Deutsche Telekom : Corporate Governance Statement in accordance with §§ 289f and 315d of the german commercial code (HGB). (pdf, 136.6 KB)

Corporate Governance Statement in accordance with §§ 289f and 315d of the German Commercial Code

Sound, systematic corporate governance is particularly important for an international group such as Deutsche Telekom with its many subsidiaries and associates. The Company complies with national provisions such as the recommendations of the Government Commission on the German Corporate Governance Code, as well as with international standards. The Supervisory Board and the Board of Management of Deutsche Telekom AG are convinced that sound corporate governance, taking company- and industry-specific issues into account, is an important building block for the future success of Deutsche Telekom AG. Accordingly, responsibility for compliance with the principles of sound corporate governance is vested in senior management.

In the 2020 financial year, the Board of Management and Supervisory Board once again carefully examined the corporate governance of Deutsche Telekom AG and the Deutsche Telekom Group as well as the contents of the German Corporate Governance Code. During the reporting period just ended, Deutsche Telekom AG again fulfilled all of the Code's recommendations. The Supervisory Board and Board of Management of Deutsche Telekom AG therefore issued an unqualified Declaration of Conformity with the German Corporate Governance Code on December 30, 2020.

Declaration of Conformity pursuant to § 161 of the German Stock Corporation Act

• I. The Board of Management and Supervisory Board of Deutsche Telekom AG hereby declare that, in the period since the issuance of the most recent declaration of conformity pursuant to § 161 Stock Corporation Act (Aktiengesetz - AktG) on December 30, 2019, Deutsche Telekom AG has complied with the recommendations of the Government Commission on the German Corporate Governance Code announced by the Federal Ministry of Justice and Consumer Protection on April 24, 2017, in the official section of the Federal Gazette (Bundesanzeiger), without exception.

• II. The Board of Management and Supervisory Board of Deutsche Telekom AG hereby declare further that Deutsche Telekom AG has complied with the recommendations of the Government Commission on the German Corporate Governance Code, published by the Federal Ministry of Justice and Consumer Protection in the official section of the Federal Gazette (Bundesanzeiger) on March 20, 2020, without exception.

| This Declaration of Conformity can be found on Deutsche Telekom AG's website:https://www.telekom.com/en/investor-relations/investor-relations/declaration-of-conformity-pursuant-to-161-479770. It also provides access to the declarations of conformity from previous years.

Corporate governance practices beyond statutory requirements

Compliance and internal Group rules

Compliance involves the observance of legal requirements and internal Group rules. There is also a Compliance Committee that supports the Board of Management in establishing, maintaining, and monitoring the framework for an effective compliance program. The members of the Compliance Committee are experienced managers in the areas of compliance, legal affairs, security, internal auditing, and human resources. The Chief Compliance Officer, appointed by the Board of Management, chairs the Compliance Committee. A compliance officer has been appointed for each of the operating segments. Individual business units have additional compliance officers/contacts depending on their respective size and risk situation. Clear reporting structures have been implemented throughout the Group. The particular significance attached to compliance is underlined by the decision to pool all compliance activities in the Board of Management department for Human Resources and Legal Affairs.

Deutsche Telekom AG has implemented a comprehensive compliance management system. According to this system, a compliance program is set up based on a structured risk assessment process performed once a year throughout the Group.

The compliance management system also includes the Code of Conduct, the Code of Ethics, and various policies. The Code of Conduct defines how employees and management should practice value-based and legally compliant conduct in their daily business activities. The Code of Ethics addresses the members of the Board of Management of Deutsche Telekom AG and persons within the Group who carry special responsibility for financial reporting. It obliges these individuals to comply with the principles of honesty, integrity, transparency, and ethical conduct. The compliance management system in place at Deutsche Telekom AG and other selected national and international companies was certified as being appropriate and effectively implemented by an external auditor in stages from 2016 through 2018 in accordance with IDW assurance standard 980 with the focus on anti-corruption. In 2020, Deutsche Telekom AG, alongside a number of Group entities in Germany selected on a risk-oriented basis, successfully underwent re-certification in accordance with this standard. A number of international entities will continue to be reviewed in 2021.

| For further information on the compliance management system, the Code of Conduct, and the Code of Ethics, please refer to the Deutsche Telekom AG website:www.telekom.com/en/company/compliance.

