Supervisory Board – Equal numbers of shareholder representatives and employee representatives sit on the Supervisory Board of Linde AG, which comprises, in accordance with the company’s articles of association, the number of members specified as the minimum number in the relevant regulations.
Currently, the minimum number of Supervisory Board members specified is twelve. The appointment of the members of the Supervisory Board is also governed by the relevant legal regulations. In accordance with the recommendations of the German Corporate Governance Code, the shareholder representatives were elected individually at the last election to the Supervisory Board at the Annual General Meeting on 3 June 2008. The current term of office of the members of the Supervisory Board ends with the completion of the Annual General Meeting in 2013. The composition of the Supervisory Board is balanced to ensure that its members collectively possess the knowledge, skills and professional experience necessary to enable them to discharge their duties in a group with global operations in a fit and proper manner. All Supervisory Board members must ensure that they have sufficient time to perform those duties. Supervisory Board members who also sit on the executive board of a listed company must not hold more than three supervisory board offices in listed companies or in comparable supervisory bodies of other business entities which do not belong to the same group as the company for which they perform their executive board duties. Linde AG undertakes to support Supervisory Board members as appropriate in the pursuit of any training or professional development necessary for the performance of their duties. In March 2011, the Supervisory Board defined specific objectives for its future composition in accordance with Section 5.4.1 of the German Corporate Governance Code, as set out below. Taking into account the particular situation of the Group, these cover the Group’s international reach, potential conflicts of interest, an age limit for Supervisory Board members and the need for diversity.
International expertise
With operations in more than 100 countries, The Linde Group has a global footprint. To reflect this, at least five of the Supervisory Board members should have extensive international expertise.
Potential conflicts of interest
At least 75 percent of the Supervisory Board members should have no business or personal ties with the company or its Executive Board which could constitute a conflict of interest. The mere existence of an employment relationship between employee representatives and the company or its affiliated companies does not preclude impartiality as described above. Supervisory Board members should not have management or advisory roles on the executive bodies of the main competitors of The Linde Group. No more than two former Executive Board members may sit on the Supervisory Board.
Age limit for Supervisory Board members
Supervisory Board members should be no older than 72.
Diversity
The Supervisory Board is committed to diversity in its composition. In particular, it is committed to the fair representation of women. The next elections for both shareholder and employee representatives on the Supervisory Board will not take place until 2013. After these elections at the latest, the Supervisory Board should include at least two women.
These objectives were taken into consideration when the nomination was made to the Annual General Meeting on 12 May 2011 for the election of a new member to the Supervisory Board, an election which was required as a result of one Supervisory Board member retiring from office.
More than five members of the current Supervisory Board have acquired extensive international expertise as a result of their careers to date. One member of the Supervisory Board, Mr Diekmann, did not take part in the discussions and voting procedures of the Standing Committee and Supervisory Board on the appointment of Mr Thomas Blades to the Executive Board of Linde AG in September 2011. Mr Diekmann was a member of the Supervisory Board of Siemens AG, resulting in a potential conflict of interest, as Thomas Blades was an executive employee of Siemens AG at the time. Otherwise, there were no conflicts of interest involving Supervisory Board members in the 2011 financial year. Where such conflicts of interest do occur, they must be disclosed immediately to the Supervisory Board. No Supervisory Board members currently have management or advisory roles on the executive bodies of any of Linde’s major competitors. Four Supervisory Board members are company employees. No other consultancy, service or work contracts have been concluded between Supervisory Board members and the company. No former members of the Executive Board of the company are currently members of the Supervisory Board. One Supervisory Board member reached the age limit in the 2010 financial year. At the Annual General Meeting in 2008, the member in question was elected for a term of five years. When proposing candidates for the 2008 elections, the Supervisory Board was aware of the age limit defined in the procedural rules. However, it had good reason for proposing candidates that would reach the age limit during their term of office. The appointments were approved at the Annual General Meeting. Since the election of Professor Dr Achleitner to the Supervisory Board at the Annual General Meeting held on 12 May 2011, the Supervisory Board again has a female member. Linde will seek to meet the objective it set itself in 2011 of the inclusion of two women on the Supervisory Board after the next scheduled elections to the Board. The Supervisory Board currently considers that two female Board members would be appropriate. This level of representation would be in line with the number of female executives with experience in the management of industrial companies, as well as with the proportion of women in the workforce of The Linde Group of around 20 percent and the proportion of women in senior management positions in the Group of around 11 percent.
