BMW 2011 Annual Report Download - page 162

162
152 STATEMENT ON
CORPORATE GOVERNANCE
(Part of Management Report)
152 Information on the Company’s
Governing Constitution
153 Declaration of the Board of
Management and of the
Supervisory Board pursuant to
§ 161 AktG
154 Members of the Board of
Management
155 Members of the Supervisory Board
158 Work Procedures of the
Board of Management
160 Work Procedures of the
Supervisory Board
165 Compensation Report
173 Information on Corporate
Governance Practices
175 Compliance in the BMW Group
In line with the terms of reference for the activities of
the plenum, the Supervisory Board has also set terms of
reference for the Presiding Board and the various com-
mittees. The committees are only quorate if all members
are present. Resolutions taken by the committees are
passed by simple majority unless stipulated other wise
by law. Minutes are also taken at the meetings and for
the resolutions of the committees and the Presiding
Board, and signed by the person chairing the particular
meeting. This person also represents the committee in
any dealings it may have with the Board of Management
or third parties.
Members of the Supervisory Board may not delegate
their duties. The Supervisory Board, the Presiding Board
and committees may call on experts and other suitably
informed persons to attend meetings to give advice on
specific matters.
The Supervisory Board, the Presiding Board and the
committees
also meet without the Board of Manage-
ment if necessary.
BMW AG ensures that the Supervisory Board and its
committees are sufficiently equipped to carry out their
duties. This includes the services provided by a cen-
tralised secretariat to support the chairmen in coordi-
nating
the work of the Supervisory Board.
In accordance with the relevant terms of reference, the
Presiding Board comprises the Chairman of the Super-
visory Board and board deputies. The Presiding Board
prepares Supervisory Board meetings to the extent that
the subject matter to be discussed does not fall within
the remit of a committee. This includes, for example,
preparing the annual Declaration of Compliance with
the German Corporate Governance Code, and the Super-
visory Board’s efficiency examination.
The Personnel Committee prepares the decisions of the
Supervisory Board with regard to the appointment and
revocation of appointment of members of the Board of
Management and, together with the full Supervisory
Board and the Board of Management, ensures that long-
term successor planning is in place. For information re-
garding the criteria applied, see page 164. The Personnel
Committee also prepares the decisions of the Super-
visory Board with regard to the Board of Management’s
compensation and the Supervisory Board’s regular
re-
view of the Board of Management’s compensation
system. In conjunction with the resolutions taken by
the Supervisory Board regarding the compensation of
the Board of Management, the Personnel Committee
is responsible for drawing up, amending and revoking
service /employment contracts or, when necessary,
other relevant contracts with members of the Board of
Management. In specified cases, the Personnel Commit-
tee also has the authority to give the necessary approval
for a particular transaction (instead of the Supervisory
Board). This includes loans to members of the Board of
Management or Supervisory Board, specified contracts
with members of the Supervisory Board (in each case
taking account of the consequences of related-party
transactions), as well as other activities of members of
the Board of Management, including the acceptance of
non-BMW Group supervisory mandates.
The Audit Committee deals in particular with issues
relating to the supervision of the financial reporting
process, the effectiveness of the internal control system,
the risk management system, internal audit arrange-
ments and compliance. It also monitors the external
audit, auditor independence and any additional work
performed by the external auditor. It prepares the pro-
posal for the election of the external auditor at the
Annual General Meeting, makes a recommendation re-
garding the election of the external auditor, issues the
audit engagement letter and agrees on points of empha-
sis as well as the auditor’s fee. The Audit Committee
prepares the Supervisory Board’s resolution relating to
the Company and Group Financial Statements and
discusses interim reports with the Board of Manage-
ment before publication. The Audit Committee also
decides on the Supervisory Board’s agreement to use
the Authorised Capital 2009 (Article 4 no. 5 of the
Articles
of Incorporation) and on amendments to the
Articles of Incorporation which only affect its wording.
In line with the recommendations of the German Cor-
porate Governance Code, the Chairman of the Audit
Committee is independent and not a former Chairman
of the Board of Management and has specific know-
how and experience in applying financial reporting
standards and internal control procedures. He also ful-
fils the requirements of being an independent financial
expert as defined by §
100 (5) and § 107 (4) AktG.
The Nomination Committee is charged with the task of
finding suitable candidates for election to the Super-
visory
Board (as shareholder representatives) and for in-
clusion
in the Supervisory Board’s proposals for elec-
tion at the Annual General Meeting. In line with the
recommendations of the German Corporate Governance
Code, the Nomination Committee comprises only share-
holder representatives.
The establishment and composition of a mediation com-
mittee are required by the German Co-determination
Act. The Mediation Committee has the task of making
proposals to the Supervisory Board if a resolution for
the appointment of a member of the Board of Manage-
ment
has not been carried by the necessary two-thirds