BMW 2010 Annual Report Download - page 142

140
140 STATEMENT ON
CORPORATE GOVERNANCE
(Part of Management Report)
140 Information on the Company’s
Governing Constitution
142 Declaration of the Board of
Management and of the
Supervisory
Board pursuant to
§ 161 AktG
143 Members of the Board of
Management
144 Members of the Supervisory Board
147 Information on Work Procedures
of the Management Board and
Supervisory Board
154 Compensation Report
162 Information on Corporate
Governance Practices
163 Compliance in the BMW Group
STATEMENT ON CORPORATE GOVERNANCE
Corporate governance – acting in accordance with the
principles of responsible management aimed at increasing
the value of the business on a sustainable basis – is a
comprehensive issue for the BMW Group embracing all
areas of the enterprise. Corporate culture within the
BMW Group is founded on transparent reporting and
internal communication, a policy of corporate govern-
ance aimed at the interests of stakeholders, fair and open
dealings between the Board of Management, the Super-
visory Board and employees and compliance with the
law. The Board of Management reports in this declaration,
also on behalf of the Supervisory Board, on important
aspects of corporate governance pursuant to § 289 a HGB
and section 3.10 of the German Corporate Governance
Code (GCGC).
Information on the Company’s Governing Constitution
The designation “BMW Group” comprises Bayerische
Motoren Werke Aktiengesellschaft (BMW AG) and its
group entities. BMW AG is a stock corporation (Aktien-
gesellschaft) based on the German Stock Corporation Act
(Aktiengesetz). It has three representative bodies: the
Annual General Meeting, the Supervisory Board and the
Board of Management. The duties and authorities of
those bodies derive from the Stock Corporation Act and
the Articles of Incorporation of BMW AG. Shareholders,
as the owners of the business, exercise their rights at the
Annual General Meeting. The Annual General Meeting
decides in particular on the utilisation of unappropriated
profit, the ratification of the acts of the members of the
Board of Management and of the Supervisory Board, the
appointment of the external auditor, changes to the
Articles of Incorporation, specified capital measures and
elects the shareholders’ representatives to the Supervi-
sory Board. The Board of Management manages the en-
terprise under its own responsibility. Within this frame-
work, it is monitored and advised by the Supervisory
Board. The Supervisory Board appoints the members of
the Board of Management and can, at any time, revoke an
appointment if there is an important reason. The Board
of Management keeps the Supervisory Board informed
ofall significant matters regularly, promptly and compre-
hensively, following the principles of conscientious and
faithful accountability and in accordance with prevailing
law and the reporting duties allocated to it by the Super-
visory Board. The Board of Management requires the
approval of the Supervisory Board for certain major trans-
actions. The Supervisory Board is not, however, author-
ised to undertake management measures itself.
In accordance with the requirements of the German
Co-determination Act for companies that generally em-
ploy more than 20,000 people, the Supervisory Board of
BMW AG is required to comprise ten shareholder repre-
sentatives elected at the Annual General Meeting (Super-
visory Board members representing equity or share-
holders) and ten employees elected in accordance with
the provisions of the Co-determination Act (Supervisory
Board members representing employees). The ten Super-
visory Board members representing employees comprise
seven Company employees, including one senior staff
representative, and three members elected following
nomination by unions.
The close interaction between Board of Management
and Supervisory Board in the interests of the enterprise
as described above is also known as a “two-tier board
structure”.
The composition of the Board of Management the Su-
pervisory Board and of any sub-committees established
by the Supervisory Board is disclosed on pages 143 et
seq. of the Annual Report. Further information on the
work procedures of the Board ofManagement and the
Supervisory Board can be found on pages 147 et seq.
Declaration of Compliance and the BMW Group
Corporate Governance Code
Management and supervisory boards of companies listed
in Germany are required by law (§ 161 German Stock
Corporation Act) to report once a year on whether the
officially published and relevant recommendations
is-
sued by the “German Government Corporate Govern-
ance
Code Commission”, as valid at the date of the de-
claration, have been, and are being, complied with.
Companies affected are also required to state which of
the recommendations of the Code have not been or are
not being applied, stating the reason or reasons.
At the joint meeting held in December 2010, the Board of
Management and Supervisory Board of BMW AG issued
the annual Declaration of Compliance and posted it on
the BMW Group’s website. In accordance with that decla-
ration, in future BMW AG will comply with the recom-
mendations published on 2 July 2010 in the electronic
Federal Gazette (Code version dated 26 May 2010) with-
out exception.
In the past the Board of Management and the Super-
visory Board have adopted the Group’s own Corporate
Governance Code based on the GCGC in order to pro-
vide interested parties with a comprehensive and stand-
alone document covering the corporate governance
practices applied by the BMW Group. The BMW Group’s