Guiding Principles

Culture is part of the corporate DNA and, as such, influences not only the ways of working, but also the success of a company. Deutsche Telekom AG has therefore introduced a set of Guiding Principles, which were revised in 2020. They allow us to reflect on our behavior on a daily basis and act as an indicator of our culture.

| For further information on the Guiding Principles, please refer to the section "Employees" in the 2020 Annual Report or to the Deutsche Telekom AG website athttps://www.telekom.com/en/company/details/the-company-values-of-telekom-355188.

Working methods of the Board of Management and the Supervisory Board as well as composition and working methods of committees Cooperation between the Board of Management and the Supervisory Board

The Board of Management and the Supervisory Board work closely together for the good of the Company and maintain regular contact. The Board of Management agrees the Company's strategic alignment with the Supervisory Board and discusses the status of strategy implementation with the Supervisory Board at regular intervals. The Supervisory Board of Deutsche Telekom AG holds a minimum of four meetings a year. In the 2020 financial year, there were twelve Supervisory Board meetings and a one-day off-site conference on the strategic alignment of the Company. In the lead-up to the Supervisory Board meetings, separate preparatory meetings of the shareholders' and employees' representatives are held on a regular basis. The Supervisory Board also convenes meetings without the Board of Management in attendance as and when it deems necessary. Every member of theSupervisory Board is required to declare any conflicts of interest to the Supervisory Board. Should a conflict of interest arise, the Supervisory Board includes this information along with any action taken in its report.

| For further information on conflicts of interest, please refer to the section "Supervisory Board's report to the 2021 shareholders' meeting" in the 2020 Annual Report on the Deutsche Telekom AG website:https://www.telekom.com/en/investor-relations/management-and-corporate-governance.

In addition, 34 Supervisory Board committee meetings were held. The Board of Management keeps the Supervisory Board fully and regularly informed in good time, in particular of corporate strategy, planning, business development, the risk situation, risk management, compliance, innovation focuses, and any deviations in the business developments from original plans, as well as significant business transactions involving the Company and major Group companies. The Board of Management regularly submits written and oral reports. Between meetings, the Board of Management also informs the Supervisory Board of the current business development of the Group and its segments on a monthly basis. The Board of Management reports to the Supervisory Board on individual issues in writing or in discussions. The reporting obligations of the Board of Management specified by the Supervisory Board go beyond statutory requirements. The activities of the Board of Management and the Supervisory Board, as well as the Audit Committee of the Supervisory Board, are specified in separate Rules of Procedure. Those that govern the Board of Management stipulate, in particular, the schedule of responsibilities and the majorities required for resolutions. The Chairs of the two Boards also exchange information regularly in person.

| For further information on cooperation between the Board of Management and the Supervisory Board, please refer to the section "Supervisory Board's report to the 2021 shareholders' meeting" in the 2020 Annual Report and on the Deutsche Telekom AG website:https://www.telekom.com/en/investor-relations/management-and-corporate-governance.This is where you can also find the current Rules of Procedure of the executive bodies.

Working methods and schedule of responsibilities of the Board of Management

The Board of Management normally meets on a weekly basis. As a rule, its resolutions are adopted by simple majority and within the scope of its meetings. Effective January 1, 2020, the individual units of the Data Privacy, Legal Affairs and Compliance Board of Management department were reassigned to the Finance, Technology and Innovation, and Human Resources Board of Management departments. The former Human Resources Board of Management department continues to operate as a Board of Management department under the new designation Human Resources and Legal Affairs. Effective April 1, 2020, the Data Privacy, Legal Affairs and Compliance Board of Management department was dissolved. As of April 1, 2020, the Board of Management's schedule of responsibilities states that there are eight Board of Management departments instead of nine: the department of the Chairman of the Board of Management; Finance; Human Resources and Legal Affairs; T-Systems; Germany; Technology and Innovation; Europe; and USA and Group Development. The members of the Board of Management jointly bear responsibility for the management of the entire Company. They work together in a cooperative manner and continually inform one another of important measures and activities in their departments.

