BMW 2005 Annual Report Download - page 7

6
Report of the Supervisory Board
Partly as a result of changes to the German Cor-
porate Governance Code in 2005, the Supervisory
Board and Board of Management again devoted
time to corporate governance issues within the
BMW Group. The two boards issued Declarations
of Compliance with the German Corporate Gover-
nance Code pursuant to §161 of the German Stock
Corporation Act to the effect that, apart from a few
exceptions (see page 133), the recommendations
contained in the German Corporate Governance
Code in the version published on 4 July 2003 have
been complied with and that the recommendations
contained in the new version of the Code issued on
12 July 2005 are being complied with. On a related
note, the Supervisory Board also enquired into the
ramifications of the changed legal situation for BMW
from the beginning of 2006 brought about by the
new law, the Management Boards’ Compensation
Disclosure Act, and the various options open to it. At
its meeting in December 2005, the Supervisory
Board also questioned the effectiveness of its own
work and investigated ways of improving it.
At its constitutive meeting for the financial year 2004,
the Supervisory Board had established a total of
three new committees in addition to the Presiding
Board. The composition of these committees, which
remained unchanged in 2005, is shown on page
126. The Chairman
reported regularly to the Super-
visory Board on the status of committee work.
Meetings of the Presiding Board focused primarily
on preparations for Supervisory Board meetings, in
particular where complex issues were concerned.
The Presiding Board received reports on the implica-
tions of the German Corporate Integrity and Moderni-
sation
of the Contestation Act and considered the
changes to the Germany Corporate Governance
Code.
The Audit Committee convened twice during the
period under report. As part of the preparations
for the Supervisory Board meeting at which the
2004 financial statements were examined, the
Audit Committee also obtained a Declaration of
Independence from the firm of auditors subse-
quently elected as group auditors at the 2005
Annual General Meeting. It also determined the
areas of audit emphasis to be incorporated into the
audit engagement letter, including the first time
application of new and revised IFRSs in the financial
year 2005. Furthermore, the Audit Committee also
considered risk management issues, including the
assessment of currency risks.
In its five meetings, the Personnel Committee con-
sidered the composition of the Board of Manage-
ment and
specific contractual issues. It also evalu-
ated the appropriateness of the compensation of
the Board of Management, including a comparison
with other DAX companies. The Personnel Com-
mittee also received in-depth reports on human
resources management within the BMW Group.
The statutory Mediation Committee (§27 (3) of
the Law on Worker Participation) was not required
to convene during the financial year 2005.
The Annual and Group Financial Statements of
Bayerische Motoren Werke Aktiengesellschaft for
the year ended 31 December 2005 and the com-
bined Company and Group Management Report