Mercedes 2015 Annual Report Download - page 186

D | CORPORATE GOVERNANCE | CORPORATE GOVERNANCE REPORT 193
Nomination Committee
The Nomination Committee is composed of at least three
members, who are elected by a majority of the votes cast by
the members of the Supervisory Board representing the
shareholders. It is the only Supervisory Board Committee that
consists solely of members representing the shareholders,
and makes recommendations to the Supervisory Board concern-
ing persons to be proposed for election as members of the
Supervisory Board representing the shareholders at the Annual
Shareholders’ Meeting. In doing so, the Nomination Committee
takes into consideration the requirements of the new German
law regulating equal participation of women and men in exe-
cutive positions, the German Corporate Governance Code and
the rules of procedure of the Supervisory Board, as well as
the specific goals that the Supervisory Board has set for its own
composition. Furthermore, it defines the requirements for
each specific position to be occupied.
Audit Committee
The Audit Committee is composed of four members, who are
elected by a majority of the votes cast on the relevant resolu-
tion of the Supervisory Board. The Chairman of the Supervi-
sory Board is not simultaneously the Chairman of the Audit
Committee.
Both the Chairman of the Audit Committee, Dr. Clemens Börsig,
and the other shareholder representative on the Audit
Committee, Joe Kaeser, fulfill the criteria for independence
and have expertise in the field of financial reporting, as
well as special knowledge and experience in the application
of accounting principles and methods of internal control.
The Audit Committee deals with the supervision of the account-
ing process and the annual external audit. At least once a year,
it discusses with the Board of Management the effectiveness
and functionality of the risk management system, the internal
control and auditing system and the compliance management
system. It regularly receives reports on the work of the
Internal Auditing department and the Compliance Organization.
At least four times a year, the Audit Committee receives a
report from the Business Practices Office on complaints and
information about any breaches of regulations or guidelines
by high-level executives. It regularly receives information about
the handling of these complaints and notifications.
The Audit Committee discusses with the Board of Management
the interim reports on the first quarter, first half and first
nine months of the year before they are published. On the basis
of the report of the external auditors, the Audit Committee
reviews the annual company financial statements and the annual
consolidated financial statements, as well as the combined
management report of the Company and the Group, and dis-
cusses them with the external auditors. Since 2014, the
responsible auditor at KPMG AG Wirtschaftsprüfungsgesell-
schaft, the company of auditors commissioned to carry
out the external audit 2015, has been Dr. Axel Thümler. The
Audit Committee makes a proposal to the Supervisory
Board on the adoption of the annual company financial state-
ments of Daimler AG, on the approval of the annual consoli-
dated financial statements and on the appropriation of profits.
The Committee also makes recommendations for the proposal
on the election of external auditors, assesses those auditors’
suitability and independence, and, after the external auditors
are elected by the Annual Shareholders’ Meeting, it engages
them to conduct the annual audit of the company and consoli-
dated financial statements and to review the interim reports,
negotiates an audit fee and determines the focus of the annual
audit. The external auditors report to the Audit Committee
on all accounting matters that might be regarded as critical and
on any material weaknesses of the internal control and risk
management system with regard to accounting that might be
discovered during the audit.
Finally, the Audit Committee approves services that are not
directly related to the annual audit and which are provided
by the firm of external auditors or its affiliates to Daimler AG
or to companies of the Daimler Group.
Mediation Committee
The Mediation Committee is composed of the Chairman of the
Supervisory Board and his Deputy, as well as one member
of the Supervisory Board representing the employees and one
member of the Supervisory Board representing the share-
holders, each elected with a majority of the votes cast. It is
formed solely to perform the functions laid down in Section 31
Subsection 3 of the German Codetermination Act (MitbestG).
Accordingly, the Mediation Committee has the task of making
proposals on the appointment of members of the Board of
Management if in the first vote the majority required for the
appointment of a Board of Management member of two thirds
of the members of the Supervisory Board is not achieved.
As in previous years, the Mediation Committee did not have
to take any action in financial year 2015.
Germany’s law on the equal participation of
women and men in executive positions
Germany’s law on the equal participation of women and men in
executive positions went into effect on May 1, 2015. According
to this law, the supervisory boards of listed companies or com-
panies subject to Germany’s system of codetermination have
to set a target for the proportion of women in the board of man-
agement. The board of management of such a company has
to set a target for the proportion of women at the two manage-
ment levels below that of the board of management. If the
proportions of women at the time when these targets are set
by the board of management and the supervisory board are
below 30%, the targets may not be lower than the proportions
already reached. At the same time that the targets are set,
the boards have to set periods for their achievement, which may
not be longer than five years. In the first step, targets had to
be set by no later than September 30, 2015, and deadlines fixed
for no later than June 30, 2017.