Irrespective of the joint responsibility of all members of the Board of Management, each individual member of the Board of Management is authorized to manage the spheres of responsibility allocated to them. Certain matters, particularly those where the law requires the involvement of the entire Board of Management, are subject to approval by the full Board of Management. Furthermore, every Board of Management member can submit matters to the full Board of Management for decision.

Composition and working methods of Board of Management committees

To further the efficient performance of its duties, the Board of Management has established two permanent committees that include people who are not members of the Board of Management. These committees do not have the authority to take decisions that are by law matters to be dealt with by the Board of Management.

The Asset Committee advises the Board of Management of Deutsche Telekom AG on matters concerning the economically and strategically optimum allocation of resources, on investment projects, and on measures with key economic significance.

The Mergers and Acquisitions (M&A) Committee takes decisions on the implementation of certain M&A transactions that are below defined value thresholds and monitors integration after the completion of transactions.

Board of Management committees

Committee

Members

Asset CommitteeCommittee M&A Committee

Members

Member of the Board of Management, Finance (committee chair)

Chairman of the Board of Management (committee chair)

Member of the Board of Management, Technology and Innovation

Member of the Board of Management, Finance

Chief Operating Officer

Member of the Board of Management, Human Resources and Legal AffairsChief Information Officer

Senior Vice President, Group Controlling Senior Vice President, Group Strategy Senior Vice President, Group Procurement Financial Directors of the segments Germany, Europe, and GHS-IT

Senior Vice President, Mergers & Acquisitions Senior Vice President, Group Strategy

Chief Technology Officer, Germany

Senior Vice President, Consumers, Germany Senior Vice President, Technology (NT/IT), EU Senior Vice President, Commercial, Europe

| For the current composition of the Board of Management committees, please refer to the Deutsche Telekom AG website:https://www.telekom.com/en/investor-relations/management-and-corporate-governance.

Working methods of the Supervisory Board

The Supervisory Board appoints the members of the Board of Management and regularly supervises its management of the Company. The Supervisory Board is directly involved in all decisions of strategic importance to the Company. This involvement is guaranteed through the specification of approval provisos for the Supervisory Board and through the agreement of the strategic alignment of the Company. The work of the Supervisory Board is specified in Rules of Procedure. To clarify the reporting obligations on the part of the Board of Management, the Supervisory Board has drawn up a list oftransactions subject to approval. This list forms an integral part of the Rules of Procedure for the Supervisory Board and the Board of Management, respectively.

| For the current Rules of Procedure, please refer to the Deutsche Telekom AG website:https://www.telekom.com/en/investor-relations/management-and-corporate-governance.

The Supervisory Board and Audit Committee each assess the efficiency of their work every two years, to regularly assess how effectively the full Supervisory Board and its committees fulfill their mandates, and to provide fresh impetus for the Supervisory Board's work. The internal self-assessment carried out to this end is based on a comprehensive questionnaire followed by intense discussion and consultation on the results by the entire Supervisory Board and the Audit Committee. The questionnaire covers aspects that have a material effect on the Supervisory Board's performance of its duties, such as key agenda topics, culture, the flow of information, committee structure, the Supervisory Board Chairman's leadership, the quality of consultations and strategic discussions, as well as the working relationship between the Supervisory Board and the Board of Management. The evaluation of the questionnaire provides a detailed self-assessment from which action areas can be derived. The Supervisory Board carried out its last efficiency assessment in the 2019 financial year. As well as the work of the Supervisory Board as a whole, it also considered the work of all of the Board's committees. A further, separate assessment of the Audit Committee was carried out most recently in the 2020 financial.

The members of the Supervisory Board take on the necessary training and development measures required for their tasks on their own and are supported by Deutsche Telekom AG in doing so with a range of options including information events and workshops - in 2020 with a special focus on the Board of Management compensation system, the risk management system, and financial instruments - with internal and external experts. They inform themselves and undergo continued training on current topics such as cybersecurity and sustainability both within and outside of the Supervisory Board's meetings.

The Chairman of the Supervisory Board coordinates the work of the Supervisory Board and presides over its meetings. In addition to the organizational tasks relating to the Supervisory Board, he maintains regular contact with the Chairman of the Board of Management and the members of the Board of Management as a whole to discuss issues relating to the Company's strategy, planning, business development, the risk situation, the risk management system, and compliance, and is informed of the general business situation and significant events. In this context, the Chairman of the Board of Management in particular informs the Chairman of the Supervisory Board of all events that are significant to the situation, development, and governance of the Company.

