consulting, Bain & Co., Boston

Education

Harvard Business School, ISP
First degree and doctorate for Business Administration, Economics, Law and Social Sciences, University of St. Gallen

Memberships in statutory supervisory boards in Germany

Bayer AG
Daimler AG
RWE AG

Memberships in comparable boards

Henkel AG & Co. KGaA (Member of the Shareholders’ Committee)

Karin Ruck*

Deputy Chairperson of the Supervisory Board of Deutsche Bank AG
Senior Adviser Regional Transformation, Region Frankfurt/Hesse-East, Deutsche Bank AG
Member of the Combined Staff Council Frankfurt branch of Deutsche Bank

Career

Since 2004 Chairperson of the National Executive Board of the German Association of Bank
Employees (DBV)—trade union of financial services providers
Since 1984 Deutsche Bank AG with a focus on Private and Business Clients and Staff
Development—current post: Senior Sales Coach

Education

Certified banker (“Bankfachwirt”)
Secondary school diploma

Memberships in statutory supervisory boards in Germany

BVV Versicherungsverein des Bankgewerbes a.G.
BVV Versorgungskasse des Bankgewerbes e.V.
BVV Pensionsfonds des Bankgewerbes AG

Wolfgang Böhr*

Chairman of the Combined Staff Council Dusseldorf of Deutsche Bank
Member of the General Staff Council of Deutsche Bank
Member of the Group Staff Council of Deutsche Bank

Career

since 1983 Deutsche Bank AG

Education

Banker

Memberships in statutory supervisory boards in Germany

None

Memberships in comparable boards

Member of the German Association of Bank Employees (DBV)

Dr. Karl-Gerhard Eick

Management Consultant KGE Asset Management & Consulting Ltd.

Career

since 2010 KGE Asset Management & Consulting Ltd.
2009 Chairman of the Management Board, Arcandor AG
2004–09 Deputy Chairman of the Management Board, Deutsche Telekom AG
2000–09 Member of the Management Board, Deutsche Telekom AG, Chief Financial Officer
1998–99 Member of the Management Board, Franz Haniel & Cie. GmbH
1993–98 Member of the Management Board, Gehe AG
1991–93 Head of the Central department of Controlling, Planning and EDP, Carl Zeiss Group
1989–91 Senior Manager of Controlling, WMF AG
1982–88 several positions for BMW AG

Education

1988 Doctorate in Business Administration, University of Augsburg

Memberships in statutory supervisory boards in Germany

CORPUS SIREO Holding GmbH & Co. KG (Chairman)

Katherine Garrett-Cox

Chief Executive Officer of Alliance Trust PLC

Career

since 2007 Group Chief Executive and Chief Investment Officer, Alliance Trust PLC
Chief Executive, Alliance Trust Asset Management
2004–07 Chief Investment Officer and Executive Officer, Morley Fund Management (Aviva Investors)
2000–03 Group Chief Investment Officer, Aberdeen Asset Management
Chief Executive, Aberdeen Asset Management Ltd. Executive Director of Aberdeen Asset Management PLC
1993–2000 Investment Director, Head of American Equities, Hill Samuel Asset Management
1990–93 Early career at Fidelity Investments and UNI Storebrand

Education

1986–1989 History BA (Hons)
University of Durham

Associate of the Institute of Investment Management and Research, CFA Institute

2008 Harvard Kennedy School of Government

“Leadership and Public Policy for the 21st Century”

Trustee of Baring Foundation
Fellow of the Thunderbird School of Global Management

Memberships in statutory supervisory boards in Germany

None

Memberships in comparable boards

Alliance Trust Savings Ltd., Director (Non Executive)

Alfred Herling*

Chairman of the Combined Staff Council Wuppertal/Sauerland of Deutsche Bank
Chairman of the General Staff Council of Deutsche Bank
Chairman of the Group Staff Council of Deutsche Bank

Career

since 1998 Exempted Staff Council member in Wuppertal
1992 Appointed as Authorized Signatory (Prokurist)
(Authorized Signatory rights withdrawn in 2006 due to Staff Council activities)
1990–91 Internal training as Organizational Manager
1986 Appointed as Chief Clerk
1969 Joined Deutsche Bank AG, Wuppertal branch

