Audi 2015 Annual Report Download - page 202

CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE
/GERMAN CORPORATE GOVERNANCE CODE IN 2015
On June 12, 2015, the Federal Ministry of Justice announced a
new version of the German Corporate Governance Code dated
May 5, 2015, in the official section of the Bundesanzeiger
(Federal Gazette). The Board of Management and Supervisory
Board of AUDI AG also discussed at length the recommenda-
tions and suggestions in the Code during the past fiscal year
and passed the appropriate resolutions.
/IMPLEMENTATION OF THE RECOMMENDATIONS
AND SUGGESTIONS
The Board of Management and Supervisory Board of AUDI AG
hereby declare that AUDI AG has complied with the recom-
mendations of the “Government Commission on the German
Corporate Governance Code” as amended on June 24, 2014,
published by the Federal Justice Ministry in the official part of
the Bundesanzeiger (Federal Gazette) during the period since
the last compliance statement issued on November 27, 2014,
and up until the entry into force on June 12, 2015, of the Code
as amended on May 5, 2015, with the following exceptions:
>4.2.3, para. 2, sentence 6 (caps for the overall compensation
of members of the Board of Management and for the varia-
ble compensation components);
>5.1.2, para. 2, sentence 3, 5.4.1, para. 2, sentence 1 (age
limit for members of the Board of Management and of the
Supervisory Board);
>5.3.2, sentence 3 (independence of the Audit Committee
Chairman);
>5.3.3 (nominating committee);
>5.4.1, para. 4 through 6 (disclosures in making election
recommendations);
>5.4.2, sentence 3 (Not more than two former members of
the Board of Management shall be members of the Supervi-
sory Board) until April 25, 2015;
>5.4.6, para. 2, sentence 2 (performance-related compensa-
tion of the Supervisory Board).
In reference to the recommendation formulated in number
4.2.3, para. 2, sentence 6 of the German Corporate Govern-
ance Code, the Supervisory Board believes that caps for the
overall compensation of the members of the Board of Man-
agement and for the variable compensation components are
generally useful and will develop and implement such caps.
Until then, an exception is declared.
The Board of Management and the Supervisory Board feel that
an age limit is not appropriate. The ability to successfully
manage a company, or to supervise the Board of Management
or the Supervisory Board in their management activities as
required is not lost upon reaching a certain age.
According to recommendation no. 5.3.2, sentence 3, the
Chairman of the Audit Committee shall, among other things,
be “independent.” The Audit Committee Chairman’s member-
ship in the Board of Management of Volkswagen AG and of
Porsche Automobil Holding SE may be indicative of a lack of
independence as defined in the recommendations. In the view
of the Board of Management and of the Supervisory Board,
these activities neither give rise to a conflict of interest, nor do
they have an adverse effect on the work of the Chairman of the
Audit Committee. As the notion of independence is not clearly
defined in the Code, we are declaring this exception merely as
a precaution.
A nominating committee would, in the view of the Supervisory
Board, only increase the number of committees without, how-
ever, leading to a noticeable improvement in the work of the
Board.
Regarding the recommendation set forth in no. 5.4.1, para. 4
through 6, on the disclosure of certain circumstances when the
Supervisory Board makes election recommendations to the
General Meeting, the requirements in the Code are vague and
not clearly defined. An exception is therefore declared merely
as a precaution, while the Supervisory Board will endeavor to
fulfill the recommendation of the Code.
CORPORATE GOVERNANCE REPORT