Siemens 2010 Annual Report Download - page 90

6 To our shareholders 21 Corporate Governance
23 Corporate Governance report
29 Corporate Governance statement pursuant to §a
of the German commercial code (HGB) (part of the
Combined management’s discussion and analysis)
30 Compliance report
34 Compensation report (part of Notes to
Consolidated Financial Statements)
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A sufficient number of independent members shall belong
to the Supervisory Board. Material and not only temporary
conflicts of interest, such as organizational functions or ad-
visory capacities with major competitors of the Company,
shall be avoided. In addition, the Supervisory Board mem-
bers shall have sufficient time to be able to devote the neces-
sary regularity and diligence to their mandate.
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The age limitation established in the Bylaws of the Super-
visory Board will be taken into consideration. In addition,
no more than two former members of the Managing Board
of Siemens AG shall belong to the Supervisory Board.
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 carried out 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 reviews the annual stand-
alone financial statements of Siemens AG, the Consolidated
Financial Statements of Siemens worldwide, management’s
discussion and analysis of these financial statements and the
proposal for the appropriation of net income. It also discusses
Siemens’ quarterly and half-yearly reports and approves the
annual stand-alone financial statements of Siemens AG as well
as the Consolidated 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 monitor-
ing the Company’s adherence to statutory provisions, official
regulations and internal Company policies (compliance); the
Compliance Committee performs the compliance duties as-
signed to it by a decision of the Supervisory Board and pursu-
ant to the Bylaws for the Compliance Committee. Furthermore,
the Supervisory Board appoints the members of the Managing
Board and determines each member’s duties. Important
Managing Board decisions – such as major acquisitions, divest-
ments and financial measures – require Supervisory Board
approval, unless the Bylaws for the Supervisory Board specify
that such authority is delegated to the Finance and Investment
Committee of the Supervisory 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 mem-
bers, matters reserved for the Managing Board as a whole, and
the required majority for Managing Board decisions.
The Supervisory Board currently has six committees whose
duties, responsibilities and procedures fulfill the requirements
of the Code, reflect applicable SOA requirements and incorpo-
rate applicable NYSE rules, as well as certain NYSE rules with
which Siemens AG complies voluntarily. Each committee’s
chairperson provides the Supervisory Board with regular re-
ports regarding the activities of the relevant committee.
The Chairman’s Committee comprises the Chairman and
Deputy Chairmen of the Supervisory Board as well as one fur-
ther employee representative to be elected by the Supervisory
Board and performs the collective tasks of a “nominating, com-
pensation and corporate governance committee” to the extent
that such tasks are not performed by the Nominating Commit-
tee or German law requires such tasks to be performed by the
Supervisory Board in full session. In particular, the Chairman‘s
Committee makes proposals regarding the appointment and
dismissal of Managing Board members, handles contracts with
members of the Managing Board, prepares the determination
of the Managing Board compensation and the review of the
Managing Board compensation system at the Supervisory
Board’s plenary board meetings. In preparing recommenda-
tions on the appointment of Managing Board members, the
Chairman’s Committee takes into account a candidate’s profes-
sional qualifications, international experience and leadership
qualities, the long-range plans for succession as well as diver-
sity, and the composition of the Managing Board regarding an
appropriate consideration of women. The Chairman’s Commit-
tee is responsible for reviewing the Company’s corporate gov-
ernance guidelines, submits recommendations for their im-
provement and prepares the proposal regarding the Declara-
tion of Conformity with the Code by the Supervisory Board.
Furthermore, the Chairman’s Committee submits recommen-
dations regarding the composition of Supervisory Board com-
mittees to the Supervisory Board and decides whether to ap-
prove business transactions with Managing Board members
and parties related to them.