Siemens 2013 Annual Report Download - page 120

92 A. To our Shareholders 117 B. Corporate Governance
118 B.1 Corporate Governance Report
124 B.2 Corporate Governance statement pursuant to
Section 289a of the German Commercial Code
(part of the Combined Management Report)
126 B.3 Compliance Report
129 B.4 Compensation Report
(part of the Combined Management Report)
148 B.5 Takeover-relevant information (pursuant to
Sections 289 para. 4 and 315 para. 4 of the
German Commercial Code) and explanatory report
(part of the Combined Management Report)

Siemens AG complies with the currently applicable recommen-
dations of the German Corporate Governance Code (Code) in
the version of May 13, 2013.
The Managing Board and the Supervisory Board of Siemens AG
have discussed compliance with the Code’s recommendations
in detail. Based on their deliberations, the boards have approved
the annual Declaration of Conformity as of October 1, 2013
with two supplementary explanations regarding compliance
with certain recommendations. This document is posted on
our website and presented in chapter B. CORPORATE GOVER-
NANCE STATEMENT PURSUANT TO SECTION A OF THE GERMAN COM-
MERCIAL CODE on page 124 of this Annual Report.
Siemens voluntarily complies with the Code’s non-binding
suggestions, with the following exceptions:
> According to the revised Section 3.7 para. 3, in the case of a
takeover offer, the Management Board should convene an
extraordinary General Meeting at which shareholders dis-
cuss the takeover offer and may decide on corporate actions
(previously: only in appropriate cases). The convening of a
shareholders’ meeting – even taking into account the short-
ened time limits stipulated in the German Securities Acqui-
sition and Takeover Act (WpÜG) – is an organizational chal-
lenge for large publicly listed companies. It appears doubtful
whether the associated effort is justified in cases where no
relevant decisions by the shareholders’ meeting are intend-
ed. Therefore, extraordinary shareholders’ meetings shall, as
in the past, be convened only in appropriate cases.
> Since the Managing Board appointments made in 2011, the
suggestion in Section 5.1.2 para. 2 sentence 1 of the Code
that the maximum possible appointment period of five years
should not be the rule for first-time appointments to the
Management Board has not been followed.
Our listing on the New York Stock Exchange (NYSE) subjects us
to a number of provisions under U.S. securities laws (including
the Sarbanes-Oxley Act, SOA) as well as to the rules and regu-
lations of the U.S. Securities and Exchange Commission (SEC)
and the NYSE. To, inter alia, facilitate our compliance with the
SOA, we have, among other things, established a Disclosure
Committee, comprising the heads of a number of our Corpo-
rate Units. This committee is responsible for reviewing certain
financial and non-financial information and advising our Man-
aging Board in its decisions regarding disclosure. We also have
procedures in place that require the members of the manage-
ment of our Sectors, Divisions, Financial Services, Cross-Sector
Services, Regional Clusters and certain Corporate Units – sup-
ported by certifications provided by the management of enti-
ties under their direction – to confirm the correctness of the
financial data that they have reported to Siemens’ corporate
B.1 Corporate Governance Report
headquarters and the effectiveness of the related control sys-
tems. Their confirmation provides a basis for our CEO and CFO
to certify our financial statements to the SEC. Consistent with
the requirements of the SOA, we have procedures for handling
accounting complaints in place as well as a Code of Ethics for
Financial Matters. This Code of Ethics for Financial Matters
was last updated in 2010.
B.1.1 Management and control structure
B... SUPERVISORY BOARD
Siemens AG is subject to German corporate law. It has a two- tier
board structure, consisting of a Managing Board and a
Supervisory Board. As required by the German Codetermination
Act (Mitbestimmungsgesetz), the Company ’s shareholders and
its employees each select one-half of the Supervisory Board’s
members. The term of office of the members of the Supervisory
Board will expire at the close of the Annual Shareholders’ Meet-
ing 2018. As successor to Dr. Josef Ackermann, who resigned
from the Supervisory Board effective September 30, 2013, Jim
Hagemann Snabe has been appointed to the Supervisory Board
by court order in accordance with Section 5.4.3 sentence 2 of the
Code until the end of the Annual Shareholders‘ Meeting 2014.
The Supervisory Board most recently amended the objectives
for its composition in line with Section 5.4.1 of the Code in fis-
cal 2012. Due to the new election of shareholder and employee
representatives, which took effect at the end of the Annual
Shareholders‘ Meeting on January 23, 2013, the Supervisory
Board modified these objectives at its meeting on September
18, 2013, and reapproved them as follows:
> 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 multinational
company and safeguard the reputation of Siemens in public.
In particular, care shall be taken in regard to the personality,
integrity, commitment, professionalism and independence
of the individuals proposed for election. The goal is to en-
sure that, in the Supervisory Board, as a group, all know-
how and experience is available that is considered essential
in view of Siemens’ activities.
> Taking the company ’s international orientation into account,
care shall also be taken to ensure that the Supervisory Board
has an adequate number of members with extensive inter-
national experience. Our goal is to make sure that the pres-
ent considerable share of Supervisory Board members with
extensive international experience is maintained.