Porsche 2011 Annual Report Download - page 23

the supervisory board. These include, among others,
the acquisition and sale of companies of a certain
size, the establishment and closure of plants, the
introduction or discontinuation of business divisions
as well as transactions with holders of ordinary sha-
res or supervisory board members of Porsche SE.
Corporate governance takes into considera-
tion conflicts of interest that can arise from member-
ship of two executive boards (at Porsche SE on the
one hand, and at Volkswagen AG or Porsche AG on
the other) and addresses these in the company’s
interest. For example, members of the executive
board who are also members of the Volkswagen AG
board of management do not participate in any reso-
lutions concerning issues relating to Volkswagen AG.
In accordance with the provisions of the
German Corporate Governance Code, the executive
board ensures compliance with legal provisions and
internal policies, and works towards ensuring they are
taken into account. The task of Porsche SE’s Chief
Compliance Officer is to advise the executive board
on all questions relating to compliance, to introduce
preventive measures, manage these and monitor
compliance with regulations. Compliance activities are
based on a strategy aimed at prevention. The Chief
Compliance Officer of Porsche SE reports directly to
the chairman of the executive board.
Monitoring of management by the
supervisory board
The supervisory board appoints the members
of the executive board, and also advises and monitors
the executive board in their managerial activities. The
structure already ensures the fundamental independ-
ence of the supervisory board in its control of the
executive board since a member of the supervisory
board may not at the same time belong to the execu-
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 supervisory
board are governed by the European SE provisions.
These are supplemented by the co-determination
agreement entered into with representatives of the
European Porsche employees. This defines the com-
petencies of the employees in the works council of
Porsche SE, the procedure for the election of the
Porsche SE works council and the representation of
the employees in the Porsche SE supervisory board
as well as the relevant rulings in the articles of asso-
ciation. Shareholder and employee representatives
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 member of the
executive board of Porsche SE or Porsche AG. The
supervisory board is of the opinion that it has a suffi-
cient 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 currently has four
committees. Three of these are permanent: an execu-
tive committee, an audit committee and a nomination
committee. In addition, the supervisory board set up
temporary committees in the 2011 reporting period.
These were the capital increase committee, which
was dissolved again on 30 August 2011, and the
merger committee, which was renamed “integrated
automotive group committee” once the preparation
for the merger had been completed.
The executive committee functions as the
personnel committee and decides in urgent cases on
transactions requiring approval. The audit committee
supports the supervisory board in monitoring the
company’s management and reviews the accounting
process, the effectiveness of the internal control
system, compliance system, risk management sys-
tem and internal audit system, and the independent
audit of the financial statements. The nomination
committee provides the supervisory board with rec-
ommendations for the supervisory board’s proposals
to the annual general meeting concerning the election
of supervisory board members.
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