Siemens 2007 Annual Report Download - page 80

80 Corporate Governance Report
Corporate Governance Report
Siemens fully complies with the recommendations of the German Corporate Gover-
nance Code (Code), which was fi rst issued in 2002 and later expanded, most recently
in June 2007. Our prior exception is no longer applicable since the annual allocation
to accrued pension liabilities or pension funds for members of the Managing Board in
the case of pension plans is disclosed on an individual basis in this Annual Report.
The Managing Board and the Supervisory Board of Siemens, respectively, discussed
compliance with the recommendations of the Code, in particular with regard to the
amendments of June 14, 2007. Based on these deliberations, the Boards approved the
Declaration of Conformity (with the Code) which is set forth below, posted on our
website and updated as necessary. Siemens voluntarily complies with the Code’s non-
obligatory suggestions, with only minor exceptions.
Our listing on the New York Stock Exchange (NYSE) subjects us to certain U.S. capital
market laws (including the Sarbanes-Oxley Act [SOA]) and regulations of the U.S.
Securities and Exchange Commission (SEC) and rules of the NYSE. To facilitate our
compliance with the SOA, we have, among other things, established a Disclosure Com-
mittee (comprised of nine central department heads) that is responsible for reviewing
certain fi nancial and non-fi nancial information and advising the Managing Board in
its decision-making about disclosure. We have also introduced procedures that re-
quire our Group and subsidiary managements to certify various matters, providing
a basis on which our CEO and CFO certify our fi nancial statements to the SEC. Consis-
tent with the SOA, Siemens has also implemented procedures for handling accounting
complaints and a Code of Ethics for Financial Matters.
Management and control structure – The Supervisory Board
As a German stock corporation, Siemens is subject to German corporate law and has
a two-tier management and oversight structure, consisting of an 11-member Manag-
ing Board and a 20-member Supervisory Board. The German Codetermination Act
(Mitbestimmungsgesetz) requires that the Company’s shareholders and its employees
each select one-half of the Supervisory Board’s members.
According to the Bylaws for the Supervisory Board, the shareholder representatives
must be independent. Some Supervisory Board members hold, or held in the past
year, high-ranking positions at other companies; nevertheless, our sales and purchas-
es of products and/or services to or from such companies are transacted on an arm’s
length basis. We believe that these dealings do not compromise the independence of
the associated Supervisory Board members.
The Supervisory Board oversees and advises the Managing Board in its management
of Company business. At regular intervals, it discusses business development, plan-
ning, strategy and implementation. It also discusses Siemens’ quarterly and half-year-
ly reports and approves the annual, stand-alone fi nancial statements of Siemens AG,
as well as the Consolidated Financial Statements of Siemens, taking into account both
the audit reports provided by the independent auditors and the results of the review
conducted by the Audit Committee. It monitors the Company’s adherence to statutory