Education

1966–69 Wholesale and Foreign Trade Merchant
apprenticeship at Braubach & Plitt

Memberships in statutory supervisory boards in Germany

None

Prof. Dr. Henning Kagermann

President of acatech—German Academy of Science and Engineering

Career

1998–2009 Chairman, SAP AG
2008–09 Chairman, SAP AG, together with Leo Apotheker
2003–08 Chairman, SAP AG
1998–2003 Chairman, SAP AG, together with Hasso Plattner
1991–2009 Member of the Management Board, SAP AG
1982–91 Senior executive in software development, SAP AG

Education

1973–82 Assistant and senior assistant at the Institute for Theoretical Physics at Technische Universität Braunschweig
1985 Appointment as adjunct professor at Technische Universität Braunschweig
1980 Postdoctoral qualification in theoretical physics at Technische Universität Braunschweig
1975 Doctorate as Dr. rer. nat. in theoretical physics at Technische Universität Braunschweig
1972 Degree in Experimental Physics at Technische Universität Braunschweig
1966–72 Studied physics at Technische Universität Braunschweig and Ludwig-Maximilians-Universität Munich
1966 Secondary school diploma, Große Schule Wolfenbüttel

Martina Klee*

Chairperson of the Staff Council GTO Eschborn/Frankfurt of Deutsche Bank
Member of the General Staff Council of Deutsche Bank
Member of the Group Staff Council of Deutsche Bank

Career

since 2010 General Staff Council member, Group Staff Council member, European Staff Council member and Chairperson of the Economic Committee
since 2003 Chairperson of the GTO Staff Council Eschborn/Frankfurt
since 2001 Exempted Staff Council member, General Staff Council member and Economic Committee member
2000–01 Deutsche Bank, Quality Assurance
1992–2000 Deutsche Bank, Foreign Payments Fund Manager

Education

Business Administrator for Industry and Application Programmer
Studied Political Science and Romance Languages in Marburg, Kassel and Lyon

Memberships in statutory supervisory boards in Germany

Sterbekasse für die Angestellten der Deutschen Bank VVa.G.

Suzanne Labarge

Career

1999–2004 Vice Chairman & Chief Risk Officer, Royal Bank of Canada
1995–99 Executive Vice President (EVP), Corporate Treasury, Royal Bank of Canada
1987–94 Deputy Superintendent, Office of the Superintendent, Financial Institutions Canada
1985–87 Assistant Auditor, Financial Institutions Canada
1971–85 Royal Bank of Canada

Education

MBA, Harvard Business School
BA Economics, McMaster University

Memberships in statutory supervisory boards in Germany

None

Memberships in comparable boards

Coca-Cola Enterprises, Inc.
XL Group PLC (since October 2011)

Peter Löscher (since 31 May 2012)

Chairman of the Management Board of Siemens AG

Career

since 2007 Chairman of the Management Board, Siemens AG
2006 President of Global Human Health, Merck & Co., Inc.
2004 General Electric Company (GE)
President and CEO, GE Healthcare Bio-Sciences, GE Healthcare, UK —
Member of the Executive Board —
2002 Amersham PLC, UK (acquired by General Electric)
President Amersham Health and Member, Board of Directors, UK —
Chief Operating Officer and Member, Board of Directors, UK —
2000 Chairman, President and CEO, Aventis Pharma Ltd., Japan
1988 Various management positions in Spain, the USA, Germany, the UK and Japan, Hoechst Group (merged with Rhone Poulenc Rohrer)
1985 Senior Management Consultant, Kienbaum und Partner

Education

Harvard Business School, Advanced Management Program
MBA, Vienna University of Economics and Business
Studied economics at Vienna University of Economics and Business and at the Chinese
University of Hong Kong

Memberships in statutory supervisory boards in Germany

Münchener Rückversicherungs-Gesellschaft AG

Memberships in comparable boards

TBG Limited (Thyssen Bornemisza Group)

