Deutsche Telekom AG - The 2009 financial year

Working methods of the Supervisory Board. The Supervisory Board advises the Board of Management on issues concerning the governance of the Company and supervises and reviews its activities. The Supervisory Board is directly involved in all decisions of strategic importance to the Company. The work of the Supervisory Board is specified in the Rules of Procedure. To clarify the reporting requirements on the part of the Board of Management, the Supervisory Board has defined a catalog of trans- actions subject to approval. This catalog forms an integral part of the Rules of Procedure for the Supervisory Board and the Board of Manage- ment, respectively. The Supervisory Board of Deutsche Telekom AG consists of twenty members, ten representing the shareholders and ten representing the employees. The Supervisory Board members representing the shareholders are elected by the shareholders’ meeting by simple majority. As in previous years, the elections to the Supervisory Board were held on an individual basis at the last shareholders’ meeting on April 30, 2009. The terms of office of the individual Supervisory Board members representing the shareholders end on different dates. This makes it possible to adjust the composition of the Supervisory Board of Deutsche Telekom AG to respond rapidly to any changes in requirements. The Supervisory Board members representing employees were most recently elected by the employees at the delegates’ assembly on December 4, 2008 according to the provisions of the German Codetermination Act (Mitbestimmungs- gesetz – MitbestG). For details about replacements of Supervisory Board members during the reporting period, please refer to the Supervisory Board’s report to the shareholders’ meeting on page 30–38 of the Annual Report. The Supervisory Board is convinced that – in accordance with a recommendation by the German Corporate Governance Code – it has a sufficient number of independent members to provide impartial advice to and to monitor the Board of Management. The Supervisory Board once again carried out an examination of its effi- ciency in the 2009 financial year. The Supervisory Board carried out its self-assessment based on a comprehensive questionnaire and individual discussions with the Chairman of the Supervisory Board. The Supervisory Board has set an age limit according to which, as a rule, no person shall be proposed to the shareholders’ meeting for election to the Supervisory Board if during his or her term of office that person would reach 72 years of age. To the extent permitted by law, the Supervisory Board makes use of modern communication media to expedite its work and accelerate decision-making process in the interests of the Company. The Chairman of the Supervisory Board coordinates the work of the Super- visory Board and presides over its meetings. Over and above his organi- zational duties in the Supervisory Board, the Chairman of the Supervisory Board maintains regular contact with the Chairman of the Board of Manage- ment and with the Board of Management as a whole, in order to stay informed about the Company’s strategy, business developments, risk management policy and management measures, and to discuss these with the Board of Management. In this context, the Chairman of the Board of Management advises the Chairman of the Supervisory Board of all events that are signifi- cant to the situation, development, and governance of the Company. For further details on the work of the Supervisory Board, please refer to the Supervisory Board’s report to the shareholders’ meeting on pages 30–38 of the Annual Report. Working methods and composition of the Board of Management and Supervisory Board committees. The Board of Management has set up two permanent committees to perform its tasks efficiently. First, the Board of Management Capital Expenditure Committee. This committee is responsible for the optimum allocation of resources from a business and strategic perspective, and supports the Group Board of Management in setting the capital expendi- ture and project budgets. The Group Board of Management is represented on this committee by the Chief Financial Officer (committee chairman until March 2009) and the Chief Operating Officer (committee chairman from April 2009). The remaining members are the Financial Directors of Southern and Eastern Europe, United States, COO/Europe, Germany and T-Systems, and the Heads of Group Controlling and Group Strategy. The second committee is the Mergers and Acquisitions Committee. Working on behalf of the Group Board of Management, this committee decides on the execution of transactions, within value thresholds, and monitors integration once the transactions have been executed. The members of this committee are the Chairman of the Board of Management (committee chairman), the Chief Financial Officer, the Chief Human Resources Officer, and the Heads of Mergers & Acquisitions, Group Strategy, and Global Business Development. 41To our shareholders Corporate governance