Annual Report 2017

Composition and mode of operation of the Board of Management

Daimler AG is obliged by the German Stock Corporation Act (AktG) to apply a dual management system featuring strict personal and functional separation between the Board of Management and the Supervisory Board (two-tier board). Accordingly, the Board of Management manages the company while the Supervisory Board monitors and advises the Board of Management.

Board of Management

In accordance with the Articles of Incorporation of Daimler AG, the Board of Management has at least two members. The precise number of Board of Management members is determined by the Supervisory Board. The Board of Management had eight members on December 31, 2017. In accordance with the German law requiring equal participation of women and men in executive positions, the Supervisory Board has defined a target for the proportion of women on the Board of Management and a deadline for achieving this target. The details are described in a separate section. With regard to the composition of the Board of Management, the Supervisory Board has also adopted a diversity concept that is embedded in an overall requirements profile. The details of this concept are also described in a separate section.

Information on the areas of responsibility and the curricula vitae of the Board of Management members are posted on the Daimler AG website at daimler.com/dai/bom. The members of the Board of Management and their areas of responsibility are also listed on this Annual Report.

Daimler AR2017 D.01 Governance structure

The Board of Management manages Daimler AG and the Daimler Group. With the consent of the Supervisory Board, the Board of Management determines the Group’s strategic focus, defines the corporate goals, and makes decisions concerning operational planning issues. The members of the Board of Management are bound to the interests of the Company and share responsibility for managing the Group’s entire business.

Irrespective of this overall responsibility, the individual members of the Board of Management manage their allocated areas on their own responsibility and within the framework of the instructions approved by the entire Board of Management. Specific issues defined by the Board of Management as a whole are dealt with by the Board as a whole, which must approve all related decisions. The Chairman of the Board of Management coordinates the work of the Board of Management.

The Board of Management prepares the consolidated interim reports, the annual company financial statements of Daimler AG, the annual consolidated financial statements, and the combined management report of the Company and the Group, as well as the separate combined non-financial report produced for Daimler AG and the Group. It ensures that the provisions of applicable law, official regulations and the Group’s internal guidelines are adhered to, and works to make sure that the companies of the Group comply with those rules and regulations. The Board of Management has also established an adequate compliance management system that takes into account the Company’s risk situation. The main features of this system are described on this the Annual Report. Such features include the Company’s whistleblower system, the BPO (Business Practices Office), which enables Daimler employees and external whistleblowers to report misconduct anywhere in the world. The tasks of the Board of Management also include establishing and monitoring an appropriate and efficient risk management system.

For certain types of transactions of fundamental importance as defined by the Supervisory Board, the Board of Management requires the prior consent of the Supervisory Board. At regular intervals, the Board of Management reports to the Supervisory Board on corporate strategy, corporate planning, profitability, business development and the situation of the Group, as well as on the internal control system, the risk management system and the compliance management system. The Supervisory Board has specified the information and reporting duties of the Board of Management.

The Board of Management has also given itself a set of rules of procedure, which can be seen on our website at daimler.com/dai/rop. Those rules describe, for example, the procedure to be observed when passing resolutions and ways to avoid conflicts of interest.

CASE Steering Committee

The Board of Management has formed a Steering Committee consisting of Board of Management members to address the future-oriented CASE topics of connectivity (Connected), driverless driving (Autonomous), flexible use and services (Shared & Services) and electric drive systems (Electric). The responsibilities of the Board of Management as a whole, in particular those regarding the catalog of issues that require its approval, as well as the areas of responsibility of individual Board members, remain unchanged despite the creation of the Committee.

The Steering Committee consists of the Chairman of the Board of Management, who is also responsible for Mercedes-Benz Cars, as well as the members of the Board of Management responsible for Finance & Controlling/Daimler Financial Services, Mercedes-Benz Cars Marketing & Sales and Group Research & Mercedes-Benz Cars Development. The Chairman of the Board of Management is also the Chairman of the Steering Committee. In line with the Committee’s structure as described above, the members of the Steering Committee on December 31, 2017, were Dr. Dieter Zetsche (Chairman), Bodo Uebber, Britta Seeger and Ola Källenius.

Within the framework of the strategic approach adopted by the Board of Management, the Steering Committee defines the management model and the strategic guidelines for CASE. The Board of Management has defined rules of procedure for the Steering Committee. The Committee can make changes to these rules on its own authority, provided such changes do not affect the steering model.

Along with the composition of the Steering Committee, the responsibilities of its Chairman, the responsibility for the rules of procedure and the options available for establishing other CASE bodies below the Steering Committee, the rules of procedure of the Steering Committee also define the structure and format of Committee meetings and the adoption of resolutions, as well as the rules on reporting to the Board of Management of Daimler AG.

Diversity

Diversity management has been part of the corporate strategy of Daimler since 2005. We rely on the diversity of our employees and the differences between them because such differences form the foundation of an effective and successful company. The aim of our activities is to bring together the right people to tackle our challenges, create a work culture that promotes the performance, motivation and satisfaction of our employees and managers, and help attract new target groups to our products and services. Our activities for shaping diversity at Daimler focus on three areas: best mix, work culture and customer interaction. With our measures, activities and initiatives for everything from training formats for employees and managers to workshops, conferences, guidelines and target group-specific communication and awareness-raising measures, our diversity management system makes a major contribution to the further development of our corporate culture.

Targeted support for women on the basis of the best-mix principle was a central component of our diversity management activities even before the legislation on the equal participation of women and men in management positions went into effect. Such support has also included and continues to include flexible working-time arrangements, company nurseries and special mentoring programs for women. To meet the new legal requirements, the Board of Management has defined targets for the proportion of women at the two management levels below the Board of Management and a deadline for achieving those targets. The details are described in a separate section. Independently of the legal requirements, Daimler continues to affirm the goal it already set itself in 2006 of increasing the proportion of women in executive positions at the Group to 20 % by 2020. At the end of 2017, this proportion amounted to 17.6 % (2016: 16.7 %).

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Composition and mode of operation of the committees of the Supervisory Board
Principles of our governance