Mercedes 2006 Annual Report Download - page 144

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Report of the Supervisory Board
128
In seven meetings during the 2006 financial year, the Supervisory
Board dealt in detail with the business situation of DaimlerChrysler
and the strategic development of the Group and its divisions.
In addition to several personnel decisions, numerous special topics
and issues requiring the consent of the Supervisory Board
had to be examined and decided upon, which were also discussed
and dealt with together with the Board of Management.
Cooperation between the Supervisory Board and the Board
of Management. In its meetings, the Supervisory Board was
regularly and fully informed by the Board of Management about
the situation of the Group, particularlyits business and financial
developments, personnel situation, investment plans and questions
of fundamental business policy and strategy. Outside the
meetings, the Board of Management presented the Group’s key
performance figures tothe Supervisory Board in the form of
monthly reports, and submitted in good time those issues requiring
the specific approval of the Supervisory Board.
The Supervisory Board approved these issues after reviewing
various documents, making inquiries with the Board of Management
and holding intensive discussions with the members of the
Board of Management. The Supervisory Board was also kept fully
informed of specific matters between its meetings, and in urgent
cases it was requested to pass its resolutions in writing. In addition,
the Chairman of the Board of Management informed the
Chairman of the Supervisory Board in regular individual discussions
about all important developments and upcoming decisions.
Issues discussed at the meetings in 2006. In the meeting held
in January 2006, the Supervisory Board dealt with the Board of
Management’s plans for a new management model within Daimler-
Chrysler AG, as well as the related adjustments to various areas
of responsibility of the members of the Board of Management.
The effects and consequences of these changes were discussed
intensively.
In the meeting held in February 2006, the Supervisory Board dealt
with the audited 2005 financial statements of DaimlerChrysler AG,
the 2005 consolidated financial statements, the 2005 manage-
ment report of DaimlerChrysler AG, the 2005 Group management
report and the proposal made by the Board of Management
on the appropriation of earnings; personnel issues were also dealt
with.
An extraordinary Supervisory Board meeting was convened in
March 2006 to discuss the development and current business
situation of the smart unit. The Supervisory Board was provided
with documentation describing the project, including possible
opportunities and risks and the background considerations. The
Supervisory Board dealt in particular with the fundamental
options for further procedureagainst the backdrop of the relevant
conditions and the required negotiations withemployee
representatives in Germanyand the Netherlands. As a result,
the SupervisoryBoardapproved the funds required for the
discontinuation of the smart forfour, as well as the unit’s focus
on the production of the smart fortwo and its full integration
into the Mercedes-Benz organization.
In April 2006, the Supervisory Board decided on financial
transactions connected with the Group’s equity interest in EADS.
In connection with the new management model, it also dealt
with the current status of integration of the functional areas, the
reduction of administrative costs by creating more streamlined
management structures, and the release of funds for the imple-
mentation of the new management model. Another issue discussed
at this meeting was the initiative for marketing diesel vehicles
in all the federal states of the USA (Clean Diesel), as well as the
importance of biofuels and BLUETEC technology. In line with
the principle of dealing with strategic issues in each meeting, the
Board of Management presented its strategy for the Truck Group
to the Supervisory Board. In addition to the regular reporting of the
Audit Committee, in this meeting the Supervisory Board also
received a report on the main provisions of the US Foreign Corrupt
Practices Act (FCPA) and on the progress of the investigation
by the SEC and the Department of Justice (DoJ). It also discussed
personnel and communication activities, the development
of a compliance organization and the work of the sales practices
hotline, and related training activities.