Annual Report 2007
Report of the Supervisory Board
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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 Governance Code during the fiscal year 2007. The Supervisory Board met nine times during the year under review, of which one meeting was a telephone conference. At least one session took place each quarter. All members of the Supervisory Board attended all sessions.
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 acquisition strategy of Software AG, the current and longer-term development of the individual business segments, and the corresponding strategies 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 (since December 14, 2007)
The Committee for Compensation and Succession Issues met six times, and the Audit Committee met twice during 2007. The Nomination Committee convened for the first time on January 18, 2008.
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 2007. The Supervisory and Executive Boards 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 2007 (refer to the Remuneration Report).
The declaration pursuant to Section 161 of the German Stock Corporation Act (AktG), issued jointly with the Executive Board, states that in 2007 Software AG complied with the recommendations of the Code in the version dated June 12, 2006, as well as the most recent version of June 14, 2007, without exception and will continue to do so in the future. This declaration of compliance has been made public on the Company's website www.softwareag.com.
In 2007, the efforts of the Supervisory Board of Software AG were primarily focused on the acquisitions undertaken by the Company with the objective of expanding the product portfolio and stabilizing the Group's growth:
- The meetings in March 2007 were in preparation for the Annual Shareholders' Meeting, which took place on May 11, 2007 in Frankfurt, and the acquisition of SPL Software in Israel.
- In the meeting in April 2007, the resolution to acquire webMethods, Inc., in Fairfax, USA, laid the foundation for the technological expansion of the product portfolio and hence for sustainable medium-term to long-term growth for Software AG.
- In the meetings in May and July 2007, a new Management Incentive Plan was discussed and adopted to support the integration of the acquired companies.
- In another meeting in July 2007, a fundamental reorganization of Executive Board responsibilities was adopted. In this connection, Software AG discontinued its existing regional sales structure and aligned the entire Company in accordance with the two business divisions webMethods and Enterprise Transaction Systems (ETS). Since then, each of the two business lines is represented by two Executive Board members: one for development and one for sales.
- In October 2007, the Supervisory Board decided to conclude an asset deal with Jacada Ltd., Israel.
