Siemens 2012 Annual Report Download - page 117

49 C. Combined Management Report 239 E. Additional Information 135 D. Consolidated Financial Statements

Board is determined in accordance with the German Codeter-
mination Act, which stipulates that one-half of the required
 Super visory Board members are to be elected by our em-
ployees in Germany. The Chairman of the Supervisory Board is
entitled to cast a deciding vote when the Supervisory Board is
unable to reach a decision in two separate rounds of voting.
... 
In contrast to the NYSE Standards, which require a board of
directors to affirmatively determine the independence of the
individual directors with reference to specific tests of indepen-
dence, German law does not require the Supervisory Board to
make such affirmative findings on an individual basis. German
law requires an audit committee to include at least one in-
dependent supervisory board member with knowledge and
experience in the application of accounting principles or the
auditing of financial statements. In addition, the Bylaws for
Siemens’ Supervisory Board contain several provisions to help
ensure the independence of our Supervisory Board’s advice
and supervision. Furthermore, the members of our Super-
visory and Managing Boards are strictly independent of one
another: a member of one board is legally prohibited from be-
ing concurrently active on the other. Our Supervisory Board
members have independent decision-making authority and
are legally prohibited from following any direction or instruc-
tion. Moreover, they may not enter into consulting, service or
certain other contracts with Siemens, unless approved by the
Supervisory Board. We also use the independence criteria of
the Code as guiding principles.
... 
In contrast to the NYSE Standards, which require the creation
of several specific board committees, composed of indepen-
dent directors and operating pursuant to written charters that
define their tasks and responsibilities, the Supervisory Board
of Siemens AG has assigned many of the functions of a nomi-
nating, compensation and corporate governance committee to
its Chairman’s Committee and has delegated part of the re-
maining functions to its Nominating Committee. Neverthe-
less, certain responsibilities – for example, the determination
of the compensation of the members of the Managing Board –
have not been delegated to a committee because German law
requires that these functions be performed by the full Super-
visory Board. The Audit Committee, the Chairman’s Committee
and the Compliance Committee have written bylaws – adopted
by the Supervisory Board – that define their respective tasks
and responsibilities. The NYSE Standards were taken into con-
sideration in drawing up these bylaws.
The Audit Committee of Siemens AG is subject to the require-
ments of the SOA and the U.S. Securities Exchange Act of ,
as these apply to a foreign private issuer, and performs – in co-
operation with the Compliance Committee – functions similar
to those assigned to an audit committee by the NYSE Stan-
dards. Nevertheless, German law prohibits delegating certain
responsibilities – such as the selection of independent audi-
tors (who, under German law, must be elected at the share-
holders’ meeting) – to a committee.
The Supervisory Board of Siemens AG also has a Finance and
Investment Committee and a Mediation Committee, the latter
of which is required under German law. Neither of these com-
mittees is required by the NYSE Standards.
...    
 ;  
The NYSE Standards generally require that the domestic, i.e.
U.S. companies listed on the NYSE obtain shareholder approv-
al of all equity compensation plans (including stock option
plans) and of any material revisions to such plans. Under
German law, the creation of authorized or contingent capital
in order to issue shares requires approval by our shareholders.
Shareholders must also approve of the key points of a stock op-
tion plan as part of a decision regarding the creation of contin-
gent capital or the authorization to repurchase and use
Siemens shares for servicing a stock option plan.
Under German law, share buybacks generally require prior
shareholder authorization. Such authorization was last given
at our Annual Shareholders’ Meeting on January , , and
this matter will, as a general rule, be voted upon at the expira-
tion of each authorization.