BMW 2010 Annual Report Download - page 11

changes in, management positions held by women, in particular below senior executive level and at uppermost manage-
ment level. When actually selecting an individual for a post on the Board of Management, the Supervisory Board
will decide in the best interests of the Company and after taking account of all relevant circumstances.
For its own composition, the Supervisory Board has drawn up specifi c criteria, which are described in the Corporate
Governance Report (pages 153 et seq.). A conscious decision has been taken to set out a detailed composition profi le for
the Supervisory Board based on a profi le previously drawn up and used by the Nomination Committee, which has now
been expanded and applied to the entire Supervisory Board.
Examining and improving the e ciency of the Supervisory Board’s work is seen as an ongoing task, one key element
of which is to engage in open and constructive dialogue within the Supervisory Board and in dealings with the Board
ofManagement. In a separate discussion, the full Supervisory Board also discussed its own e ciency. Our preparations
for the discussion were based on the results of a questionnaire previously devised and distributed by the members of
the Supervisory Board in advance of the meeting.
There was no indication of any confl icts of interest on the part of members of the Supervisory Board or the Board of
Management during the past year. The nature and scale of signifi cant transactions with related parties as defi ned by IAS24
is tested with the aid of a questionnaire which members of both boards are required to complete on a quarterly basis.
The questionnaire also covers transactions with close family members and intermediary entities (see pages128 et seq.).
Each of the fi ve Supervisory Board meetings in 2010 was attended by at least 90% of its members (18 out of 20), a
fact that can be tied in to the analysis of attendance fees for individual members disclosed in the Compensation Report
(see pages 154 et seq.). One member was unable to attend three meetings during the fi nancial year 2010 due to illness.
Presiding Board and committee meetings were fully attended (see page 152).
Description of Presiding Board activities and committee work In a total of four meetings, the Presiding Board fo-
cused
mainly on the preparation of specifi c topics for the meetings of the full Supervisory Board unless such preparation fell
under the remit of one of the committees. The Presiding Board selected additional topics for Supervisory Board meetings
and made suggestions to the Board of Management regarding items to be included in its reports to the full Supervisory Board.
The Audit Committee convened four times during the reporting period 2010. In accordance with a recommendation
by the German Corporate Governance Code, the Group’s three interim reports in 2010 were discussed (in telephone
conferences) with the Board of Management prior to publication. Representatives of the external auditors were present
for part of the time at the telephone conference held to present the Half-Year Financial Report. The report had been
subjected to review by the external auditors.
One meeting of the Audit Committee dealt in particular with preparations for the Supervisory Board meeting at the be-
ginning of 2010 at which the fi nancial statements were examined. Before giving the full Supervisory Board its recommenda-
tions for nominations for election at the Annual General Meeting and engaging the external auditor for the fi nancial year
2010, the Audit Committee obtained a Declaration of Independence from the proposed external auditor. The fee proposals
for the audit of the year-end fi nancial statements and for the review of the half-year fi nancial report were deemed appropriate
by the Audit Committee. After the Annual General Meeting 2010, the Audit Committee appointed the external auditor for the
fi nancial year 2010 and, taking the suggestions of the full Supervisory Board into account, specifi ed areas of audit emphasis,
including accounting policy changes in the HGB fi nancial statements as a result of the German Accounting Law Modernisa-
tion Act (BilMoG), the measurement of warranty provisions and the accounting treatment of derivative fi nancial instruments.
With a view to ensuring the independence of the external auditor, the Audit Committee had previously considered the
scope of non-audit services provided by KPMG entities to the BMW Group and set out guidelines for the future withre-
spect to non-audit and audit-related services. There were no indications of lack of independence or grounds for exclusion.
Other areas of emphasis covered by the Audit Committee were the risk management system (including additional
notifi cation requirements as part of the internal reporting process), the current risk profi le and the level of risk provision.
In this context, the Board of Management also reported to the Audit Committee on changes in the internal control system
within the Group, in particular with respect to fi nancial reporting processes.
The Chairman of the BMW Group Compliance Committee reported to the Audit Committee on the current com-
pliance
situation, which was deemed satisfactory. The Audit Committee took a particular interest in the fi rst full set of
compliance reports for the 2009 fi nancial year, which included feedback from 132 BMW Group compliance o cers, as
09 REPORT OF THE SUPERVISORY BOARD