Porsche 2009 Annual Report Download - page 25

tive board and the competencies of the two bodies
are strictly segregated.
The supervisory board is composed of twelve
members. The size and composition of the supervi-
sory board are governed by the European SE provi-
sions. These are supplemented by the co-
determination agreement entered into with represen-
tatives of the European Porsche employees. This de-
fines the competencies of the employees in the works
council of Porsche SE, the procedure for the election
of the Porsche SE works council and the representa-
tion of the employees in the Porsche SE supervisory
board as well as the relevant rulings in the articles of
association. Shareholder and employee representa-
tives are equally represented on the supervisory
board of Porsche SE, following the basic principles of
German co-determination law. None of the current
members of the supervisory board is a former mem-
ber of the executive board of Porsche SE or Porsche
AG. Based on the assessment of the supervisory
board, it includes a sufficient number of independent
members.
The supervisory board takes its decisions
with a simple majority of votes cast by the participat-
ing supervisory board members. In the event of a tie,
the supervisory board chairman, who always has to
be a member of the supervisory board elected by the
shareholders, casts a deciding vote.
The supervisory board has formed several
committees: an executive committee, an audit com-
mittee and a nomination committee. The executive
committee acts as personnel committee; in urgent
cases, it also decides on transactions requiring the
prior approval of the supervisory board. The audit
committee supports the supervisory board in monitor-
ing the company management and reviews the ac-
counting process, the effectiveness of the internal
control system, compliance system, risk management
system and audit system, and the independent audit
of the financial statements. The nomination commit-
tee provides the supervisory board with recommenda-
tions for the supervisory board’s proposals to the an-
nual general meeting concerning the election of su-
pervisory board members.
Rights of the shareholders
Porsche SE’s share capital is equally divided
into ordinary shares and preference shares without
voting rights. The shareholders exercise their rights in
the annual general meeting. When passing resolutions,
each ordinary share of Porsche SE grants one vote.
There are no shares with multiple or preferential vot-
ing rights, nor are there maximum voting rights. Every
shareholder is entitled to take part in the annual gen-
eral meeting, to express an opinion on items on the
agenda, to table motions and to demand information
about company matters if this is needed to properly
judge an item on the agenda.
Among other things, the annual general meet-
ing adopts resolutions on the exoneration of the ex-
ecutive board and the supervisory board, the appro-
priation of profits, capital measures and amendments
to the articles of association.
The shareholder representatives on the su-
pervisory board are elected by the annual general
meeting. The following applies to the election of em-
ployee representatives on the supervisory board: The
articles of association of Porsche SE provide for the
appointment of employee representatives to the su-
pervisory board by the annual general meeting, unless
an agreement reached in accordance with the German
Law on Employee Participation at SEs (SEBG) pro-
vides for any other procedure for the appointment of
employee representatives to the supervisory board.
The latter is currently the case. The agreement on the
involvement of employees at Porsche SE contains the
provision that employee representatives are directly
appointed to office following their election by the Por-
sche SE works council. Even if no such agreement
had been made, the annual general meeting would be
bound by the nominations of the employees for em-
ployee representatives.
Financial reporting and annual audit
The Porsche group’s financial reporting is
based on the International Accounting Standards (IAS)
and International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards
25