Board of Directors

The members of the Board of Directors are elected by individual vote for a term of one year (total renewal). Re-election is permitted. Election proposals are normally submitted by the Board of Directors upon recommendation of the Nomination and Compensation Committee. The period between two ordinary Shareholders’ Meetings is considered one year.

The Board of Directors constitutes itself. It chooses a Chairman, a Vice Chairman and a secretary. The latter need not be a Board member.

Meetings of the Board of Directors are called by the Chairman and, if the Chairman is unavailable, by the secretary as often as required by the business, but at least four times every year. Normally, an additional two-day strategy meeting is held each year.

Resolutions and elections of the Board of Directors are passed and carried out in Board meetings by the majority of the votes cast. The Chairman has the deciding vote. The Board of Directors can validly pass resolutions if a majority of its members is present at the Board meeting. These presence requirements do not apply to resolutions taken in connection with capital increases.

Resolutions may also be passed without a meeting of the Board of Directors by way of circular resolution.

The Nomination and Compensation Committee prepares, together with the CEO, all relevant matters in the areas of human resources and compensation for the Board meetings. The committee does not have any competence to take decisions; duties and competencies of the Board of Directors according to the organizational rules and the law are vested in the Board of Directors as a whole. The committee supports the Board of Directors in its supervisory and controlling functions and supervises the implementation of Board resolutions within the said areas of activities. Meetings are held at least twice a year. The charter of the Nomination and Compensation Committee is available
under Document as PDF.

The Risk and Audit Committee prepares, together with the CFO, all relevant matters in the areas of financial planning and financial controlling, compliance with laws and regulations as well as risk management for the Board meetings. The committee does not have any competence to take decisions; duties and competencies of the Board of Directors according to the organizational rules and the law are vested in the Board of Directors as a whole. The committee supports the Board of Directors in the supervision of the accounting and the financial reporting and in its controlling functions regarding compliance with legal provisions and the existence of suitable internal controlling structures. The committee supervises the implementation of Board resolutions within the said areas of activities as well as the auditors. Meetings are held at least twice a year, the CFO and representatives of the auditors being present.
The charter of the Risk and Audit Committee is available under Documents as PDF.

¹ Furthermore, the Board of Directors took several circular resolutions.
² The auditors attended the Risk and Audit Committee meetings two times.

On a monthly basis, the Board of Directors receives from the management information system (MIS) all relevant financial information relating to the Micronas Group, such as the consolidated profit and loss statement, the balance sheet and the cash flow statement, the consolidated profit and loss statement for the segments as well as comments with respect to the most important changes and differences compared to the budget and the rolling forecast. In addition, reports of the marketing, sales and operations activities are prepared, including information on the Company as well as information on markets, customers and competitors. With respect to the product development activities detailed progress reports on projects are presented.

The risk controller compiles a standardized risk report on a quarterly basis. The 15 most important risks are continuously observed through risk management. The risk report contains verbal and graphical information relating to the most important changes and any material newly discovered risks, if any. The risks are being classified with respect to their probability and their possible effects on the operating profit. The material risk factors are determined by the owners of the respective risks on a yearly basis or ad hoc, if necessary, and reviewed and approved by the Management Board and the Risk and Audit Committee. The internal control system is regularly evaluated in the course of the risk management; any findings are documented and commented in the quarterly and monthly reporting (for further details regarding the risk management process please refer to page 89 of the Financial Report 2011).

From time to time, usually once per year, the Board of Directors organizes an internal audit through an independent consultant on a special topic to be determined by the Board of Directors. The respective report of the internal auditor, including its recommendations, is discussed in Board meetings and the Board of Directors decides on any measures to be implemented based on such report.