Siemens 2006 Annual Report Download - page 81

Report of the Supervisory Board 77
Committee meetings
As one of the Supervisory Board’s four committees, the Chairman’s Committee remained in close
contact with the Managing Board between the regular meetings of the Supervisory Board. The
Chairman’s Committee met three times, primarily to address personnel matters, issues relating to
Managing Board remuneration, and the determination of variable and stock-based remuneration
components. In addition, the Chairman’s Committee dealt with the Company’s strategy and per-
formance and with matters relating to corporate governance.
Together with the independent auditors, the President and Chief Executive Officer, and the
Chief Financial Officer, the Audit Committee discussed the Annual Financial Statements of
Siemens AG and the Consolidated Financial Statements of Siemens worldwide, the appropriation
of net income and the Annual Report on Form 20-F for the U.S. Securities and Exchange Commis-
sion (SEC). During the year, the Committee also gave in-depth consideration to the Company’s
quarterly reports, the appointment of the independent auditors, oversight of the auditors’ inde-
pendence and efficiency, and their fee. In addition, the Audit Committee dealt intensively with
the Company’s risk management system and with the authorization and findings of the internal
financial audit and the reports concerning legal and regulatory risks as well as the transition of
the Company’s financial reporting system to the IFRS. In addition, the Audit Committee devoted
several meetings to compliance with the provisions of Section 404 of the Sarbanes-Oxley Act (SOA)
regarding internal control systems.
At the beginning of fiscal 2006, the annual Compliance Report for fiscal 2005 was presented
to the Audit Committee and explained by the Chief Compliance Officer. At subsequent meetings,
the Chief Compliance Officer reported regularly to the Audit Committee on the status of current
and impending legal proceedings, the handling of complaints regarding the Company’s financial
statements, the implementation of compliance-related measures and new developments in
compliance law. At its December meeting, the Audit Committee – in connection with the legal
proceedings relating to allegations of embezzlement, bribery and tax evasion on the part of for-
mer and current Company employees – retained the law firm Debevoise & Plimpton LLP to:
■clarify the circumstances relating to the criminal allegations at Com
■analyze the implications of current findings for the efficiency of the Company’s compliance
system and its internal control system
■investigate whether similar situations have arisen at any other Siemens Group.
Debevoise & Plimpton will also commission independent auditors to support them in the exami-
nation of Siemens’ control systems by providing forensic accounting experts. At the suggestion of
the Corporate Executive Committee, the Audit Committee appointed the internationally recog-
nized expert Michael J. Hershman as Siemens’ compliance advisor.