2011 Annual Report - OTCIQ.com

178
Corporate Governance Report
exceptional management experience from an industry in which
regulation and competition developed in a manner similar
to that of the energy industry. Under his leadership, technological
and business innovations for this industry were successfully
developed and marketed. Bård Mikkelsen was for many
years the Chief Executive Officer of Statkraft, a Norwegian
energy supplier, and has deep knowledge of the European
energy market, including renewables. The three new members
add to the Supervisory Board’s international diversity. In
addition, the Supervisory Board’s goal of doubling the number
of its female members by 2013 was achieved for the shareholders
side by 2011. The targets for the Supervisory Board’s
composition will be taken into consideration when proposing
the shareholder representatives of the Supervisory Board in
the process of the planned transformation of E.ON AG into a
Societas Europaea (“SE”).
In addition, under the Supervisory Board’s policies and procedures,
Supervisory Board members are required to disclose
to the Supervisory Board any conflicts of interest, particularly
if a conflict arises from their advising, or holding a corporate
office with, one of E.ON’s customers, suppliers, creditors, or other
business partners. The Supervisory Board is required to report
any conflicts of interest to the Annual Shareholders Meeting
and to describe how the conflicts have been dealt with. Any
material conflict of interest of a non-temporary nature should
result in the termination of a member’s appointment to the
Supervisory Board. There were no conflicts of interest involving
members of the Supervisory Board in 2011. Any consulting or
other service agreements between the Company and a Supervisory
Board member require the Supervisory Board’s consent.
No such agreements existed in 2011.
The Supervisory Board has established the following committees
and defined policies and procedures for them:
The Mediation Committee required by Section 27, Paragraph 3,
of the Codetermination Act consists of two shareholder-
representative members and two employee-representative
members. This committee is responsible for recommending
to the Supervisory Board potential candidates for the Board
of Management if the first vote does not yield the necessary
two-thirds majority of votes of Supervisory Board members.
It therefore only meets when necessary.
The Executive Committee consists of the four members of the
above-named committee. It prepares the meetings of the
Supervisory Board and advises the Board of Management on
matters of general policy relating to the Company’s strategic
development. In urgent cases (in other words, if waiting for the
Supervisory Board’s prior approval would materially prejudice
the Company), the Executive Committee acts on the full Supervisory
Board’s behalf. In addition, a key Executive Committee
task is to prepare the Supervisory Board’s personnel decisions
and resolutions for setting the total compensation of individual
Board of Management members within the meaning of Section
87 of AktG. Furthermore, it is responsible for the conclusion,
alteration, and termination of the service agreements of
Board of Management members and for presenting the Supervisory
Board with a proposal for a resolution on the Board
of Management’s compensation plan including key elements
of Board of Management service agreements. It also deals
with corporate-governance matters and reports to the Supervisory
Board at least once a year on the status and effectiveness
of, and possible ways of improving, the Company’s corporate
governance.
The Audit and Risk Committee consists of four members who
have special knowledge in the field of accounting and/or
business administration. In line with Section 100, Paragraph
5, of AktG and the Code’s mandates, the Chairperson has
extensive knowledge and experience in applying accounting
principles and/or in international business control processes.
In particular, the Audit and Risk Committee monitors the Company’s
accounting and the accounting process; the effectiveness
of internal control systems, internal risk management, and
the internal audit system; compliance; and the independent
audit. With regard to the independent audit, the committee also
deals with the definition of the audit priorities and the agreement
regarding the independent auditor’s fees. The Audit and
Risk Committee also prepares the Supervisory Board’s decision
on the approval of the Financial Statements of E.ON AG