Siemens 2009 Annual Report Download - page 104

 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
1 Corporate Governance report  Compliance report  Compensation report (part of Notes
to Consolidated Financial Statements)

www.siemens.com/corporate-governance
Siemens fully complies with the recommendations of the Ger-
man Corporate Governance Code (the “Code”), which was first
issued in 2002 and later expanded, most recently in June 2009.
The Managing Board and the Supervisory Board of Siemens
AG, respectively, discussed compliance with the recommenda-
tions of the Code, in particular with regard to the amendments
of June 18, 2009. Based on these deliberations, the Boards ap-
proved the Declaration of Conformity (with the Code) which is
set forth below (page 23), posted on our website and updated
as necessary. Siemens voluntarily complies with the Code’s
non-obligatory suggestions.
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 the rules and regulations of the U.S. Se-
curities and Exchange Commission (“SEC”) and the NYSE. To
facilitate our compliance with the SOA, we have, among other
things, established a Disclosure Committee, comprising the
heads of Corporate Units, which is responsible for reviewing
certain financial and non-financial information and advising
our Managing Board in its decision-making about disclosure.
We have also introduced procedures that require the manage-
ment of our Sectors, our Cross-Sector Businesses and our sub-
sidiaries to certify various matters, providing a basis on which
our CEO and CFO certify our financial statements to the SEC.
Consistent with the requirements of the SOA, we have 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 a Managing Board and a Supervisory
Board. The German Codetermination Act (Mitbestimmungs-
gesetz) requires that the Company ’s shareholders and its em-
ployees each select one-half of the Supervisory Board’s mem-
bers.
According to the Bylaws for the Supervisory Board, the share-
holder representatives on the Supervisory Board must be inde-
pendent. Some Supervisory Board members hold, or held in
the past year, high-ranking positions at other companies with
which Siemens does business; nevertheless, our sales and
purchases of products and/or services to or from such compa-
nies are transacted on an arm’s length basis. We believe that
these dealings do not compromise the independence of the
relevant Supervisory Board members.
The Supervisory Board oversees and advises the Managing
Board in its management of the Company ’s business. At regu-
lar intervals, it discusses business development, planning,
strategy and implementation. It also discusses Siemens’ quar-
terly and half-yearly reports and approves the annual stand-
alone financial statements of Siemens AG as well as the Con-
solidated Financial Statements of Siemens, taking into account
both the audit reports issued by the independent auditors
thereon and the results of the review conducted by the Audit
Committee. In addition, it is responsible for monitoring the
Company ’s adherence to provisions of law, official regulations
and internal Company policies (compliance); the Compliance
Committee performs the compliance duties assigned to it by a
decision of the Supervisory Board and by the Bylaws for the
Compliance Committee. In addition, the Supervisory Board
appoints the members of the Managing Board and determines
each member’s duties. Important Managing Board decisions –
such as major acquisitions, divestments and financial mea-
sures – require Supervisory Board approval, unless the Bylaws
for the Supervisory Board specify that such approval is given
by the Finance and Investment Committee instead. In the By-
laws for the Managing Board, the Supervisory Board has estab-
Corporate Governance report