Siemens 2011 Annual Report Download - page 127

51 C. Combined management’s discussion and analysis 273 E. Additional information 153 D. Consolidated Financial Statements
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en. The Chairman’s Committee is responsible for reviewing
the Company ’s corporate governance guidelines, submits rec-
ommendations for their improvement and prepares the reso-
lution regarding the Declaration of Conformity with the Code
by the Supervisory Board. Furthermore, the Chairman’s Com-
mittee submits recommendations regarding the composition
of Supervisory Board committees to the Supervisory Board
and decides whether to approve business transactions with
Managing Board members and parties related to them.
The Audit Committee comprises the Chairman of the Super-
visory Board, two of the Supervisory Board’s shareholder rep-
resentatives and three of the Supervisory Board’s employee
representatives. Under German law, the Audit Committee
must include at least one independent member of the Super-
visory Board who has knowledge and experience in the appli-
cation of accounting principles or the auditing of financial
statements. The Chairman of the Audit Committee, Hans
Michael Gaul, satisfies these German statutory requirements.
The Supervisory Board has designated Mr. Gaul – in addition
to Gerhard Cromme – as an ”audit committee financial expert,”
as defined by the SOA and the regulations of the SEC. The Au-
dit Committee oversees the accounting process. It prepares
the Supervisory Board’s recommendation to the Annual Share-
holders’ Meeting concerning the election of the independent
auditors and submits the corresponding proposal to the full
Supervisory Board. Furthermore, in addition to the work per-
formed by the independent auditors, the Audit Committee dis-
cusses the Company ’s financial statements prepared quarter-
ly, half-yearly and annually by the Managing Board. On the ba-
sis of the independent auditors’ report on the annual financial
statements, the Audit Committee makes, after its own review,
recommendations to the Supervisory Board about whether or
not to approve the Annual Financial Statements of Siemens
AG and the Consolidated Financial Statements of Siemens
worldwide. It concerns itself with the Company ’s risk moni-
toring system and oversees the effectiveness of the internal
control system, in particular as it relates to financial reporting,
the risk management system and the internal audit system.
The Internal Audit Department reports regularly to the Audit
Committee. The Audit Committee awards the audit contract to
the independent auditors elected by the Annual Shareholders’
Meeting and monitors the independent audit of financial
statements, including in particular the independence and pro-
fessional expertise of the independent auditors as well as the
independent auditors’ services, and performs the other func-
tions assigned to it under the SOA.
The Compliance Committee comprises the Chairman of the
Supervisory Board, two of the Supervisory Board’s sharehold-
er representatives and three of the Supervisory Board’s em-
ployee representatives. The Compliance Committee concerns
itself with the Company ’s adherence to statutory provisions,
official regulations and internal Company policies.
The Nominating Committee, which comprises the Chairman
of the Supervisory Board and two of the Supervisory Board’s
shareholder representatives, is responsible for making recom-
mendations to the Supervisory Board’s shareholder represen-
tatives on the shareholder candidates for election to the Su-
pervisory Board by the Annual Shareholders’ Meeting. In pre-
paring these recommendations, it shall take into consider-
ation that the candidates must possess the knowledge,
abilities and experience needed to perform their duties and
that they must be independent, and it shall also pay attention
to diversity and in particular to an appropriate participation of
women.
The Mediation Committee, comprising the Chairman of the
Supervisory Board, the First Deputy Chairman (who is elected
in accordance with the German Codetermination Act), one of
the Supervisory Board’s shareholder representatives and one
of the Supervisory Board’s employee representatives, submits
proposals to the Supervisory Board in the event that the Su-
pervisory Board cannot reach the two-thirds majority required
for the appointment or dismissal of Managing Board mem-
bers.
The Finance and Investment Committee comprises the
Chairman of the Supervisory Board, three of the Supervisory
Board’s shareholder representatives and four of the Superviso-
ry Board’s employee representatives. It shall – based on the
Company ’s overall strategy, which is the focus of an annual
strategy meeting of the Supervisory Board – prepare discus-
sions and resolutions of the Supervisory Board on questions
relating to the financial situation and structure of the Compa-
ny as well as on fixed asset and financial investments. In addi-
tion, the Supervisory Board has delegated the authority to de-
cide on the approval of transactions and measures, which
would require the approval of the Supervisory Board, but the
value of which is below € million, to the Finance and In-
vestment Committee. The Finance and Investment Commit-
tee also exercises the rights of the Supervisory Board pursu-
ant to Section 32 of the German Codetermination Act to make
decisions regarding the exercise of ownership rights resulting
from interests in other companies. Section 32 (1) sentence 2 of