Report of the Supervisory Board
Frank F. Beelitz
Chairman of The Supervisory Board
The Supervisory Board of Software AG supervised the Executive Board, and in consideration of all significant business events, also closely monitored the development of the Group, as required by the German Corporate Government Code, during fiscal year 2008. The Supervisory Board met six times. At least one session took place each quarter. All members of the Supervisory Board attended all sessions. The Supervisory Board took advantage of the option permitted by the Articles of Incorporation to adopt resolutions according to the written circulation procedure.
During these sessions, the Supervisory Board analyzed the ongoing business development and strategic direction of the Company in detail with the Executive Board. Any transactions requiring Supervisory Board approval in accordance with the Articles of Incorporation or applicable legislation were reviewed and approved, where appropriate.
Consultations covered the financial status of Software AG and its subsidiaries, the growth strategy of Software AG, the current and longer-term development of individual business segments, and the strategy for products, sales and marketing. The Supervisory Board also received written reports on business development from the Executive Board on a monthly basis.
The Supervisory Board includes the following committees:
- The Committee for Compensation and Succession Issues
- The Audit Committee
- The Nomination Committee
The Committee for Compensation and Succession Issues met three times, the Audit Committee and Nomination Committee each met once.
The Supervisory Board continuously held detailed deliberations on the subject of corporate governance and the German Corporate Governance Code in the course of several meetings during fiscal year 2008. The Supervisory Board and Executive Board took the necessary steps to continue to comply in full with the recommendations of the Code during the year under review. Remuneration of Executive and Supervisory Board members is again reported individually for fiscal year 2008. (Please view details)
The declaration pursuant to Section 161 of the German Stock Corporation Act (AktG) issued jointly with the Executive Board states that in 2008, Software AG complied with the recommendations of the Code in the version dated June 14, 2007, as well as the most recent version of June 6, 2008, without exception and will continue to do so in the future. This declaration of compliance has been made public on the Company’s website.
In 2008, the efforts of the Supervisory Board were primarily influenced by the growth strategy and the changes needed to achieve the targeted growth:
- The meeting in March 2008 was in preparation for the Annual Shareholders’ Meeting, which took place on April 29, 2008 in Darmstadt.
- In April and August 2008, changes to the Rules of Procedure for the Executive Board were decided as a result of personnel changes in the Executive Board. The sales organizations of the webMethods and ETS business divisions were realigned to two Executive Board members each of whom manages different regional territories. The Professional Services unit was assigned its own Executive Board member.
- In the meetings in the second half of 2008, in July, October and December, the various aspects of the Company strategy for products, partners, acquisitions and communication were discussed in depth.
In accordance with a resolution adopted at the Annual Shareholders’ Meeting, the Supervisory Board appointed BDO Deutsche Warentreuhand Aktiengesellschaft, Frankfurt am Main, to audit the financial statements and the consolidated financial statements of Software AG for fiscal year 2008.
BDO Deutsche Warentreuhand Aktiengesellschaft, Frankfurt am Main, examined the financial statements, consolidated financial statements and management report for the year ended December 31, 2008, including the accounting books and records. The auditors issued an unqualified audit option.
The audit reports were presented to the Supervisory Board, and the head of the audit team explained the results in person to the Audit Committee. The Audit Committee and the Supervisory Board thoroughly reviewed the audit results in their meeting of March 13, 2009. The Supervisory Board concurs with the results of the audit and approves the financial statements and consolidated financial statements. This constitutes formal approval and acceptance of the annual financial statements. We, the Supervisory Board, concur with the recommendation of the Executive Board with respect to the appropriation of profits.
The following personnel changes took place on the Executive Board and Supervisory Board of Software AG in 2008:
David Mitchell left the Company by mutual agreement on April 30, 2008.
Effective October 1, 2008 Holger Friedrich was appointed as a member of the Executive Board and took on global responsibility for the Professional Services unit.
The term of office of Justus Mische ended at the Annual Shareholders’ Meeting on April 29, 2008. Mr. Mische had been a member of the Supervisory Board since December 9, 2002. Upon the recommendation of the Supervisory Board, the shareholders appointed Willi Berchtold as the successor to Justus Mische. Mr. Berchtold is Executive Officer of Finance, Controlling and Information Technology at ZF Friedrichshafen AG.
The Supervisory Board would like to thank the outgoing members for their dedication and reliable cooperation.
The Supervisory Board would also like to thank the Executive Board and all employees for their commitment, as well as their achievements, during fiscal year 2008.
Darmstadt, March 2009
The Supervisory Board
Frank F. Beelitz
Chairman
Please refer to the Notes for additional information on the members of the Supervisory Board.
