BMW 2002 Annual Report Download - page 39

001 BMW Group in figures
004 Report of the Supervisory Board
008 Supervisory Board
011 Board of Management
012 Group Management Report
031 BMW Stock
034 Corporate Governance
042 Group Financial Statements
106 BMW AG Financial Statements
112 BMW Group Annual Comparison
114 BMW Group Locations
116 Glossary
120 Index
38
3. The Board of Management of BMW AG
3.1 Tasks and responsibilities
The Board of Management is responsible for inde-
pendently managing the enterprise. In doing so, it is
obliged to act in the enterprises best interests and
undertakes to increase the sustainable value of the
enterprise.
The Board of Management develops the enter-
prises strategy, coordinates it with the Supervisory
Board and ensures its implementation.
The Board of Management ensures that all
provisions of law are abided by and works to achieve
their compliance throughout the group.
The Board of Management ensures appropriate
risk management and risk controlling throughout the
group.
3.2 Composition and compensation of the
Board of Management
The Board of Management consists of several per-
sons with one chairman. The allocation of areas of
responsibility and the cooperation within the Board
of Management is regulated by specific terms of
reference.
Compensation of the members of the Board of
Management is determined by the Supervisory
Board based on performance criteria. Criteria for de-
termining the appropriateness of compensation are,
in particular, the tasks of each member of the Board
of Management, an assessment of performance of
those tasks as well as the economic situation, per-
formance and outlook of the BMW Group taking into
account the competitive environment.
The compensation of the members of the Board
of Management comprises fixed and variable com-
ponents.Variable compensation includes annually-
payable components linked to business performance.
Compensation of the members of the Board
of Management will be reported in the notes to the
Consolidated Financial Statements subdivided
according to fixed and performance-related com-
ponents.
3.3 Conflicts of interest
During their period of employment for BMW AG,
members of the Board of Management are subject
to a comprehensive non-competition obligation.
Members of the Board of Management and
employees may not, in connection with their work,
demand nor accept from third parties payments or
other advantages for themselves or for any other
person nor grant third parties unlawful advantages.
Members of the Board of Management are
bound by the enterprises best interests. No mem-
ber of the Board of Management may pursue per-
sonal interests in his decisions or take advantage of
business opportunities intended for the enterprise.
All members of the Board of Management must
disclose conflicts of interest to the Supervisory
Board without delay and inform the other members
of the Board of Management thereof. All transactions
between the enterprise and members of the Board
of Management as well as persons they are close to
or companies they have a personal association with
must comply with standards customary in the sector.
Important transactions require the approval of the
Supervisory Board.
Members of the Board of Management may
only undertake ancillary activities, in particular Super-
visory Board mandates outside the BMW Group, with
the approval of the Supervisory Board.
4. The Supervisory Board of BMW AG
4.1 Tasks and responsibilities
The task of the Supervisory Board is to advise regu-
larly and supervise the Board of Management in
the management of the BMW Group. It is involved in
all decisions of fundamental importance for the
BMW Group.
The Supervisory Board appoints and dismisses
the members of the Board of Management. To-
gether with the Board of Management, it ensures
that there is long-term successor planning. The
Supervisory Board has delegated the preparation of
appointments to the Board of Management to a
committee, which also determines the terms and
conditions of employment contracts including com-
pensation.