Corporate Governance Declaration in accordance with Sec. 289 a of the German Commercial Code (HGB)

The management of RWE Aktiengesellschaft (“RWE”), a German listed company, is primarily determined by the German Stock Corporation Act (AktG) and the rules set forth in the latest version of the German Corporate Governance Code.

In line with statutory regulations, RWE is subject to what is termed the “dual governance system,” which envisages the strict separation of the Executive Board as managing body and the Supervisory Board as monitoring body. The Executive and Supervisory Boards cooperate closely in the interest of the company.

The Executive Board manages the company, aiming to create lasting added value, for which it assumes responsibility. In this regard, the principle of overall responsibility applies, i.e. the members of the Executive Board share the overall responsibility for managing the company. They develop the corporate strategy and coordinate efforts with the Supervisory Board to ensure that it is implemented. The principles of the RWE Executive Board’s cooperation have been summarised in the Rules of Procedure for the Executive Board. In particular, they establish the areas for which the individual Executive Board members are responsible, the affairs the rights to which are reserved by the Executive Board as a whole, the passage of resolutions, the required majorities for passing resolutions by name, and the rights and duties of the Chairman of the Executive Board. RWE’s Executive Board currently consists of 6 members. More detailed information on the Executive Board members and the areas for which they are responsible can be found here.

The Executive Board regularly, promptly and comprehensively informs the Supervisory Board of all issues related to business performance that are material to the RWE Group, major transactions as well as the latest earnings situation along with the company’s risk position and risk management. Deviations in the business trend from preceding forecasts and targets are commented and reasoned in detail. Furthermore, the Executive Board regularly reports on compliance, i.e. action taken to adhere to statutory regulations and internal company policies, an issue for which the Executive Board is also responsible.

The Supervisory Board advises the Executive Board in managing the company and monitors its activity. It appoints and dismisses the members of the Executive Board, determines the compensation system for Executive Board members, and establishes the total compensation for each of them. It is involved in all decisions that are of fundamental importance to RWE. RWE’s Supervisory Board consists of 20 members and is staffed by an equal number of shareholder and employee representatives, in line with the German Co-Determination Act (MitbestG). The principles of the RWE Supervisory Board’s cooperation have been summarised in the Rules of Procedure for the Supervisory Board. Among other things, they stipulate the formation of committees. RWE has five standing committees at present: the Executive Committee, the Mediation Committee in accordance with Sec. 27, Paragraph 3 of the German Co-Determination Act (MitbestG), the Personnel Affairs Committee, the Audit Committee, and the Nomination Committee. The committees’ tasks and compositions are set forth in Article 10 et seqq. of the Rules of Procedure for the Supervisory Board. The names of the committee members are provided here. Committee chairmen regularly report to the Supervisory Board on the committees’ work. Further details on the specifics of the work done by the Supervisory Board and its committees are included in the latest Supervisory Board Report. In addition to the standing committees, a special committee for the improvement of the financial structure was established in August 2011, which approved the usage of the authorised capital in exchange for a cash contribution as well as the determination of the issue price for the new shares and passed a resolution in favour of the corresponding amendment to the Articles of Association in December 2011. This committee’s activity ended on completion of the capital increase.

In addition, the Articles of Incorporation of RWE (Art. 7) and the Rules of Procedure for the Supervisory Board (Art. 8) include a list of transactions which are subject to Supervisory Board approval.

RWE believes that responsible and transparent corporate governance is the basis for sustained commercial success. The guiding principles in this regard are set forth in the most up-to-date version of the German Corporate Governance Code, which was first introduced in 2002. Therefore, subsequent to dutiful scrutiny, the Executive and Supervisory Boards of RWE issued the following recent Statement of Compliance in accordance with Section 161 of the German Stock Corporation Act (AktG) on 22 February 2011:

Since its last statement of compliance on 23 February 2010 and until 2 July 2010, RWE AG complied with all of the recommendations of the Government Commission of the German Corporate Governance Code issued in the 5 August 2009 version of the Code. Since 3 July 2010, RWE AG has complied with all of the recommendations of the version of the Code issued on 2 July 2010, with the following exceptions:

• The diversity recommendations set out in Item 5.1.2, Sentence 1 and Item 5.4.1, Paras. 2 and 3 are not being fully complied with at present. Ensuring diversity is already common practice throughout the Group. Among other things, we have had diversity programmes tailored to increase the share of women in managerial positions for quite a while. However, an overall concept for achieving diversity goals when staffing the Executive Board is yet to be created.
  
  The same applies to the staffing of the Supervisory Board: As before, the Nomination Committee and the plenary session of the Supervisory Board considered the issue of diversity, RWE‘s international operations, potential conflicts of interest, and the established age limit for Supervisory Board members when selecting the candidates for the election of the shareholder representatives scheduled for 20 April 2011. However, no specific goals existed that could have been considered or presented in the Annual Report, and they are still yet to be established.
  
  The Supervisory Board of RWE AG is of the opinion that creating an overall concept for the diversity of members of the Executive and Supervisory Boards and determining specific goals regarding the composition of the Supervisory Board requires extensive preparatory work and in-depth discussions, which should be left to the Supervisory Board, which will have been recomposed after this year‘s Annual General Meeting. Only in this manner can one ensure that all material aspects be considered and that both the concept and the goals prove themselves in practice.
  
  In the current financial year, the Supervisory Board will deal with the issue extensively and provide information in accordance with statutory regulations on any corresponding adjustments to RWE‘s corporate governance.

• RWE AG followed the recommendation in Item 5.4.5 to a limited extent from 3 July 2010 to 21 January 2011. Until the end of this period, Dr. Ekkehard Schulz was Chairman of the Executive Board of ThyssenKrupp AG and sat on the supervisory boards of two listed companies as well as of a non-listed company with similar requirements concurrently to his membership in the Supervisory Board of RWE.
  
  As he has retired from the Executive Board of ThyssenKrupp, we comply with the Code‘s recommendation unconditionally once again. It is the view of the Supervisory Board of RWE AG that it was in the company‘s best interest to keep Dr. Schulz on the RWE board. This opinion is based on Dr. Schulz‘s years-long tenure on RWE‘s Supervisory Board as well as on the extensive expertise and experience he possesses by virtue of his leading positions in companies with international activities. Moreover, the deviation from the Code‘s recommendation only lasted for a very short period.

The Executive and Supervisory Boards intend to update the annual statement of compliance after a dutiful review. The update is scheduled for 28 February 2012. On issuance of the new statement, it can be accessed here.

Earlier statements of compliance issued by RWE which are no longer valid have been posted here. Further details concerning RWE’s corporate governance practice are provided in the latest Corporate Governance Report, which also forms part of this corporate governance declaration.

RWE is aware of its role in society and the responsibility it shoulders vis-à-vis its customers, business partners, shareholders and employees. The RWE Code of Conduct and its principles, which are closely aligned to those of the United Nations Global Compact, form the foundation for RWE’s responsible and lawful action. The Code is thus the basis for RWE’s entrepreneurial activity and is applicable throughout the RWE Group, taking account of the specifics of the sectors and countries in question. RWE uses its groupwide compliance organisation to enforce the RWE Code of Conduct and its policies among its staff and corporate bodies.

Essen, February 2012

RWE Aktiengesellschaft

The Executive Board