Methods and practices of the Board of Management and Supervisory Board
The Board of Management manages the business of AUDI AG and of the Audi Group in accordance with the law, the Articles of Incorporation and Bylaws of AUDI AG and the code of practice issued by the Supervisory Board. Corporate Governance also gives due consideration to the corporate goals and to shared interests within the Volkswagen Group. The Board of Management of AUDI AG consists of a Chairman and six other members, each responsible for a specific division.
The companies of the Audi Group are managed independently by their respective managements, in accordance with legal requirements. In fulfilling their role, the said managements also safeguard and pursue the interests of the company concerned and of the wider Audi Group.
As part of its system of management, the Board of Management of AUDI AG has established division-specific and Group-wide management bodies which make strategic and operational decisions in accordance with the defined corporate goals and policies and in compliance with the applicable legal requirements.
The Board of Management has not formed any committees.
In accordance with the statutory provisions, the Supervisory Board of AUDI AG comprises ten representatives of the stockholders and ten representatives of the employees. The stockholder representatives are elected by the Annual General Meeting. The employees of the Audi Group’s German operations elect the employee representatives. The members of the Supervisory Board are normally elected for a period of five years.
The Supervisory Board oversees and advises the Board of Management’s running of the business. In this connection it receives regular reports on
- the intended business policy and other fundamental matters of corporate planning,
- the profitability of the Company,
- the course of business and
- transactions which may be of considerable significance for the profitability or liquidity of the Company.
- the accounting process, the effectiveness of the internal control system, the risk management system and the internal audit system
The other major tasks of the Supervisory Board include the appointment and dismissal of members of the Board of Management as well as determining and regularly examining the remuneration of the Board of Management.
The Supervisory Board examines the Annual and Consolidated Financial Statements as well as the Management Report. Provided its members raise no objections, it approves the financial statements and the Management Report. Once approved, the Annual Financial Statements are established.
Ordinary meetings of the Supervisory Board are normally held once each quarter. If necessary, the Supervisory Board also holds extraordinary meetings. It reaches its decisions on the basis of written submissions and oral explanations by the members of the Board of Management. In urgent cases, the Supervisory Board also reaches decisions by written communication.
The Supervisory Board of AUDI AG has established three committees in fulfillment of its assigned role: the Presiding Committee, the Negotiating Committee pursuant to Section 27, Para. 3 of the German Codetermination Act (MitbestG), and the Audit Committee. Each of the Supervisory Board committees comprises two stockholder representatives and two employee representatives. The respective memberships of the committees are detailed on the AUDI AG website, in the Company section under “Corporate Management.”
The Presiding Committee of the Supervisory Board normally meets before each Supervisory Board meeting for extensive consultations. It prepares the decisions of the Supervisory Board and may make recommendations to the Supervisory Board as part of the decision-making process. It decides on contractual matters for the members of the Board of Management where these do not concern remuneration.
The Negotiating Committee is formed exclusively for the purpose of performing the tasks described in Section 31 of the German Codetermination Act.
The Audit Committee deals, among other matters, with
- monitoring the financial reporting process,
- the effectiveness of the internal control system, the risk management system and the internal audit system, as well as
- key preparatory tasks for auditing of the financial statements
Once the auditor has completed its reports, the Audit Committee examines the Annual and Consolidated Financial Statements as well as the Management Reports of the parent company and the Group on the basis of these reports and oral explanations by the Board of Management and by the auditor. It makes a recommendation to the Supervisory Board on the establishment of the Annual Financial Statements as well as recommendations on the election of the auditor.
The Audit Committee discusses the main focus of the audit with the auditors and proposes this to the Supervisory Board for resolution. It assesses the suitability and independence of the auditor and prepares the fee agreement with the auditor.
The Audit Committee discusses the Interim Report with the Board of Management prior to its publication.
The Audit Committee normally meets four times per calendar year.