BMW 2002 Annual Report Download - page 40

39
For first-time appointments the maximum
possible appointment period of five years is not the
general rule. A re-appointment prior to one year
before the end of the appointment period with a
simultaneous termination of the current appoint-
ment only takes place under special circumstances.
An age limit for members of the Board of Manage-
ment has been specified.
The Supervisory Board has issued Terms of
Reference for itself.
4.2 Tasks and authorities of the Chairman of
the Supervisory Board
The Chairman of the Supervisory Board coordinates
work within the Supervisory Board and chairs its
meetings.
The Chairman of the Supervisory Board also
chairs the committees that handle contracts with
members of the Board of Management and prepares
the Supervisory Board meetings.
The Chairman of the Supervisory Board main-
tains regular contact with the Board of Management,
in particular, with the Chairman of the Board of Man-
agement and consults on the strategy, business
development and risk management of the BMW
Group. The Chairman of the Supervisory Board is
informed by the Chairman of the Board of Manage-
ment without delay of important events which are
essential for an assessment of the situation and
development of the enterprise as well as for the
management of the enterprise. The Chairman of
the Supervisory Board then informs the Supervisory
Board and, if required, convenes an extraordinary
meeting of the Supervisory Board.
4.3 Formation of committees
The Supervisory Board has set up committees with
sufficient expertise based on the specific require-
ments of the BMW Group. Such committees serve
to increase the efficiency of the Supervisory Boards
work and the handling of complex issues. The com-
mittee chairpersons report regularly to the Super-
visory Board on the work of the committees.
The Supervisory Board has set up an Audit
Committee (Bilanzausschuss) which handles, in
particular, issues of accounting and risk management
as well as auditor independence, the issuing of the
audit mandate to the auditor, the determination of
auditing focal points and the fee agreement.
4.4 Composition and compensation of the
Supervisory Board
For nominations for the election of members of the
Supervisory Board, care is taken that the Super-
visory Board is composed, at all times, of members
who have the required knowledge, abilities and
expert experience to complete their tasks properly
and who are sufficiently independent. Regard is also
given to international activities of the BMW Group,
potential conflicts of interest and the age limit stipu-
lated for members of the Supervisory Board.
In order to ensure that the Supervisory Board
can supervise and advise the Board of Management
independently, not more than two former members
of the Board of Management may be members of
the Supervisory Board. Supervisory Board members
may not exercise directorships or similar positions
or advisory tasks for important competitors of the
BMW Group.
All members of the Supervisory Board of BMW
AG must ensure that they have sufficient time to
perform their mandate. If members of the Super-
visory Board of BMW AG are members of the Board
of Management of a listed company, they may not
accept more than four additional Supervisory Board
mandates in listed companies. Supervisory Board
mandates in subsidiaries of the company where the
Supervisory Board member of BMW AG is a mem-
ber of the Board of Management are not included
in this maximum number.
The compensation of the members of the
Supervisory Board is specified in the Articles of
Association of BMW AG and takes into account
the responsibilities and scope of tasks of the
members of the Supervisory Board as well as
the economic situation and performance of the
BMW Group. Chairmanship and deputy chairman-
ship of the Supervisory Board including chair-
manship
of and membership in committees are
taken into account. Members of the Supervisory
Board receive fixed as well as performance-related
compensation.