Mercedes 2008 Annual Report Download - page 121

Corporate Governance |Corporate Governance Report |117
The work of the Supervisory Board is coordinated by its chairman.
The Supervisory Board has formed four committees: the Presi-
dential Committee, the Nomination Committee, the Audit Com-
mittee and the Mediation Committee.
The Presidential Committee has particular responsibility for the
contractual affairs of the members of the Board of Management
and for determining the details of their individual remuneration. It
advises and decides on questions of corporate governance, on
which it also makes recommendations to the Supervisory Board.
In addition, the Presidential Committee supports and advises
the Chairman of the Supervisory Board and his deputy, and pre-
pares the meetings of the Supervisory Board.
The Nomination Committee, which is the only Supervisory Board
Committee comprised solely of members representing the share-
holders, makes recommendations to the Supervisory Board con-
cerning persons to be proposed for election as members of the
Supervisory Board at the Annual Meeting and defines the require-
ments for each specific position to be occupied.
The Audit Committee deals with questions of accounting, risk
management, internal auditing, compliance and the annual
external audit. At least once a year, it discusses with the Board
of Management and the external auditors the effectiveness of
the internal control systems and the risk management system,
and regularly receives reports on the work of the Corporate
Audit department. In addition, the Audit Committee has estab-
lished procedures for dealing with complaints about accounting
and the internal control systems and receives regular reports
about such complaints and how they are dealt with. It also
discusses the interim reports with the Board of Management
before they are published, and reviews the annual financial
statements, individual and consolidated, of Daimler AG. The Audit
Committee is informed by the Board of Management about the
Group’s financial disclosure and discusses this matter. It makes
recommendations concerning the selection of external auditors,
assesses such auditors’ suitability and independence, and, after
the external auditors are elected by the Annual Meeting, it
commissions them to conduct the annual audit of the individual
and consolidated financial statements and to review the interim
reports, negotiates an audit fee, and determines the focus of the
annual audit. The Audit Committee receives reports from the
external auditors on any accounting matters that might be regard-
ed as critical and on any differences of opinion with the Board
of Management. In addition, it makes recommendations to the
Supervisory Board, concerning for example the appropriation
of distributable profits and capital measures. Finally, the Audit
Committee approves services provided to Daimler AG or to
companies of the Daimler Group by the firm of external auditors
or its affiliates that are not directly related to the annual audit.
The Supervisory Board is convinced of the independence of the
members of the Audit Committee representing the shareholders.
The Chairman of the Audit Committee, Mr. Bernhard Walter, has
special expertise and experience in the application of accounting
principles and internal control systems. Therefore, the Supervisory
Board has appointed Mr. Walter as its Financial Expert, as
defined by the Sarbanes Oxley Act.
The Mediation Committee is formed solely to perform the func-
tions laid down in Section 31, Subsection 3 of the German
Codetermination Act. Accordingly, the Mediation Committee has
the task of making proposals for the appointment of members
of the Board of Management if a previous proposal did not obtain
the legally prescribed majority of votes.
Board of Management. As of December 31, 2008, the Board of
Management of Daimler AG comprised six members. The duties
of the Board of Management include setting the Group’s strategic
focus and managing its business. It is also responsible for prepar-
ing the individual and consolidated financial statements and the
interim financial statements, and for installing and monitoring a
risk management system. The Rules of Procedure of the Board of
Management define the areas of responsibility of the board
and its members, who are listed on pages 8 and 9 of this Annual
Report.
Governance Structure
Shareholders (Annual Meeting of shareholders)
Election of shareholder representatives
Supervisory Board (10 shareholder and 10 employee representatives),
Nomination Committee, Audit Committee, Presidential Committee, Mediation Committee
Appointments, monitoring, consulting
Board of Management (6 Board members)