Henriette Mark*

Chairperson of the Combined Staff Council Munich and Southern Bavaria of Deutsche Bank
Member of the General Staff Council of Deutsche Bank
Member of the Group Staff Council of Deutsche Bank
Chairperson of the European Staff Council of Deutsche Bank

Career

since 2010 Chairperson of the European Staff Council of Deutsche Bank
since 2006 Member of the Group Staff Council and of the European Staff Council of Deutsche Bank
Chairperson of the European Staff Council of Deutsche Bank
since 1998 Chairperson of the Staff Council of the Munich branch and member of the General Staff Council of Deutsche Bank AG
1991 Private Asset Management, Generalia; Job rotation programme with Banca d’America e d’Italia in Rome (Deutsche Bank Group), Ufficio Titoli
1984 Transfer to Investments Department
1984 Joined Deutsche Bank AG Munich, Lending Department
1979 Joined Deutsche Bank AG, Coordination Group for Investments, Head Office Frankfurt
1978–79 Deutsche Buchhändlerschule
1977–78 Buchhandlung O. Harrassowitz, Wiesbaden
1974–77 Ganghofer’sche Buchhandlung, Ingolstadt

Education

1999–2001 University Programme in Mediation and Conflict Management
European General Mediator (EGM)
Master of Advanced Studies (Mediation) degree from the Institute of Interdisciplinary Studies of the Universities of Graz, Innsbruck, Klagenfurt and Vienna
1984–86 Studies in Communications Science, Spanish and Psycholinguistics, Ludwig Maximilians University Munich
Until 1974 Secondary schooling at Reuchlin-Gymnasium, Ingolstadt

Memberships in statutory supervisory boards in Germany

None

Gabriele Platscher*

Chairperson of the Combined Staff Council Braunschweig/Hildesheim of Deutsche Bank

Career

since 2002 Deutsche Bank Privat- und Geschäftskunden AG
1999–2002 Deutsche Bank 24 AG
1974–99 Deutsche Bank AG

Education

1982 Certified banker, Chamber of Commerce and Industry qualification (“Bankfachwirt”)
1974–77 Bank apprenticeship at Deutsche Bank AG

Memberships in statutory supervisory boards in Germany

BVV Versicherungsverein des Bankgewerbes a.G. (Deputy Chairperson)
BVV Versorgungskasse des Bankgewerbes e.V. (Deputy Chairperson)
BVV Pensionsfonds des Bankgewerbes AG (Deputy Chairperson)

Memberships in comparable boards

Verwaltungs-Berufsgenossenschaft (VGB) (Member of the Management Board)

Rudolf Stockem* (since 1 June 2012)

Trade Union Secretary to United Services Union (ver.di Vereinte Dienstleistungsgewerkschaft), Berlin and freelance Organisation and Communication Advisor

Career

since 2010 Trade Union Secretary to the Federal Executive Board, Department 1, Office of the Chairman
since 2001 United Services Union (ver.di Vereinte Dienstleistungsgewerkschaft)
Trade Union Secretary in the district of North Rhine-Westphalia, Federal State Department Management FB 1, Financial Services
1991–2001 Union of Retailing, Banking and Insurance Trade Union Secretary to the Federal Executive Board, National Executive Committee Banking Section
1979–91 Deutsche Bank AG, Aachen branch various positions

Education

1976–79 Studies in Mechanical Engineering, FH Aachen
1979–81 Bank apprenticeship at Deutsche Bank AG

Memberships in statutory supervisory boards in Germany

Generali Holding Deutschland AG
Deutsche Bank Privat- und Geschäftskunden AG

Dr. Johannes Teyssen

Chairman of the Management Board of E.ON AG

Career

since 2010 Chief Executive Officer, E.ON AG
2004–10 Member of the Management Board, E.ON AG
since 2008 Deputy Chairman of the Management Board, E.ON AG
2003–07 Chief Executive Officer, E.ON Energie AG
2001–03 Member of the Management Board in charge of Finance, E.ON Energie AG, (lead company within the E.ON Group for the electricity business in Central Europe)
1999–2001 Chief Executive Officer, AVACON AG (electricity and gas sales and distribution company, based in Lower Saxony, within the former VEBA Group)
1998–99 Member of the Management Board (in charge of Human Resources), HASTRA AG (electricity and gas sales and distribution company, based in Lower Saxony, within the former VEBA Group)
1994–98 Head of Legal Affairs (Regional Utilities), PreussenElektra (energy holding company within the former VEBA Group)
1991–94 Head of Energy and Corporate Law Department, PreussenElektra AG
1989 Joined PreussenElektra AG