The procedural rules of the Supervisory Board include rules regarding the independence of its members. In the past financial year, some members of the Supervisory Board have sat on the executive boards of companies with which Linde has business relationships and they continue to hold seats on those boards. Transactions with these companies took place under the same conditions as for non-related third parties. These transactions did not affect the independence of the Supervisory Board members concerned. All Supervisory Board members have a sufficient degree of independence.
Information about the members of the Supervisory Board and their memberships of other German supervisory boards and/or comparable German or foreign boards of business entities is given in Note [37] of the Notes to the Group financial statements. The CVs of Supervisory Board members are available on the Linde website.
The Supervisory Board appoints the Executive Board and monitors and advises the Executive Board in the running of its business operations. Executive Board decisions which are of fundamental importance to the Group require the approval of the Supervisory Board. In appointing the Executive Board, the Supervisory Board aims for diversity and, in particular, appropriate representation of women. The appointment of Messrs Lamba and Blades also takes into consideration the international operations of The Linde Group. Mr Lamba is an Indian national and Mr Blades a British national.
The Chairman of the Supervisory Board coordinates the work of the plenary Supervisory Board and chairs the meetings. He is responsible for ensuring that resolutions passed by the Supervisory Board and its committees are duly executed and he is authorised to issue the statements on behalf of the Supervisory Board required to implement the resolutions of the Supervisory Board and its committees. The Chairman of the Supervisory Board maintains close contact with the Chairman of the Executive Board throughout the year, sharing information and ideas.
Supervisory Board committees
The Supervisory Board has four committees. The committees do the groundwork for the plenary Supervisory Board. If it is permitted by law and laid down in the procedural rules of the Supervisory Board, decision-making powers may in individual cases be delegated by the Supervisory Board to these committees. The Chairman of the Supervisory Board is the Chairman of all the committees except the Audit Committee.
The Standing Committee, which comprises three shareholder representatives and two employee representatives, advises the Supervisory Board in particular on the appointment and removal of members of the Executive Board and on decisions regarding the remuneration system for the Executive Board, including the terms and conditions of employment contracts, pension contracts, any other contracts pertinent to the remuneration of Executive Board members, and the total remuneration of individual Executive Board members. Moreover, the Standing Committee is responsible for approving transactions with Executive Board members and related parties, as well as for approving other activities of the Executive Board members, especially the holding of positions on supervisory boards and comparable boards of business entities that are not part of The Linde Group. It also provides advice on long-term succession planning for the Executive Board and reviews the effectiveness of the work of the Supervisory Board on a regular basis.
The Audit Committee similarly comprises three shareholder representatives and two employee representatives. It does the groundwork for the decisions of the Supervisory Board regarding the adoption of the annual financial statements and the approval of the Group financial statements and makes arrangements with the auditors. It supports the Supervisory Board in the execution of its supervisory duties and monitors, in particular, the accounting process and the effectiveness of the internal control system, risk management system and internal audit system, as well as the statutory audit. It also deals with compliance issues. Moreover, it discusses the interim and half-year financial reports with the Executive Board prior to publication. The Audit Committee also makes a recommendation to the plenary Supervisory Board regarding the proposal for the election of the company’s auditors. The Chairman of the Audit Committee, Dr Clemens Börsig, is an independent financial expert with years of expertise in financial reporting and in internal control systems.
The Nomination Committee comprises the Chairman of the Supervisory Board, the Second Deputy Chairman of the Supervisory Board and one other shareholder representative. It makes recommendations to the Supervisory Board on proposed candidates for the election of shareholder representatives at the Annual General Meeting.
The Mediation Committee, formed under the provisions of the German Codetermination Law (MitbestG), comprises the Chairman of the Supervisory Board, the Deputy Chairman of the Supervisory Board, one shareholder representative and one employee representative. It makes suggestions to the Supervisory Board regarding the appointment of Executive Board members, if the required majority of two-thirds of the votes cast by Supervisory Board members is not obtained in the first ballot.
The Supervisory Board and its committees pass resolutions at meetings which are convened on a regular basis.
The names of those sitting on the Supervisory Board and on the Supervisory Board committees when the financial statements were being prepared are given here. Information about the activities of the Supervisory Board and its committees and about the work it has done with the Executive Board in the 2011 financial year is given in the Report of the Supervisory Board.
Further Information
The Members of the Supervisory Board more
Supervisory Board emoluments more
Report of the Supervisory Board for the fiscal year 2011 more
