Mercedes 2010 Annual Report Download - page 164

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Corporate Governance Report
Our understanding
At Daimler, good corporate governance goes beyond the mere
fulfillment of statutory provisions. The Board of Management and
the Supervisory Board have the goal of aligning the Group’s man-
agement and supervision with national and international bench-
marks, in order to secure the continued success of the Group
and its strong traditions by means of sustained value creation and
to contribute to the safeguarding of mobility as an element of
individual freedom.
General conditions
The legal framework for corporate governance at Daimler AG, as
a German stock corporation, is based on German law, in particular
the Stock Corporation Act (AktG), the Codetermination Act
(MitbestG) and legislation concerning capital markets, as well as
on the Articles of Incorporation of Daimler AG.
Daimler AG is obliged by the German Stock Corporation Act
(AktG) to apply a dual management system featuring strict sepa-
ration between the Board of Management and the Supervisory
Board (two-tier board). With this system, the Company’s Board of
Management is responsible for the executive functions while
the Supervisory Board advises and monitors the Board of Manage-
ment. No person may be a member of the two boards at the same
time.
Daimler’s corporate bodies
Shareholders’ Meeting. The Company’s shareholders exercise
their rights in the Company, in particular their voting rights, at
the Shareholders’ Meeting. Each share in Daimler AG entitles its
owner to one vote. There are no Daimler shares with multiple
voting rights, no preferred stock, and no maximum voting rights.
Documents and information relating to the Shareholders’ Meet-
ing can be found on our website at www.daimler.com/ir/am (see
also page 24).
The Annual Shareholders’ Meeting is generally held within four
months after the end of a financial year. The Company facilitates
the exercise of voting rights for the shareholders by appointing
proxies who are bound by the shareholders’ voting instructions.
The Company’s Articles of Incorporation also authorize the
Board of Management to permit postal voting.
Among other matters, the Annual Shareholders’ Meeting decides
on the appropriation of distributable profits, the ratification of
the actions of the members of the Board of Management and the
Supervisory Board, the election of the external auditors and
the election of the members of the Supervisory Board representing
the shareholders. The Annual Meeting also makes other decisions,
especially on amendments to the Articles of Incorporation, capital
measures, and the approval of certain intercompany agreements.
Shareholders can submit countermotions on resolutions proposed
by the Board of Management and the Supervisory Board and
can challenge resolutions passed by the Shareholders’ Meeting
in a court of law.
The influence of the Shareholders’ Meeting on the management
of the Company is limited by law, however. The Shareholders’
Meeting can only make management decisions if it is requested
to do so by the Board of Management.
Supervisory Board. In accordance with the German Codetermi-
nation Act (MitbestG), the Supervisory Board of Daimler AG com-
prises 20 members. Half of them are elected by the shareholders
at the Annual Meeting. The other half comprises members who
are elected by the Company’s employees who work in Germany.
The members representing the shareholders and the members
representing the employees are equally obliged by law to act in
the Company’s best interests.
The Supervisory Board has given itself a set of rules of procedure,
which regulate not only its duties and responsibilities and the
personal requirements placed upon its members, but above all
the convening, preparation and chairing of its meetings and the
procedure of passing resolutions. The rules of procedure of the
Supervisory Board can be seen on our website at www.daimler.
com/dai/rop.
With regard to its own composition, the Supervisory Board has
stipulated in its rules of procedure that more than half of the
members of the Supervisory Board representing the shareholders
are to be independent in order to allow the Board of Manage-
ment to be advised and monitored independently. The rules of
procedure also stipulate that no person may be a member of
the Supervisory Board who is a member of a board of, or advises,
a significant competitor of Daimler AG or its subsidiaries, or
who is subject to any other conflicts of interest. The Supervisory
Board of Daimler AG fulfills these criteria in its present
composition.