Audi 2012 Annual Report Download - page 268

271
Corporate Governance Report
271 Corporate governance
273 Corporate management
declaration
273 Compliance
274 Risk management
275 Communication and
transparency
275 System of remuneration for
the Supervisory Board and
Board of Management
276 Mandates of the
Board of Management
277 Mandates of the
Supervisory Board
CORPORATE GOVERNANCE
German Corporate Governance Code in 2012
On June 15, 2012, the Federal Ministry of Justice announced a new version of the German Cor-
porate Governance Code dated May 15, 2012, in the official section of the German Federal Ga-
zette. The Board of Management and Supervisory Board of AUDI AG also discussed at length the
recommendations and suggestions in the Code during the past fiscal year and passed the appro-
priate resolutions.
Implementation of the recommendations and suggestions
The recommendations of the Code in the version dated May 26, 2010 were largely adhered to up
until the announcement of the version dated June 15, 2012. As per the restrictions, however,
the Supervisory Board has not formed a nominating committee (Section 5.3.3 of the Code) and
the elections to the Supervisory Board do not take the form of elections of individuals
(Section 5.4.3, Sentence 1 of the Code). Since November 23, 2009, a cap on severance payments
has been agreed when entering into new contracts with members of the Board of Management,
in compliance with Section 4.2.3 of the Code. However, contracts that were concluded prior to
this date remain unaffected by this rule due to the protection of vested rights.
Since the publication of the new version of the Code on June 15, 2012, its recommendations
have been adhered to with the following deviations:
There is no age limit applicable to members of the Company’s corporate bodies (Section 5.1.2,
Para. 2, Sentence 3 and Section 5.4.1, Para. 2, Sentence 1 of the Code). The ability to manage a
company successfully or to monitor the actions of the Board of Management in the capacity of a
Supervisory Board member in the requisite form does not cease to exist upon reaching a certain
age. Furthermore, imposing an age limit could constitute a form of discrimination.
In accordance with the recommendations, the Chair of the Audit Committee should be indepen-
dent (Section 5.3.2, Sentence 3 of the Code). It is possible that the fact that the Chairman of the
Audit Committee sits on the Board of Management of Volkswagen AG, Wolfsburg, and of Porsche
Automobil Holding SE, Stuttgart, could result in this independence not being guaranteed. It is the
view of the Board of Management and Supervisory Board that these activities do not represent a
conflict of interest and do not impair the work of the Chair of the Audit Committee. Due to the
lack of any clear definition of the concept of independence within the Code, this deviation is
explained here for purely precautionary reasons.
The Supervisory Board has not formed a nominating committee (Section 5.3.3 of the Code). It is
the Supervisory Board’s view that such a committee would merely increase the number of com-
mittees without having any tangible benefit as regards the Supervisory Board’s work.
In terms of the recommendations on the disclosure of certain circumstances in relation to the
nominations proposed by the Supervisory Board to the Annual General Meeting (Section 5.4.1,
Paras. 4 to 6 of the Code), the requirements set out in the Code are vague and not clearly
defined. Any deviation is therefore declared here purely as a precautionary measure, although
the Supervisory Board will strive to adhere to the Code’s recommendation.
Corporate Governance Report