Education

1986–89 Legal traineeship at the Higher Regional Court of Celle
(second state examination)
1984–86 Research associate at the Law Faculty of the University of Göttingen
(criminal law and law of criminal procedure as well as medical law)
1979–84 Studied Economics and law at the Universities of Freiburg, Göttingen and Boston (including doctoral studies)

Memberships in statutory supervisory boards in Germany

E.ON Energie AG
E.ON Ruhrgas AG
Salzgitter AG

Memberships in comparable boards

E.ON US Investments Corp. (Chairman)

Marlehn Thieme*

Director Infrastructure/Regional Management Communications Corporate Citizenship, Deutsche Bank AG

Career

since 2005 Corporate Citizenship Department, with responsibility for education, Deutsche Bank AG
2003–05 Private Wealth Management, Marketing and Communications
Deutsche Bank AG
2001–03 Private Banking, Estate and Foundation Management, Deutsche Bank AG
1995–2001 General Manager of the Deutsche Bank Foundation
1992–95 Human Resources Department, Head Office, Frankfurt, Management Development, Deutsche Bank AG
1988–92 Human Resources Department, Head Office, Frankfurt, Legal, Contractual and Policy Issues, Deutsche Bank AG
1986–8 Deutsche Bank Trainee Remscheid, Wuppertal, Milan

Education

1983–86 Law clerk at the Higher Regional Court (OLG) Hamburg, 2nd bar exam
1976–82 Studies in law and social sciences in Freiburg and Bonn
1982 1st bar exam at the Higher Regional Court (OLG) Düsseldorf

Memberships in statutory supervisory boards in Germany

None

Memberships in comparable boards

Member of ZDF Television Council
Tilman Todenhöfer
Managing Partner Robert Bosch Industrietreuhand KG

Career

since 2003 Managing Partner, Robert Bosch Industrietreuhand KG
since 1996 Partner, Robert Bosch Industrietreuhand KG
since 1996 Robert Bosch Industrietreuhand KG, Stuttgart KG
1999–2004 Deputy Chairman of the Board of Management, Robert Bosch GmbH
1993–2004 Member of the Board of Management and Labour Director, Robert Bosch GmbH
1992–93 Deputy Member of the Board of Management , Robert Bosch GmbH
1992–03 Member of the Management Board, Robert Bosch GmbH
1976–92 Law Firm Dr. Frühbeck, Madrid, Senior Partner (Spanish State Degree in Law), Special Representative of Robert Bosch GmbH in Spain
1974–75 Advisor for Foreign Affairs, Legal Department, Robert Bosch GmbH
1973–89 Parental Company, Tübingen (Germany): Managing Partner
1972–73 Walter Rose KG, Hagen (Germany): Head of Legal Department

Education

1979 Spanish State Degree in Law
1972 German State Degree in Law
1963–68 Studied law in Tübingen and Berlin

Memberships in statutory supervisory boards in Germany

Robert Bosch GmbH

Memberships in comparable boards

Robert Bosch Internationale Beteiligungen AG (President of the Board of Administration)

Prof. Dr. Klaus Rüdiger Trützschler (since 31 May 2012)

Career

2000–12 Member of the Management Board, Franz Haniel & Cie. GmbH, with varying responsibilities including Controlling, Financial Accounting, Tax, Finance, Audit, Legal, and General Administration
1997–2000 Commercial Member of the Management Board, RAG
1977–2000 positions inside RAG Group:
Clerk in Group Accounting —
Assistant of the Commercial Member of the Management Board —
Head of Group Accounting and Deputy Head of Financial Accounting —
Head of Financial Accounting —
1995 Chief Representative and Head of Corporate Development, RAG Aktiengesellschaft
1992–95 Shift to RAG-Subsidiary Company Rütgerswerke AG with the positions:
Chief Representative and in personal union —
Commercial Member of the Management Board, Bakelite AG —
Member of the Management Board, Rütgerswerke AG —
1967–69 Armed Forces, Basic Military Training, Reserve Officer Cadet

