Corporate Governance

3.5.3 Working procedures of the Board of Directors — The Board of Directors met five times during the year under re-
view. During the 2005 financial year, most of the duties of the Board of Directors were carried out by the full board. Before
their meetings, members of the Board of Directors receive documentation enabling them to prepare properly to deal with
the items on the agenda. As a rule the meetings last three quarters of a day. Members of Group Management, repre-
sentatives of the external auditors and external consultants are invited as necessary to deal with specific issues.
3.6 Division of powers — The Board of Directors is responsible for guiding, supervising and monitoring the executive
management of the company. It is responsible for approving and regularly reviewing company strategy, enacting the ne-
cessary rules, instructions and guidelines, and establishing the organisation and risk policy of AFG Arbonia-Forster-Holding
AG. It is also responsible for supervising and monitoring the persons entrusted with running the company. The Board of
Directors has designated Dr. Edgar Oehler as Managing Director; he simultaneously heads Group Management as Chief
Executive Officer (CEO). The division of powers between the Board of Directors, Group Management and divisional man-
agement is set out in detail in the articles of association, by-laws and division of powers and responsibilities (“Kompetenz/
Pflichtenregelung”) of AFG Arbonia-Forster-Holding AG. Within the framework of the law and the articles of association,
and based on the by-laws and division of powers and responsibilities, the Board of Directors has delegated the manage-
ment of the group to Group Management. Group Management has limited powers to decide on its own affairs and on
applications from the divisions.
Corporate Governance
3.7 Group management information and control instruments — The Board of Directors is kept informed about the ac-
tivities of executive management and the divisions via a number of different channels: The Management Information
System (MIS) provides the members of the Board of Directors with fundamental information about the financial, income
and risk situation of the group. The external auditors provide the Board of Directors with written and spoken information
on the main findings of the audit. The CEO oversees the members of Group Management who report to him and ensures
compliance with the law, the articles of association and regulations throughout the Group. He reports to the Board of
Directors on a regular basis, and immediately in the event of extraordinary developments. The Board of Directors may
demand any additional information it needs to carry out its tasks.