Siemens is a multinational company with its headquarters in Munich and is considered to be among the best industrial manufacturing firm across Europe. The company was founded in 1847 by Werner Von Siemens, and it concentrates on various products such as Power generation technology, buildings, and industrial automation, railway vehicles, water treatment systems, PLM software, medical technology, and fire alarms. Moreover, the firm provides services such as project engineering, financing, construction, and business services, with approximately three hundred and eighty-five hundred employees across the globe. The net income in 2019 was equivalent to 5.648 billion Euros justifying the company’s success in its operations in the conglomerate industry. The company’s vision is to concentrate on future aspirations to attain sustainable success, as it believes that ethical standards and the highest performance can lead to profitable growth while tackling shareholders’ requirements. The firm values include being responsible, which involves a commitment to responsible and ethical actions, being excellent, attaining great results and achieving high performance, and being innovative, which include creating sustainable value. To achieve lasting success, the company integrates values, mission, and vision in decision making. On the other hand, Siemens’ mission involves making real what matters to build a strong brand, and top executives have well-defined roles to help in achieving company’s mission, vision, and values.
Managing Board
Siemens has a two-tier board structure since it is under German corporate law, and the two boards include Managing Board and a Supervisory Board, including both internal and external directors. Siemens has a managing board that serves the company’s interests and ensures the corporation achieves sustainable growth. Siemens is subject to German corporate; thus, it has a top executive body that makes decisions on issues affecting the firm such as corporate strategy, business policy, annual as well as multi-year plans (“Corporate Governance” 2020). This aspect implies that the managing board does not include all stakeholders in making critical decisions in the firm. Vision statements define what organizations desire to accomplish as an impact of the realization of the mission (Aguinis, 2013). Therefore, mission an expansive articulation depicts the cohesiveness of an association, regardless of whether organizations do different and shifted sorts of work in their divisions. Regarding this, the company work towards upholding ethical standards and achieving the highest performance. Therefore, the managing board ensures that the company’s values are upheld and makes the decision to ensure the firm meets sustainable growth. Moreover, the managing board prepares quarterly, semi-annually, and annually financial statements and reports to the supervisory board.
Delegate your assignment to our experts and they will do the rest.
Supervisory Board
The supervisory board is the supervising body that approves and reviews financial statements, and it is comprised of twenty members and seven committees. The primary duties of the Supervisory Board include overseeing and advising the Managing Board, discussing business development, strategizing, planning as well as implementing the strategies (“Corporate Governance,” 2020). Therefore, this panel assesses company’s reports, such as consolidated and annual financial statements and pooled management reports. Additionally, the board decides on proposals for appropriation net income later reporting to shareholders during their annual meetings. The statements of purpose set up a system for the conduct of those working in the organization and aid in setting performance standards that guide employees in making decisions at different levels of a company ( Alawneh, 2015 ). Regarding this, the supervisory board ensures that the company operations are aligned with the set values, mission, and vision. Therefore, the board has both internal directors and external directors who are well qualified to depend on their positions and do not have a conflict of interest, and in case such a scenario arises, one notifies the board. As of November 2019, Siemens has issued eight hundred and fifty million registered shares, with six percent being unidentified investors, another six by Siemens family, twenty-one percent private investors, and sixty-seven institutional investors (“Shareholder Structure & Voting Rights Announcements” par. 3). This representation illustrates that both family ownership and institutional shareholders are represented on the board to ensure their interests are protected. The firm’s vision statement include fulfilling stakeholders’ requirements; thus this move will guarantee stakeholders satisafaction.
Siemen's key stakeholders include suppliers, communities, media, policymakers, shareholders, customers, academia, and some policies that govern them. Annually, there is a shareholders’ meeting where financial reports are read, and they elect their representatives in the Supervisory board to protect their interests (“Corporate Governance” par.4). The involvement of all stakeholders in decision making would be tedious and time-consuming since the company operates in approximately two hundred countries. Moreover, some stakeholders are not knowledgeable about how the corporations should be run to maximize profits; thus, involving them would make misleading decisions. Since the Supervisory board carries out significant tasks in the company, it comprises twenty members, with ten being shareholders and others are the company’s employees. The company’s vision involves attaining stakeholder’s requirements; therefore, the selection of a stakeholder representative in the Supervisory board guarantees measurable achievement (Aguinis, 2013). The shareholders elect their representatives during the Annual Shareholder’s meeting following the German Codetermination Act to ensure their interests are protected. Moreover, the two boards in the company have committees that have different responsibilities in ensuring that the company maximizes opportunities. Considering the firms have various values that include accountability, innovation, and excellence, the two boards work collaboratively to ensure the company achieves its objectives.