Composition and working methods of the Supervisory Board's committees

In order to perform its tasks effectively, the Supervisory Board has eight committees. The General Committee deals with personnel matters relating to the Board of Management (including Board of Management compensation matters) and prepares the meetings of the Supervisory Board. The Audit Committee performs the tasks required by law and recommended by the German Corporate Governance Code. These include, in particular, monitoring accounting and the accounting process, the effectiveness of the internal control system, the risk management and internal auditing system, the audit of financial statements, compliance, and data privacy. The Staff Committee deals with general personnel matters not relating to the Board of Management. The Finance Committee deals in particular with the Company's investment planning and focuses, and handles complex financial and commercial business transactions. The Technology and Innovation Committee supports and promotes innovation and technological developments at infrastructure and product level and supports the Board of Management with advice on how to tap new growth areas. Furthermore, the Supervisory Board has formed a Nomination Committee, which consists exclusively of shareholders' representatives. The Nomination Committee is responsible in particular for proposing to the Supervisory Board suitable candidates for the latter to subsequently recommend to the shareholders' meeting for election. The Nomination Committee does this in compliance with legal requirements, the German Corporate Governance Code, and the Rules of Procedure of the Supervisory Board, and taking into account the targets adopted by the Supervisory Board as regards its composition, as well as the profile of skills and expertise developed by the Supervisory Board for the overall Board. Moreover, the Nomination Committee defines the requirements for the specific position to be filled. In addition, there is a Mediation Committee, which was formed in accordance with § 27 (3) of the Codetermination Act. Furthermore, a Special Committee for U.S. Business had been established in May 2014. This was dissolved as of January 1, 2021 following consummation of the Sprint transaction in the United States.

The committees' chairpersons report to the Supervisory Board on a regular basis on the work of the committees. The Chairwoman of the Audit Committee, Dagmar P. Kollmann, has expert knowledge of accounting and auditing. She is also particularly knowledgeable and experienced in the application of accounting standards and internal control procedures. She is independent, and is not a former member of the Board of Management of Deutsche Telekom AG. Like the members of the full Supervisory Board, the members of the Audit Committee overall are very familiar with the sector in which Deutsche Telekom AG is active.

Supervisory Board committees

Committee

Supervisory Board member

Committee

Supervisory Board member

General Committee

Nomination Committee

Prof. Dr. Ulrich Lehner (Chairman)

Josef Bednarski until April 30, 2020 Dr. Rolf Bösinger

Prof. Dr. Ulrich Lehner (Chairman) Dr. Rolf Bösinger

Dagmar P. Kollmann

Kerstin Marx since May 15, 2020

Lothar Schröder until March 26, 2020

Frank Sauerland since March 27, 2020

Finance Committee

Special Committee for U.S. Business until December 31, 2020

Karl-Heinz Streibich (Chairman)

Prof. Dr. Ulrich Lehner (Chairman)

Dr. Günther Bräunig

Dr. Günther Bräunig

Constantin Greve since March 27, 2020 Nicole Koch

Constantin Greve

Dr. Helga Jung

Dagmar P. Kollmann

Lothar Schröder until March 26, 2020

Frank Sauerland until March 27, 2020 Karin Topel

Nicole Seelemann-Wandtke since March 27, 2020

Sibylle Spoo

Committee

Supervisory Board member

Committee

Supervisory Board member

Audit Committee

Technology and Innovation Committee

Dagmar P. Kollmann (Chairwoman) Josef Bednarski until April 30, 2020 Dr. Rolf Bösinger

Lothar Schröder (Chairman) Odysseus D. Chatzidis

Lars Hinrichs

Prof. Dr. Michael Kaschke Petra Steffi Kreusel

Kerstin Marx since May 15, 2020 Sibylle Spoo

Nicole Seelemann-Wandtke Karl-Heinz Streibich Margret Suckale

Staff Committee

Mediation Committee

Lothar Schröder (Chairman) until March 26, 2020

Prof. Dr. Ulrich Lehner (Chairman)

Frank Sauerland (Chairman) since March 27, 2020

Josef Bednarski until April 30, 2020

Josef Bednarski until April 30, 2020 Dr. Rolf Bösinger

Odysseus D. Chatzidis since November 27, 2020

Kerstin Marx since May 15, 2020

Harald Krüger since November 27, 2020

Frank Sauerland since March 27, 2020

Prof. Dr. Ulrich Lehner

Lothar Schröder until March 26, 2020

Kerstin Marx since May 15, 2020 Margret Suckale

| For the current composition of the Supervisory Board committees, please refer to the website of Deutsche Telekom AG:https://www.telekom.com/en/investor-relations/management-and-corporate-governance.

