Siemens 2008 Annual Report Download - page 117

Corporate Governance Report 21
Bylaws for the Compliance Committee. In addition, the Supervisory Board appoints the members of the Manag-
ing Board and allocates members’ individual duties. Important Managing Board decisions – such as major acqui-
sitions, divestments and nancial measures – require Supervisory Board approval, provided that such approval
is not to be provided by the Finance and Investment Committee instead, according to the Bylaws for the Super-
visory Board. In the Bylaws for the Managing Board, the Supervisory Board has established rules that govern the
work of the Managing Board, in particular the allocation of duties among individual Managing Board members,
matters reserved for the Managing Board as a whole, and the required majority for Managing Board resolutions.
The Supervisory Board’s Bylaws provide for the establishment of committees – currently six – whose duties,
responsibilities and procedures fulll the requirements of the Code, reect applicable SOA requirements and
incorporate applicable NYSE rules, as well as certain NYSE rules not mandatorily applicable to Siemens AG. Each
committee’s chairman provides the Supervisory Board with regular reports regarding the activities of the rele-
vant committee.
The Chairman’s Committee comprises the Chairman and Deputy Chairmen of the Supervisory Board as well as
one further employee representative to be elected by the Supervisory Board and performs the collective tasks of
a nominating, compensation and corporate governance committee to the extent that the tasks are not performed
by the Nominating Committee. In particular, it makes proposals regarding the appointment of Managing Board
members, reviews the Managing Board contracts and prepares resolutions for the Supervisory Board in full ses-
sion on the Managing Board’s compensation system including the main contract elements.
The Audit Committee comprises the Chairman of the Supervisory Board, two of the Supervisory Board’s share-
holder representatives and three of the Supervisory Board’s employee representatives. The Supervisory Board
monitors the independence of the members of the committee 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 appropriateness and the effectiveness of the Company’s external and internal accounting proc-
esses. Together with the independent auditors, it also reviews the Company’s nancial statements prepared
quarterly, half-yearly and annually by the Managing Board. On the basis of the independent auditors’ report on
the annual nancial statements, the Audit Committee makes a recommendation to the Supervisory Board
whether or not it should approve those nancial statements. In addition, the Audit Committee oversees the
Company’s internal control system related to nancial reporting and its procedures for assessing, monitoring
and managing risk. The internal corporate audit unit reports regularly to the Audit Committee. In addition,
the Audit Committee monitors the independence, qualications, rotation and performance of the independent
auditors and performs the other functions required of it under the SOA.
The Compliance Committee, which was established in April 2007, comprises the Chairman of the Supervisory
Board, two of the Supervisory Board’s shareholder representatives and three of the Supervisory Board’s employee
representatives. For the currently ongoing compliance investigation, the Compliance Committee performs its
duty to monitor the Company’s adherence to statutory provisions, ofcial regulations and internal Company
policies. In addition, the Compliance Committee is responsible for overseeing the currently ongoing compliance
investigation, dealing with reports from the independent advisors and other persons appointed by the Compli-
ance Committee on the independent investigation and review of the internal compliance and control systems.