Education

2008 appointed Honorary Professor
2003 Teaching at Westfälische Wilhelms-Universität Münster (Subsidiary Controlling)
1984 Doctorate in Political Science (Dr. rer. pol.), extra occupational, at Technische
Universität Munich
1974–76 Work Science and Economy postgratuate studies at Rheinisch-Westfälische
Technische Hochschule Aachen and at Technische Universität Munich
University degree in Business Mathematics
1969–74 studies of Mathematics in Würzburg, Freiburg and Bonn
University degree in Mathematics

Memberships in statutory supervisory boards in Germany

Bilfinger Berger SE
Sartorius AG

Wuppermann AG (Chairman)
Zwiesel Kristallglas AG (Chairman)

Memberships in comparable boards

Wilh. Werhahn KG

Stefan Viertel*

Head of Cash Management Financial Institutions Austria and Hungary, Senior Sales Manager, Deutsche Bank AG

Career

Since 2006 Deutsche Bank AG, CIB, GTB (Head Office) Cash Management Financial Institutions, Central Europe Head of CMFI Austria & Hungary
2003–05 Deutsche Bank AG, CIB, GTB (Head Office) Cash Management Financial Institutions, Central Europe Sales Manager CMFI Germany, Luxembourg & Vienna
1997–2003 Deutsche Bank AG, Global Corporate and Institutions (Head Office) Global Cash Management
Accounts Payables — & Receivables, Product & Sales Manager
Value Added Services, Product — & Sales Manager
Card Systems — & Sales POS, Product & Sales Manager
1992–96 Deutsche Bank AG, Organization & IT Operations (Head Office)
Electronic Financial Services, Card Systems — & POS, Product & Project Manager Payments/Electronic Banking
Investment Banking Systems, Project Manager —
Small Systems, Electronic Banking Installation, Project — & IT Manager
1990–92 Deutsche Bank AG, Organization & Operations (Berlin, NBL) Deutsche Bank Kreditbank AG, Deutsche Bank Berlin
Project & IT Manager, Installation & Configuration Electronic Banking, Informatic & Asset Management centers, Trading rooms, staff training in the DB training center Bodensee
1989–90 Deutsche Bank AG, IT Organization (Head Office) Domestic Branch Systems, Project & IT Manager
1985–86 Armed Forces, Basic military training, Heeresamt, Konrad-Adenauer-Kaserne
1985 Dental Laboratory Technician, Member of the Dentist Professional Guild

Education

1988–89 Control Data Institute, apprenticeship and training as an IT & computing businessman
Internship Tenneco group/JI Case Vibromax
1986–87 Industry-data processing association Ltd., IT, Design & Development basic education & training
1981–85 Professional Technical College, Dental Laboratory Technology Preuß, apprenticeship as Dental Laboratory Technician
1975–81 Secondary school

Memberships in statutory supervisory boards in Germany

None

Renate Voigt*

Chairman of the Combined Staff Council Stuttgart/Esslingen/Heilbronn of Deutsche Bank

Career

since 2002 Exempted Staff Council member in Stuttgart
1991–2002 Compliance Office Southwest
1973–90 Internal Audit, Securities

Education

1970–73 Bank apprenticeship at Deutsche Bank AG

Memberships in statutory supervisory boards in Germany

None

Werner Wenning

Chairman of the Supervisory Board of E.ON AG
Chairman of the Supervisory Board of Bayer AG since October 1, 2012

Career

2002–10 Chairman of the Management Board/CEO, Bayer AG
1997–2002 Member of the Management Board/CFO, Bayer AG
1966 Joined Bayer AG

Education

Commercial Trainee

Memberships in statutory supervisory boards in Germany

E.ON AG
Talanx AG
HDI V.a.G.