Targets for the number of women on the Board of Management and at further management levels; compliance with minimum percentages for Supervisory Board members

Composition targets for the Board of Management and the two management levels directly below Board of Management level

The executive bodies at Deutsche Telekom AG are required by law (§ 76 (4) and § 111 (5) AktG) to set targets for the number of women on the Board of Management and at the two management levels directly below the Board of Management level, and to set deadlines for the achievement of these targets, on a regular basis. A report is to be made each year on the targets set and on the achievement of the targets set after the expiry of each deadline for implementation of these. Grounds must be given for any failure to meet the targets during the implementation period.

For the second implementation period that began at the start of 2016, the Supervisory Board set a target of around 29 % of women (2/7) on the Board of Management, and the Board of Management set a target of 30 % of women in each case for the two management levels directly below Board level, by the end of 2020.

The second implementation period ended on December 31, 2020. At the end of the second implementation period on December 31, 2020, the number of women on the Board of Management stood at 38 % (3/8), thus exceeding the target of 29 % (2/7). As of December 31, 2020, women accounted for 24.1 % at the first management level directly below the Board of Management level and for 24.6 % at the second management level. The number of women at both these management levels was therefore below the target of 30 %. Failure to meet these targets is in particular a result of reorganizational and restructuring measures. In some cases, the reorganization of departments at the first and second management levels directly below the Board of Management level led to the cutting of management positions that had been filled by women. Furthermore, practical experience shows that diversity has not always been given due consideration when refilling top management positions in the wake of reorganizational and restructuring measures.

The expiration of the second implementation period prompted the executive bodies of Deutsche Telekom AG to set new targets for the number of women on the Board of Management and the two management levels directly below the Board of Management level, as well as deadlines for their implementation in the form of a third implementation period. For the period January 1, 2021 through December 31, 2025, the Supervisory Board has set a target of 38 % of women (3/8) on the Board of Management, and the Board of Management has set a target of 30 % of women in each case for the two management levels directly below the Board of Management level.

The Board of Management takes diversity into account when selecting candidates for management positions within the Company and strives in particular to give appropriate consideration to women and internationality.

| To read the latest report on compliance with legal provisions on increasing the number of women in management positions, please refer to the website of Deutsche

Telekom AG:https://www.telekom.com/en/investor-relations/investor-relations/report-on-women-quota-425674.

Minimum percentages for Supervisory Board members

In accordance with the law, the Supervisory Board of Deutsche Telekom AG must consist of a minimum of 30 % women and a minimum of 30 % men. Deutsche Telekom AG is required by law (§ 96 (2) and (3) AktG) to comply with minimum percentages for both the number of men and women when appointing members to the Supervisory Board. Grounds must be given for any failure to meet these standards. In the 2020 financial year, the proportion of women on the Supervisory Board never fell below 40 %; the same applies to the proportion of men. The minimum percentages of 30 % on the Supervisory Board were therefore both met in the entire 2020 financial year through joint compliance.

Information on the diversity concept

The aim of the diversity concept for the Supervisory Board and the Board of Management is to ensure in each case that the composition of these bodies takes into account the criteria of background, gender, origin, and age (diversity criteria), making them more diverse so that different experience and backgrounds are represented on the Supervisory Board and to contribute to good corporate governance with the help of diversity of opinion and knowledge. The aim of taking the selected diversity criteria into account in the composition of these bodies is to work towards creating diversity of expertise and opinions in the bodies in question. The diversity of expertise in the bodies is to promote the members' understanding of the current business situation of the Company, while diversity of points of view within the bodies enables the members to consider other perspectives than their own and to better recognize opportunities and risks when making decisions.

