Annual Report 2006/2007 KGaA/Group - BVB Aktie - Borussia ...

CORPORATE GOVERNANCE REPORT
• The rights and duties of the Supervisory Board
of the limited partnership (“KGaA”) elected by
the General Shareholders' Meeting are limited.
Specifically, it has no authority with respect to
matters involving personnel, i.e., no authority to
appoint and dismiss managing directors at
Borussia Dortmund Geschäftsführungs-GmbH
or to regulate the terms of their contracts. Nor
is the Supervisory Board authorised to adopt internal
rules of procedure for the general partner
or any list of transactions requiring its consent.
Rather, such rights and duties are vested
in the governing bodies of Borussia Dortmund
Geschäftsführungs-GmbH, namely its Advisory
Board and the Executive Committee created by
the Advisory Board.
• Additional distinctions exist with respect to the
General Shareholders' Meeting of the KGaA,
which are primarily controlled by §§ 285 and
286 (1) AktG and the Articles of Association of
our Company.
Consequently, the management of the general
partner and the Supervisory Board of Borussia
Dortmund GmbH & Co. KGaA are required to
provide a Statement of Compliance (Ent spre -
chens erklärung) pursuant to § 161 AktG, taking
into account the organisational distinctions of the
legal form of a KGaA and their expression in the
Articles of Association. The Statement of Compliance
must be made permanently available to
the shareholders. This is done by publishing the
Statement of Compliance on our Company's Investor
Relations website (www.borussia-aktie.de,
under the heading “Corporate Governance
[CG]”). The Statement of Compliance (including
explanations of any deviations from the Code's
recommendations), which was provided in November
2006, is reproduced in the annex to this
Corporate Governance Report.
The general partner's management and the Supervisory
Board will issue the next Statement of
Compliance as scheduled in December 2007, at
which time the amendments to the Code dated 14
June 2007, which were published in the electronic
Federal Gazette on 20 July 2007, must also be
addressed.
With respect to the Statement of Compliance
from November 2006, to date the following key
issues regarding corporate governance should be
mentioned:
• Compliance with the recommendations of the
Code relating to the treatment of so-called “severance
pay caps” (Abfindungs-Caps) under
management board employment agreements
(these recommendations are directed at the supervisory
board of stock corporations) is not a
matter for the Supervisory Board at our Company
because it has no authority in relation to
personnel matters. Instead, severance pay caps
fall within the purview of the Advisory Board of
Borussia Dortmund Geschäftsführungs-GmbH.
Subject to this proviso, the recommendations
have been and are being complied with mutatis
mutandis.
• Committees, specifically an audit committee,
were not or are not being established by the Supervisory
Board, because the Supervisory Board
comprises only 6 persons, and committees
would have to consist of 3 persons in order to
have quorum. The Company intends to retain
its existing practice in this regard, in other
words all pending matters will be dealt with by
the full Supervisory Board.
• It is for the same reason that the Supervisory
Board has not created a nomination committee
as is now recommended by the Code. In any
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