Methods and Practices of the Board of Management and Supervisory Board
The methods and practices of the Board of Management and Supervisory Board and the composition, methods and practices of their committees are described below.
Methods and Practices of the Board of Management
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 rules of procedure 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 five 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. Those management organizations act not only in the interests of their respective companies but also in the interest of the Audi Group as a whole.
As part of its system of management, the Board of Management of AUDI AG has established cross-divisional 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.
Methods and Practices of the Supervisory Board
The Supervisory Board of AUDI AG comprises ten shareholder representatives and ten employee representatives as provided for by law. The shareholder representatives are elected by the Annual General Meeting. The employee representatives are elected by employees of the Audi Group’s German operations. Supervisory Board members 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,
- transactions that may be of considerable significance for the profitability or liquidity of the Company, as well as
- the accounting process, the effectiveness of the Internal Control System, the Risk Management System and the Internal Audit System.
Other significant duties of the Supervisory Board include appointing and dismissing members of the Board of Management and establishing and conducting regular reviews of Board of Management remuneration.
The Supervisory Board examines the Annual and Consolidated Financial Statements as well as the Combined Management Report of the Audi Group and AUDI AG. Provided its members raise no objections, it approves the financial statements and the Combined Management Report of the Audi Group and AUDI AG. 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.
Supervisory Board Committees
The Supervisory Board of AUDI AG has established four committees in order to perform its duties: the Presiding Committee, the Negotiating Committee pursuant to Section 27, Para. 3 of the German Codetermination Act (MitbestG), the Audit Committee and the “Diesel” Committee. Each Supervisory Board committee comprises two shareholder representatives and two employee representatives. The names of the committee members can be viewed here.
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 accounting process and reviewing the financial reports
- the effectiveness of the internal control system, the risk management system and the internal audit system
- key preparatory tasks for auditing of the financial statements as well as
Once the auditor has completed its reports, the Audit Committee examines the Annual and Consolidated Financial Statements as well as the Combined Management Report of the Audi Group and AUDI AG 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 selection 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 Financial Report with the Board of Management prior to its publication.
The Audit Committee normally meets four times per calendar year.
The “Diesel” Committee oversees and supports the Board of Management in its investigation and reappraisal of events related to diesel issues. It also prepares the Supervisory Board’s consultations and resolutions on diesel issues. The “Diesel” Committee came together for four meetings in the 2018 fiscal year.
Report of the Supervisory Board 2018
3 pages, EN
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