Diversity concept for the Board of Management and long-term succession planning

Taking into account the stipulations of the German Corporate Governance Code, the diversity concept encompasses the following objectives for the composition of the Board of Management:

As a whole, the Board of Management is in particular to have many years of experience in the telecommunications sector, technology, innovation, finance, digitalization, human resources management, as well as legal affairs and compliance.

The Supervisory Board has stipulated a quota for the Board of Management of 29 % women (2/7) by the end of 2020. Furthermore, the Supervisory Board has set a target of 38 % (3/8) for the percentage of women on the Board of Management by the end of 2025.

As a rule, members of the Board of Management should not be older than 65 years of age.

In view of the Company's international focus, at least one member of the Board of Management is to have an international background.

Long-term succession planning for the Board of Management

Together with the Board of Management and supported by the General Committee, the Supervisory Board ensures that there is long-term succession planning for the Board of Management. In addition to fulfilling the requirements of the German Stock Corporation Act, the German Corporate Governance Code, and the Rules of Procedure, long-term succession planning also takes into account the composition targets set by the Supervisory Board as regards the number of women on the Board of Management as well as the criteria in the diversity concept adopted by the Supervisory Board on the composition of the Board of Management. Regular discussions are held with regard to internal and external candidates for each Board of Management department. In these discussions, the candidates' experience and qualifications are matched to the specific requirements profile of the respective Board of Management department. Potential succession candidates are then grouped into the categories "immediate," "medium term," and "long term." In addition, the Supervisory Board monitors an internal talent pool filled with high-potential candidates as a further category. Wherever development or training needs arise for individual candidates, specific development measures are agreed with them in person. A structured process is put in motion that is designed to provide the candidates in question with the requisite skills to assume responsibility for a Board of Management department. Where necessary, the Supervisory Board/General Committee is assisted by external advisors.

Implementation of the diversity concept for the Board of Management

The diversity concept for the Board of Management is brought to bear during the process of appointing new Board members. When selecting candidates or proposing individuals for appointment to the Board of Management, the Supervisory Board/General Committee of the Supervisory Board takes into account the requirements adopted in the diversity concept for the Board of Management.

The members of the Board of Management cover a broad spectrum of knowledge and experience, have strong educational and professional backgrounds and extensive international experience. The Board of Management members as a group are in possession of all of the knowledge and experience considered essential to Deutsche Telekom AG's activities. The experience of the Board of Management as a whole spans all business areas of importance to Deutsche Telekom AG, in particular in the field of telecommunications and infrastructure, as well as longstanding experience in the areas of information technology, innovation and digitalization, corporate development, finance, as well as legal affairs and human resources.

Dr. Dirk Wössner left the Board of Management in the 2020 financial year. The Supervisory Board appointed Srini Gopalan, the former Board of Management member for Europe, to succeed Dr. Wössner as the Board of Management member for Germany. Giving due consideration to the diversity concept and the Company's interests, the Supervisory Board appointed Dominique Leroy as the Board of Management member for Europe to succeed Srini Gopalan as of November 1, 2020.

Ensuring the adequate representation of women is of paramount importance in long-term succession planning for the Board of Management. Various age groups are represented on the Board of Management. At present, no Board member is over the age of 65.

Targets for the composition, profile of skills and expertise, and diversity concept for the Supervisory Board

Taking into account the stipulations of the German Corporate Governance Code, the diversity concept encompasses the following objectives for the composition of the Supervisory Board:

•  Taking into account the Company's specific situation, the Supervisory Board resolves to consider the aspect of diversity in addition to the requisite expertise of a candidate when issuing recommendations for future appointments to the Supervisory Board to the competent election bodies.

•  The Supervisory Board has to be composed in such a way that its members as a group possess the knowledge, ability, and expert experience required to properly perform its tasks.

•  The Supervisory Board supports an appropriate degree of women's representation on the Supervisory Board. A minimum of 30 % of members of the Supervisory Board shall be women.

•  In view of the Company's international focus, candidates with an international background are to be given appropriate consideration in future appointments to the Supervisory Board.

•  Conflicts of interest are to be avoided in appointments to the Supervisory Board.

•  The term of office for members of the Supervisory Board shall end no later than the close of the shareholders' meeting after the Supervisory Board member reaches the age of 75 (standard age limit) unless there are special reasons for this not to be the case.

