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MAIN ASPECTS OF THE SUPERVISORY BOARD’S WORK
DURING 2003
In its four regular meetings and one extraordinary
meeting, the Supervisory Board discussed in depth
the progress of the SAP Group, individual lines of business,
and major SAP Group subsidiaries.
At these meetings, the Supervisory Board
received full and timely reports from the Executive Board on
all matters that require the Supervisory Board’s note or
approval under the law, the Company’s Articles of Incorporation,
or the list of transactions that the Supervisory Board
requires the Executive Board to submit for approval, as well as
on the Company’s current economic position, the risk situation
and risk management, revenue and results, progress made
by the business segments, and the annual budget, including
financial, investment, and personnel planning.
During 2003, the Supervisory Board concentrated
on a number of specific areas. It took a close interest in
SAP’s technological reorientation to SAP NetWeaver and
Enterprise Services Architecture and the implementation of
the strategy for small and midsize businesses.
Another key activity of the Supervisory Board
was agreeing and monitoring the Executive Board’s strategic
measures in response to consolidation in the software industry.
In addition to other subjects that it discussed in detail, the
Supervisory Board devoted particular attention to the SCORE
initiative – the Strategic Cross-Organizational REalignment of
SAP’s development functions.
The Supervisory Board believes that, in implementing
these measures, the Executive Board has made the
right choices to fully meet customers’ needs and to consolidate
and enhance SAP’s market position in 2004.
EFFECTIVE COMMITTEE WORK ENABLES THE SUPERVISORY
BOARD TO DEAL SUCCESSFULLY WITH CORE
TOPICS
To ensure that the work of the full Supervisory Board
is efficient, various matters are delegated to six Supervisory
Board committees. The committees discuss particular topics
and prepare them so that decisions can be made by the full
Supervisory Board. Within the limits set by law and SAP’s
Articles of Incorporation, the full Supervisory Board has delegated
decision-making powers to the committees in certain
circumstances. The full Supervisory Board took regular
reports on the work of the individual committees in 2003.
The Supervisory Board kept in place the
committee structure that it set up in 2002. In detail, this comprises
the Mediation Committee pursuant to the German
Codetermination Act, section 27 (3), the General Committee,
the Compensation Committee, the Finance and Investment
Committee, the Audit Committee, and the Technology
Committee.
The Mediation Committee, required by law,
did not need to meet during 2003.
The General Committee met once to decide
the allocation of stock options to SAP employees who are not
Executive Board members.
The Compensation Committee held four
meetings to discuss various matters relating to the members of
the Executive Board. It also critically examined SAP’s Principles
of Corporate Governance and, in particular, its compensation
package in light of the amended German Corporate Governance
Code.
The Finance and Investment Committee met
once for in-depth discussion of venture capital investments,
the investment life-cycle process, and transactions of SAP AG
and its subsidiaries involving shareholdings.
At its five meetings, the Audit Committee
mainly discussed the implementation of the requirements of
the U.S. Sarbanes-Oxley Act and examined in detail the control
mechanisms for timely recognition of risks. Working closely
with the auditor, the Audit Committee defined the focuses of
the audit for the coming fiscal year.
The Technology Committee met three times
to monitor and analyze technological developments and
examine SAP’s medium and long-term technological orientation
and strategy. Intensive discussions with Executive Board
members during meetings of the Technology Committee
raised the efficiency of its work and strengthened its supporting
and consultative role relating to SAP’s future strategy.
The changes to the members of the Supervisory
Board meant that membership of the Mediation Committee,
General Committee, Compensation Committee, and
Finance and Investment Committee also changed. |
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