Siemens 2006 Annual Report Download - page 80

Report of the Supervisory Board
76
Group- and Region-specific issues
As in previous years, the regular meetings of the Supervisory Board were devoted not only
to Company-wide matters. We also gave individual Groups and Regional Units an opportunity
to describe their business prospects in detail. In fiscal 2006, the Transportation Systems Group,
the Industrial Solutions and Services Group, OSRAM and the Regions Middle East, India and
China reported to the Supervisory Board.
The operations of the remaining Groups and larger Regional Units had been intensively
discussed in the years before. Like all our activities, these operations are also reviewed as part
of our quarterly reporting system and in connection with specific issues.
At our September meeting, we received extensive information on the status of the Service
Initiative, which aims to expand the volume of product-related and stand-alone services offered
by Siemens and further increase the contribution of these profitable, fast-growing businesses
to Company sales. At this meeting, we also received a status report regarding the transition of
Siemens’ financial reporting system to the International Financial Reporting Standards (IFRS).
Corporate governance
The Supervisory Board regularly deals with the implementation and further development of
the Company’s corporate governance principles; our December 2005 meeting was held without
the Managing Board in attendance.
At our December 2006 meeting, the Supervisory Board discussed in detail the background to
and present status of investigations into allegations of embezzlement, bribery and tax evasion on
the part of former and current Company employees. We expressed our unconditional support for
the measures introduced by the Audit Committee (see page 77 of this Report).
At the same meeting, the Supervisory Board determined that Siemens AG – in accordance
with the Company’s Declaration of Conformity – had complied with the recommendations of the
German Corporate Governance Code in fiscal 2006. As stated in the Declaration of Conformity
approved by the Supervisory Board, Siemens complies with all but one of the Code’s recommenda-
tions: the Company does not comply with the new recommendation of the German Corporate
Governance Code (as amended on June 12, 2006) regarding the annual statement of the alloca-
tion to accrued pension liabilities or pension funds for pension commitments to Managing Board
members.
Further information on corporate governance at the Company and a detailed report on the
level and structure of the remuneration paid to members of the Supervisory and Managing Boards
appear on pages 80 ff. and 86 ff. of this Report.