•  A regular limit of three terms of office shall apply for membership on the Supervisory Board. Appointments by court order that are limited until the next shareholders' meeting shall not, however, be considered a term of office.

•  Supervisory Board members representing the shareholders' side will (from 2021) be proposed to the shareholders' meeting for appointment as a rule for a four-year term of office.

•  The Supervisory Board shall include what the shareholders' representatives consider to be an appropriate number of independent members in line with recommendation C.6 of the German Corporate Governance Code.. As such, the shareholders' representatives side considers that more than half of the shareholders' representatives shall be independent from the Company and its Board of Management within the meaning of recommendation C.7 of the German Corporate Governance Code. At least two shareholders' representatives must be independent from any controlling shareholder.

Profile of skills and expertise

The Supervisory Board considers the following skills, expertise, and knowledge to be essential for it to exercise its role:

1. Strategic skills and expertise

•  TC/IT industry, related industries

•  Market (competition and customers), sales, and customer business

•  Products

•  Market participants

•  Regulated industries

•  M&A processes

2. Financial skills and expertise

•  Accounting processes, risk management, audit of financial statements

•  Financial KPIs and systems

•  Capital and financial markets

3. Control skills and expertise

•  Management/CEO

•  Supervisory Board

•  International management experience

•  Co-determination

•  Legal affairs/compliance

•  Regulatory and competition law

4. Innovation skills and expertise

•  New technologies

•  Digitalization

•  IT/NT/telecommunications

5. Sustainability expertise, social skills

•  Human resources

•  Change management

•  Organizational and cultural change

•  Diversity

•  Sustainability

Implementation of the composition targets including the profile of skills and expertise and the diversity concept for the Supervisory Board; independence of Supervisory Board members

Both the Supervisory Board and the Nomination Committee of the Supervisory Board take account of the composition targets and the requirements laid down in the diversity concept for the process of selecting and nominating candidates for appointment to the Supervisory Board. Most recently, the Supervisory Board and the Nomination Committee took into account the targets, including the profile of skills and expertise and the diversity concept, when nominating suitable candidates for election.

In the Supervisory Board's opinion, the Supervisory Board in its current composition meets the composition targets and rounds out both the profile of skills and expertise and the diversity concept. The members of the Supervisory Board possess the professional and personal skills considered essential for the task. As a whole, they are familiar with the telecommunications sector and have the knowledge, abilities, and experience required to advise and supervise the Board of Management of Deutsche Telekom AG. A significant proportion of Supervisory Board members are active internationally or have extensive international experience. Diversity is given due consideration in the Supervisory Board. In the 2020 financial year, eight - and later nine - members of the Supervisory Board were women. As such, women accounted initially for 40 % and then for 45 % of the Supervisory Board in the reporting year.

With her proven experience and expertise in environmental, social, and governance (ESG) criteria, Margret Suckale has been appointed as the Supervisory Board's ESG expert.

The avoidance of conflicts of interest and compliance with the standard age limit and the regular limit on terms of office were taken into consideration in the appointments to the Supervisory Board.

According to the assessment of the shareholders' representatives on the Supervisory Board, all members on the shareholders' side are currently independent within the meaning of the German Corporate Governance Code. These are: Dr. Rolf Bösinger, Dr. Günther Bräunig, Lars Hinrichs, Dr. Helga Jung, Prof. Dr. Michael Kaschke, Dagmar P. Kollmann, Harald Krüger, Prof. Dr. Ulrich Lehner, Karl-Heinz Streibich, and Margret Suckale.

In its assessment of Prof. Lehner's independence, the shareholders' representatives took into consideration that he has been a member of the Supervisory Board for more than twelve years. According to the German Corporate Governance Code, this is an indicator for a lack of independence. At their due assessment, the shareholders' representatives concluded that the indicator does not contradict their opinion that Prof. Lehner is independent from the Company and its Board of Management. In his work on the Supervisory Board and its committees, as well as in the execution of his duties, Prof. Lehner continues to demonstrate the necessary critical distance to the Company and its Board of Management along with the capacity for objective judgment. Moreover, Prof. Lehner confirmed in a personal statement that he considers himself to be independent from the Company and its Board of Management.