REPORT BY THE BOARD OF MANAGEMENT AND SUPERVISORY BOARD ON CORPORATE GOVERNANCE

At Deutsche Post AG, one of the most important goals of responsible company management is achieving an optimally balanced division of tasks and responsibilities between the Supervisory Board and the Board of Management.Good corporate governance should aim to generate a sustained increase in the Company’s value while promoting the confidence of investors, customers,employees and the public in the management and supervision of Deutsche Post AG.

As an Aktiengesellschaft (German public company) subject to German law, Deutsche Post AG is managed by its Board of Management and supervised by its Supervisory Board. The cooperation between these two executive bodies is defined by the Company’s Articles of Association as resolved by the Annual General Meeting,the by-laws of the Supervisory Board and the Board of Management, as well as by the resolutions and actions of the executive bodies within the framework of the relevant statutory provisions.

Based on intensive discussions held by the Executive Committee and the Finance and Audit Committee of the Supervisory Board, and following their own in-depth examination, both the Board of Management and the Supervisory Board unanimously resolved to fully comply with the recommendations of the German Corporate Governance Code in fiscal year 2003.

Deutsche Post AG’s business practices already fulfilled the Code’s recommendations to a large extent in the past, and only a few amendments to the by-laws of the Supervisory Board and the resolutions of the Board of Management and the Supervisory Board were necessary. Among other things, we defined in greater detail the Board of Management’s information and reporting duties to the Supervisory Board. We also fully implemented the rule regarding the handling of conflicts of interest as set forth in the Code. In addition, the Finance Committee was renamed the Finance and Audit Committee, and the tasks and responsibilities of this Committee with regard to accounting and auditing were formally incorporated in the by-laws.

Since the Company’s Articles of Association provide for fixed compensation of Supervisory Board members without taking into account membership in the committees, the Board of Management and the Supervisory Board will recommend to the Annual General Meeting on June 5, 2003 that the Articles of Association be amended to include a provision for performance-related compensation that takes into account chairing and membership of Supervisory Board committees when specifying compensation. After a corresponding resolution is passed by the Annual General Meeting, the Board of Management and the Supervisory Board will fully comply with the recommendations of the Code.