Mercedes 2002 Annual Report Download - page 156

The issue of the management and control of stock corpora-
tions is the subject of lively discussion among large sections
of the public under the heading of “corporate governance”.
DaimlerChrysler supports all the initiatives that aim to improve
corporate governance, and many of the resulting principles
and recommendations have long been practiced at our com-
pany. In particular due to the fact that our company has its
roots in Germany and the United States, the Board of Manage-
ment and the Supervisory Board intend to ensure that
Daimler-Chrysler’s corporate governance system complies with
international standards and is transparent. This report has
these aims.
General conditions
The legal framework for the corporate governance of
DaimlerChrysler as a stock corporation with its headquarters
in Germany derive from German Law, particularly the Stock
Corporation Law, the Co-determination Act, legislation
concerning the capital market, and the company’s articles of
association.
Due to the listing of our company at foreign stock
exchanges, especially at the New York Stock Exchange, these
countries’ applicable capital-market legislation and their stock
exchanges’ listing regulations are also important. In this
legal framework, much public attention has been paid to the
Sarbanes-Oxley Act in the United States. As DaimlerChrysler is
listed at the New York Stock Exchange and is therefore also
obliged to observe these legal stipulations, we are in favor of
equivalent international stock exchange regulations.
Shareholders and the Annual Meeting
The company's shareholders exercise their rights and cast
their votes at the Annual Meeting. Each share in Daimler-
Chrysler AG entitles its owner to one vote. There are no shares
with multiple voting rights, no preferred, privileged stock,
and no maximum voting rights.
Corporate Governance
150 |Corporate Governance
Various important decisions can only be taken by the Annual
Meeting. These include:
– the appropriation of net income and – in such cases as
specified by the law – the adoption of the annual financial
statements and the approval of the consolidated financial
statements;
– the ratification of the acts of the members of the Board
of Management and the Supervisory Board;
– the election of the independent auditors;
– the election of members of the Supervisory Board and,
if necessary, their dismissal;
– amendments to the Articles of Association;
– the raising of capital – also for stock-based compensation –
and capital reductions;
– approval to buy back shares, limited to 10% of the issued
shares;
– consent to certain inter-company agreements.
The influence of the Annual Meeting on the management
of the company is limited. Management decisions can only
be taken by the Annual Meeting if it is requested to do so
by the Board of Management.
Dual management system
DaimlerChrysler AG is obliged by the German Commercial
Code to apply a dual management system. With this system,
the company’s Board of Management is responsible for the
executive functions, while the Supervisory Board appoints,
monitors and advises the Board of Management. The mem-
bers of the Board of Management bear shared responsibility
for managing the company, while the Chairman of the Board
of Management coordinates the work of the Board of
Management. The Supervisory Board is involved in decisions
which are of fundamental importance, and the work of the
Supervisory Board is coordinated by its own chairman.
Half of the members of the Supervisory Board are elected
by the shareholders at the Annual Meeting. The other half are
elected by the company’s German employees. The members
representing the shareholders and the members representing
the employees are equally obliged to act in the company’s
best interests.
Additional information is available on the Internet at
www.daimlerchrysler.com/corpgov_e.