Memberships in comparable boards

Henkel AG & Co. KGaA (Member of the Shareholders’ Committee) Freudenberg & Co. KG (Member of the Shareholders’ Committee)
*Elected by the employees in Germany; except for Renate Voigt who was appointed by court as employee representative.

APPENDIX 2

MEMBERS OF THE COMPENSATION PANEL

Deutsche Bank on 25 October announced the membership of an independent external panel to review the structure and governance of its compensation practices. The chairman of the panel will be Dr. Jürgen Hambrecht, former CEO of BASF.

Other panel members will include:

Michael Dobson, CEO of Schroders;

Morris W. Offit, Chairman of Offit Capital and Independent Director of AIG;

Dr. Michael Otto, Chairman of the Supervisory Board of Otto Group; and

Dr. Theo Waigel, former Federal Minister of Finance for Germany.

As announced in September the panel´s objectives include benchmarking the Bank´s compensation systems against industry best practice and against current and intended regulatory requirements; formulating core principles and minimum standards for future compensation structures and practices; and assisting the Bank in defining appropriate levels of transparency and disclosure in relation to compensation.

The panel’s recommendations will influence compensation practices for 2012. The panel will seek input from academics and compensation experts and will hold its inaugural meeting in due course.

Jürgen Fitschen and Anshu Jain, Co-Chairmen of the Management Board and the Group Executive Committee at Deutsche Bank, said: “We are pleased that distinguished individuals from industry, finance and the public sector have agreed to join together to review our compensation practices. This panel and its work constitute a vital part of our commitment to place Deutsche Bank at the forefront of cultural change in our industry. We look forward to working with them.”

Information on Panel Members

Dr. Jürgen Hambrecht started his career at BASF in 1976 and was appointed a member of their Management Board in 1997, at that time located in Asia. In 2003 he became the CEO of the company until his retirement in May 2011. Currently Dr. Hambrecht is the Chairman of the Supervisory Board at Fuchs Petrolub AG and holds further Supervisory Board mandates at Daimler AG, Lufthansa AG and Trumpf GmbH + Co. KG. Dr. Hambrecht was named German Manager of the Year in 2005.

Michael Dobson joined the Board of Schroders as a Non-Executive Director in April 2001 and became Chief Executive in November of that year. He was previously Chief Executive of Morgan Grenfell Group and a Member of the Board of Managing Directors of Deutsche Bank AG. He was a Member of the Advisory Committee of the staff retirement plan of the International Monetary Fund from 2004 until October 2012.

Morris W. Offit is the Chairman of Offit Capital Advisors LLC, a wealth management advisory firm, and served as the Co-Chief Executive Officer of Offit Hall Capital Management LLC from 2002 to 2007. Until 2001 he served as Chief Executive Officer of Offitbank, which he founded in 1990. Prior to that, he was President of Julius Baer Securities, a General Partner at Salomon Brothers, an adjunct professor at Columbia Business School and Head of Stock Research at Mercantile Safe Deposit and Trust Co. Mr. Offit is also a Senior Independent Director of the Board of American International Group (AIG), which he first joined in 2005.

Dr. Michael Otto is Chairman of the Supervisory Board of the Hamburg-based retail and services group, Otto GmbH & Co KG. Between 1981 and 2007, he served as Chairman and Chief Executive Officer of the Otto Group. Before joining the Group in 1971 as a Member of the Executive Board, Michael Otto studied economics, taking a doctorate in the subject. Dr.Otto is also a member of the supervisory board of Axel Springer Verlag AG and a partner in Robert Bosch Industrietreuhand KG, Stuttgart.

Dr. Theo Waigel was a member of the German Bundestag from 1972 to 2002 and served as Federal Minister of Finance in the Cabinet of Chancellor Helmut Kohl from 1989 to 1998. From 1998 to 1999 he was Chairman of the Christian Social Union (CSU). Theo Waigel studied law and political science at the Universities of Munich and Würzburg, before obtaining his PhD degree in 1967. Today, he works as a lawyer at the law firm GSK Stockmann & Kollegen in Munich.

Prepared 24th June 2013