Values

152 Corporate Governance
Corporate Governance at Bertelsmann
Th e recognized standards set forth by the German Corporate
Governance Code in the version dated June 18, 2009 form
the basis for Bertelsmann AG’s guidelines on good corporate
governance. Striving to achieve modern, responsible corporate
governance is part of Bertelsmann’s identity and an important
element of its corporate culture.
Corporate management: transparent structures and
clear decision-making processes
Th e Bertelsmann AG Executive Board is responsible for independently
managing the company. It provides the Supervisory
Board with regular, prompt and comprehensive reports on all
matters that are signifi cant to the company’s planning, business
development, fi nancial and earnings position, risk situation
and risk management. Th e Supervisory Board monitors
the Executive Board and advises it on strategic matters and
signifi cant business operations. Th e Executive and Supervisory
Boards work in close cooperation and are therefore able to
reconcile the demands of eff ective corporate governance with
the need for rapid decision-making. Fundamental matters of
corporate strategy and its implementation are discussed openly
and coordinated in joint sessions. Any signifi cant measures to
be taken by the Executive Board are subject to the approval of
the Supervisory Board. Th e shareholders exercise their rights
and vote at the Annual General Meeting. Th e Annual General
Meeting votes on amendments to the articles of association and
the appropriation of net income, for example, and elects members
to the Supervisory Board. Th e members of the Executive
Board are appointed by the Supervisory Board. Th e members
of both the Executive and Supervisory Boards are obliged to
serve the company’s best interests in their work.
For some time, an integral component of the Supervisory
Board’s work at Bertelsmann has been the delegation of tasks
to committees of experts. Th is serves to increase the monitoring
effi ciency and advisory expertise of the Supervisory Board.
In addition to the Personnel Committee, the Bertelsmann AG
Supervisory Board has formed a Strategy and Investment
Committee, an Audit and Finance Committee and a Working
Group of Employee Representatives on the Supervisory
Board. Th e Personnel Committee also performs the tasks of
a Nomination Committee, in which capacity it recommends
suitable candidates to the Supervisory Board for its proposed
resolutions to the Annual General Meeting. Th e Audit and
Finance Committee is also regularly involved in the accounting
process and monitors the eff ectiveness of the internal control,
risk management and internal auditing system. Th ese committees
prepare the topics to be addressed during the Supervisory
Board’s plenary meetings. Th e chairs of the committees then
report to the plenary meetings on the work performed. Th e
committees were also empowered with Supervisory Board
decision-making authority as permitted by law. Th e breadth
and range of responsibilities and tasks delegated to these committees
is continuously reviewed through various evaluation
processes. Th e appropriate size of the Supervisory Board and
the professional expertise of its members, drawn from the
diversity of Bertelsmann’s business units, are key factors in its
eff ectiveness and independence.
Th e Bertelsmann Stiftung foundation indirectly holds 77.4 percent
of Bertelsmann AG shares, with the remaining 22.6 percent
held indirectly by the Mohn family. Bertelsmann Verwaltungsgesellschaft
(BVG) controls all voting rights at the Bertelsmann AG
Annual General Meeting. BVG is responsible for upholding
the interests of the Bertelsmann Stiftung and the Mohn family
as Bertelsmann AG shareholders and ensuring the continuity
of the company’s management and Bertelsmann’s distinctive
corporate culture. BVG shareholders include three representatives
of the Mohn family and three additional shareholders
elected by the BVG shareholder meeting who are not members
of the Mohn family.
Bertelsmann AG is an unlisted company, with 100 percent of
its voting rights in the Annual General Meeting controlled by
BVG. Nonetheless, Bertelsmann AG’s corporate governance
activities closely follow the recommendations of the German
Bertelsmann Annual Report 2009