Siemens 2006 Annual Report Download - page 85

Corporate Governance Report 81
The Supervisory Board’s Bylaws establish four committees, whose duties, responsibilities
and procedures fulfill the requirements of the Code, reflect applicable SOA requirements and
incorporate applicable NYSE rules, as well as certain NYSE rules not mandatorily applicable to
Siemens AG.
The Chairman’s Committee performs the collective tasks of a nominating, compensation
and corporate governance committee. In particular, it makes proposals regarding the appoint-
ment of Managing Board members and establishes guidelines for the conditions of employ-
ment and for the structure and level of the remuneration of Managing Board members.
The Audit Committee consists of three shareholder representatives and two employee rep-
resentatives. The Supervisory Board monitors the independence of the members of the com-
mittee and sees to it that they have special knowledge and experience in the application of
accounting principles and internal control processes. The Audit Committee oversees the appro-
priateness and the effectiveness of the Company’s external and internal accounting processes.
Together with the independent auditors, it also reviews the Company’s financial statements pre-
pared quarterly and annually by management. On the basis of the independent auditors’ report
on the annual financial statements, the Audit Committee makes a recommendation to the
Supervisory Board whether or not it should approve those financial statements. In addition, the
Audit Committee oversees the Company’s internal control system and its procedures for
assessing, monitoring and managing risk. It also monitors statutory and regulatory compli-
ance. The Company’s Financial Audit Department reports regularly to the Audit Committee. In
addition, the Audit Committee monitors the independence, qualifications, rotation and per-
formance of the independent auditors and performs the other functions required of it under
the SOA.
The Mediation Committee submits proposals to the Supervisory Board in the event that the
Supervisory Board cannot reach the two-thirds majority required to appoint a Managing Board
member.
The Ownership Rights Committee is responsible for decisions regarding the exercise of
Siemens’ shareholder rights in subsidiaries subject to the German Codetermination Act.
The Managing Board
The Managing Board, as the Company’s top management body, is obligated to promote the
interests of the Company at all times and to drive sustainable growth in company value. Its
eight-member Corporate Executive Committee cooperates with the President and CEO to define
overall Company policies and is also responsible for determining the Company’s strategic ori-
entation, planning and finalizing the Company’s budget, allocating resources, and monitoring
the executive management of each Group. The Managing Board also prepares the Company’s
quarterly reports, the annual, stand-alone financial statements of Siemens AG and the Consoli-
dated Financial Statements of Siemens. The Managing Board cooperates closely with the Super-
visory Board, informing it regularly, promptly and fully on all issues related to Company strate-
gy and strategy implementation, planning, business development, financial position, earnings
and risks.