Statement

Update: March 2012

All information on corporate governance contained in this statement reflects the situation as it stands on February 22, 2012.

Declaration of Compliance pursuant to section 161 of the German Stock Corporation Act (AktG)
The Management Board and Supervisory Board announced on January 27, 2012 that the recommendations of the government commission's German Corporate Governance Code (the German Corporate Governance Code dated May 26, 2010) as published by the German Ministry of Justice in the official section of the electronic version of the Federal Gazette were fully complied with in fiscal year 2011. The Supervisory Board and Management Board intend to continue to follow the code in fiscal year 2012. The Declaration of Compliance can be found on the Internet at: http://www.softwareag.com/corporate/inv_rel/corpgovernance/declaration/.

Relevant information on corporate governance practices
Based on the conviction that sustainability and business success are directly related, Software AG developed six Corporate Social Responsibility criteria. They incorporate all areas of management and lay the foundation for Software AG’s business activities.

Software AG considers to be important that the Company be led not only in full compliance with the relevant legal guidelines, but also with respect for general and regional ethical norms. Software AG therefore established a Code of Business Conduct and Ethics Policy that is binding for all employees and managers. A Compliance Board was created in the year under review to monitor compliance with the regulations and lend support for making the right decision in difficult cases.

For more information, please download the Code of Business Conduct and Ethics Policy here.

Working method of the Management Board and Supervisory Board
As a German listed stock corporation, Software AG’s management is dictated first and foremost by the German Stock Corporation Act and the recommendations of the German Corporate Governance Code. A founding principle of the German Stock Corporation Act is the principle of dual management whereby the Management Board and Supervisory Board are two strictly separate entities and are equipped with their own autonomous powers. Software AG’s Management Board and Supervisory Board control and monitor the Company in a cooperative and trusting manner.

The Management Board leads the Company with the goal of sustainable value creation. The members of the Board share responsibility for management of the Company. The guidelines for the work of Software AG’s Management Board are elaborated in the Rules of Procedure of the Management Board. Above all, they define the members’ individual responsibilities, the tasks assigned to the Board as a whole, adoption of resolutions and the rights and obligations of the Chief Executive Officer. The Management Board of Software AG currently consists of 3 members: Karl-Heinz Streibich, Arnd Zinnhardt and Dr. Wolfram Jost. The Supervisory Board dismissed David Broadbent from the Management Board with immediate effect as of July 18, 2011.

The Group Executive Board has established itself as an extension of management and enables the Management Board to implement the corporate strategy throughout the entire Company by direct or collaborative channels. The following people left the extended management team in fiscal year 2011: David Broadbent due to his dismissal from the Management Board as of July 18, 2011 and Dr. Hans Kraus as of July 22, 2011. Darren Roos and Jonathan Smith joined it as of August 1, 2011. At the end of the year under review, the Group Executive Board consisted of eight members, including the members of the Management Board and Mark Edwards, Kamyar Niroumand, Darren Roos, Johnathan Smith and Ivo Totev.

For more detailed information on the members of the Group Executive Board and their specific areas of responsibility, please visit: http://www.softwareag.com/corporate/company/people/geb/default.asp

The Supervisory Board advises and supervises the Management Board in leading the Company. The Supervisory Board is involved in the strategy and planning as well as in all issues of fundamental significance to the Company. The Rules of Procedure of the Management Board require prior approval by the Supervisory Board on important business transactions. The Chairman of the Supervisory Board coordinates the work of the Supervisory Board, chairs its meetings, and represents the Supervisory Board externally.

The Supervisory Board, which has been constituted based on parity since the Annual Shareholders’ Meeting on May 21, 2010, continued under the chairmanship of Dr. Andreas Bereczky in the year under review. It consisted of of six shareholder representatives (Dr. Andreas Bereczky, Prof. Willi Berchtold, Heinz Otto Geidt, Prof. Hermann Requardt, Anke Schäferkordt and Alf Henryk Wulf) and six employee representatives (Dietlind Hartenstein, Peter Gallner, Monika Neumann, Manfred Otto [until Nov. 3, 2011], Roland Schley, Martin Sperber-Tertsunen and Karl Wagner [since Nov. 3, 2011]).

The guidelines for the work of the Supervisory Board of Software AG are described in the Rules of Procedure of the Supervisory Board. In addition to the duties and powers of the Chairman of the Supervisory Board, they define the structure of meetings, the adoption of resolutions and the formation of committees. In order to efficiently carry out its duties, the Supervisory Board has four committees in addition to the mandatory Mediation Committee in accordance with the Codetermination Act.

The Committee for Compensation and Succession Issues prepares personnel-related decisions made by the Supervisory Board to the extent that they affect the appointment, reappointment or dismissal of the members of the Management Board. It has four members. The Audit Committee deals with issues related to financial reporting, financial auditing and risk management. The Strategy Committee deals with the preparation of and success monitoring of acquisitions, partnerships and joint ventures. Both committees each have six members. The Nominating Committee nominates qualified candidates for election to the Supervisory Board by the Annual General Meeting. It consists of three shareholder representatives. With the exception of the Nominating Committee, all other committees are composed based on parity.

The members of the Supervisory Board evaluate the efficiency of their work annually. Members complete a questionnaire to assess all areas of the Supervisory Board's work. They discuss the results of the annual efficiency audit in detail and, if necessary, agree on measures to increase efficiency.

For more detailed information on the Supervisory Board’s work and resolutions, please refer to the most recent Report of the Supervisory Board in the Annual Report 2011. For more detailed information on the members of the Supervisory Board and their committee membership, please visit: http://www.softwareag.com/corporate/company/people/svb/default.asp.