Siemens 2011 Annual Report Download - page 125

51 C. Combined management’s discussion and analysis 273 E. Additional information 153 D. Consolidated Financial Statements
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Siemens AG fully complies with the recommendations of the
German Corporate Governance Code (Code) in the version of
May 26, 2010, with the following single exception: The cur-
rently applicable rules for the compensation of the Superviso-
ry Board of Siemens AG, which were resolved by the Annual
Shareholders’ Meeting on January 25, 2011, and which are set
forth in the Articles of Association, contain – contrary to the
provisions of Section 5.4.6 para. 2 sentence 1 of the Code – no
performance-related compensation components.
The Managing Board and the Supervisory Board of Siemens
AG, respectively, discussed compliance with the Code’s rec-
ommendations. Based on these deliberations, the Boards ap-
proved an interim update of the Declaration of Conformity as
of December 7, 2010 and the annual Declaration of Conformity
as of October 1, 2011. Both documents are posted on our web-
site. The current Declaration of Conformity can be found on
page 31. It will continue to be updated as necessary.
Siemens voluntarily complies with the Code’s non-binding
suggestions, with the following exceptions:
> Due to the fact that the Supervisory Board compensation
has been changed, so that it now consists exclusively of
fixed compensation, the suggestion in Section 5.4.6 para. 2
sentence 2 of the Code, which provides that the perfor-
mance-related compensation of the members of the Super-
visory Board should also contain components based on the
long-term performance of the enterprise, can no longer be
followed.
> In fiscal 2011, the Supervisory Board decided to appoint Ro-
land Busch, Klaus Helmrich and Michael Süß to the Manag-
ing Board, each for a term of five years, and therefore to no
longer follow the suggestion set out in Section 5.1.2 para. 2
sentence 1 of the Code, according to which the maximum
possible appointment period of five years should not be the
rule for first-time appointments to a Managing Board.
Our listing on the New York Stock Exchange (NYSE) subjects
us to a number of provisions under U.S. securities laws (in-
cluding the Sarbanes-Oxley Act (SOA)) as well as to the rules
and regulations of the U.S. Securities and Exchange Commis-
sion (SEC) and the NYSE. To facilitate our compliance with
the SOA, we have, among other things, a Disclosure Commit-
tee, comprising the heads of our Corporate Units. This com-
mittee is responsible for reviewing certain financial and non-
financial information and advising our Managing Board in its
decision-making about disclosure. We also have procedures
in place that require the management of our Sectors, Divi-
sions, Financial Services, Cross-Sector Services, Regional
Clusters and certain Corporate Units, supported by certifica-
tions of management of entities under their responsibility, to
certify various matters, thereby providing a basis for our CEO
and CFO to certify our financial statements to the SEC. Con-
sistent with the requirements of the SOA, we have imple-
mented procedures for handling accounting complaints and
a Code of Ethics for Financial Matters, which was last updat-
ed in 2010.
B.. Management and
control structure
B... SUPERVISORY BOARD
As a German stock corporation, Siemens AG is subject to Ger-
man corporate law. It has a two-tier board structure, consist-
ing of a Managing Board and a Supervisory Board. As required
by the German Codetermination Act (Mitbestimmungsgesetz,
MitbestG), the Company ’s shareholders and its employees
each select one-half of the Supervisory Board’s members. The
term of office of the current members of the Supervisory
Board expires at the close of the Annual Shareholders‘ Meet-
ing in 2013.
In fiscal 2010, the Supervisory Board approved the following
goals regarding its composition pursuant to Section 5.4.1 of
the Code:
> The composition of the Supervisory Board of Siemens AG
shall be such that qualified control and advising for the
Managing Board is ensured. The candidates proposed for
election to the Supervisory Board shall have the expertise,
skills and professional experience necessary to carry out
the functions of a Supervisory Board member in a multina-
tional company and to safeguard the reputation of Siemens
in public. In particular, care shall be taken in regard to the
personality, integrity, commitment, professionalism and in-
dependence of the individuals proposed for election. The
goal is to ensure that, in the Supervisory Board as a whole,
all know-how and experience is available that is considered
essential in view of Siemens’ activities.
> Taking the Company ’s international orientation into ac-
count, care shall also be taken to ensure that the Superviso-
ry Board has an adequate number of members with exten-
sive international experience. The goal for the next Super-
visory Board election in 2013 is to make sure that the pres-
ent considerable share of Supervisory Board members with
international background is maintained.
B. Corporate Governance report