Mercedes 2006 Annual Report Download - page 145

CorporateGovernance |Reportof the SupervisoryBoard|129
The meeting held in July focused on personnel issues, the interim
report on the first half of the year, and an intensive discussion of
the Mercedes Car Group’s strategy. The Supervisory Board also
received a status report on the progress of business in China and
dealt with ongoing legal proceedings.
The main item on the agenda of the Supervisory Board meeting in
October was the situation at the Chrysler Group. On the basis
of specific market and product analyses, there was a detailed
discussion of the course of business, inventory developments,
and the opportunities and risks facing the Chrysler Group compared
with its national and international competitors. The discussion
focused on the current development of raw-material and fuel prices
and the resulting impact on the structure of demand in the
United States. In addition, the SupervisoryBoard dealt with
personnel issues and approved the sale of the former head-
quarters buildings in Stuttgart-Möhringen. The Supervisory Board
also received reports on procurement strategy as well as strategic
and operational topics of human-resources work in 2006.
In December, the operative planning for the period of 2007 through
2009 and the financing limit for the 2007 financial year were
dealthwith in depth and decided upon, with the proviso of a plan-
ning adjustment relating to the Chrysler Group. The planning
data was backed up by extensive documentation. In this context,
the Board of Management also reported to the Supervisory
Board in detail on the company’s risk-monitoring system and the
results thereof. Furthermore, the Supervisory Board received
adetailed report on business development at the Financial Services
division and granted its approval to the acquisition of an interest
in Foton, a Chinese manufacturer of commercial vehicles.
Corporate governance. In several meetings, the Supervisory
Board dealt with various corporate governance issues. At one
of the meetings in the second half of 2006, the Rules of Procedure
for the Supervisory Board were amended so that members of
the Board of Management will only be reappointed for a period of
three years in the future. This period had previously only applied
to the original appointment. In the December meeting, pursuant
to Section 161 of the German Stock Corporation Act, the 2006
declaration of compliance with the German Corporate Governance
Code as amended on June 12, 2006 was approved.
Potential conflicts of interest were avoided by the affected
members of the Supervisory Board disclosing them to the
entireSupervisory Board and not participating in the relevant
discussions or voting on the topics concerned.
Mr. Nate Gooden attended fewer than half of the meetings held
in the first half of 2006 due to ill health. It is a matter of great
sorrow to the Supervisory Board that Mr. Gooden passed away in
November 2006.
Report on the work of the committees. The Presidential
Committee convened five times in 2006, and dealt with various
Board of Management matters as well as compensation issues.
At the beginning of 2006, the Committee was involved in the plans
for the new management model and the related plans to alter
the distribution of responsibilities among the members of the Board
of Management. In addition, the Committee dealt with several
personnel issues of the Board of Management, prepared the
plenary meetings of the Supervisory Board, and dealt with
questions of corporate governance.
The Audit Committee met eight times in 2006. Details of
these meetings are given in a separate report of this committee
(see page 134).
The Mediation Committee, a body required by the provisions
of the German Codetermination Act, had no occasion to take any
action in 2006.
The Supervisory Board was continually informed about the
committees’ work, and especially their decisions.
Hilmar Kopper
Chairman of the
Supervisory Board