Committees
Siemens has several committees, including the audit committee and others, to enhance corporate governance without violation of laws. The managing board has an Equity and Compensation Committee that is accountable for the obligations designed by the managing board, and it consists of the CEO, the president, Chief Financial Officer, Consultative member, Chief Human Resources Officer, as well as the Chief of Staff of the company (“Corporate Governance” par.4). Therefore, the managing board plays a significant role in ensuring business integrity, and it informs and reports to the supervisory board and shareholders during the annual general meeting. Corporate governance defines the accountabilities and the responsibilities utilized by stakeholders in overcoming the conflicts of interests intrinsic in corporations, thus, ensuring transparency. The threat of having a defective mission statement is its failure to help direct the activities of the company and define a company's primary objectives and purpose ( Alawneh, 2015 ). Regarding this, imperfect statements influence the improvement of the unit's statement of purpose as well as subsequent individual's expected set of responsibilities and objectives. The statements of purpose set up a system for the conduct of those working in the organization and aid in setting performance standards that guide employees in making decisions at different levels of a company. Concerning this, the management board directs the equity and compensation committee relating to its vision, mission, and values.
On the other hand, the Supervisory board has seven committees that perform different functions such as chairman’s committee that makes proposals dismiss and appoint managing board members, as well as looks at issues that deal with conformity with the codes and makes recommendations to the overall board (“Corporate Governance” par.4). The compensation committee makes proposals to the supervisory board concerning compensations of the Managing Board members and approves annual compensation reports. The audit committee oversees accounting issues and discusses problems with the auditors and the managing board, whereas the nominating committee makes a recommendation on suitable shareholders representatives for election. The mediation committee proposes to the Supervisory Board in case it does not meet the two-thirds for dismissal or appointment Managing Board members. In contrast, the innovation and finance committee discusses the company’s financial structure and situation and focuses on strategies to maximize resources and prepare discussions for the Supervisory Board. From the committees’ responsibilities, it is clear that the company produces annual financial reports and publicly discloses financial information. Moreover, the company upholds human rights and exhibits environmental and social responsibility per global corporate social responsibility policy. A vision is future-situated and gives a feeling of what the organization values to those both outside and inside the company, and in this regard, vision statements are used to coordinate strategic objectives, they rarely change ( Alawneh, 2015) . Regarding this, the seven committees work collaboratively while keeping in mind the firm’s values, mission, and vision.
Conclusion
Vision and mission statements act as the will power for the organization to achieve its goals and objectives. Siemens operates under German Corporate law that recognizes two board, Managing board as well as Supervisory board. The latter ensures that the company complies with official regulations, statutory provisions, as well as internal set policies and appoints members of the Managing board. The Supervisory board comprises seven committees that work collaboratively to ensure transparency and accountability to ensure all stakeholders’ interests are protected. Stakeholders are represented in the Supervisory Board, and the company exhibits social and environmental responsibility as well as upholds human rights. Stakeholders vary from one firm to another. They majorly include shareholders, financiers, suppliers, management executives, community, and the government; therefore, they need to provide a framework to ensure the firm attains it objective by balancing interests of all party involved. Regarding this, the management executives should have definite roles that ensure that they make an informed decision aligned to the firm’s mission, value, and vision while avoiding conflict of interest.
References
“ Corporate Governance” Siemens. https://new.siemens.com/global/en/company/investor-relations/corporate-governance.html#GermanCorporateGovernanceCode
“ Shareholder Structure & Voting Rights Announcements” Siemens. https://new.siemens.com/global/en/company/investor-relations/share-bonds-rating/shareholder-structure-voting-rights-announcements.html.
Aguinis H. (2013). Performance Management . Accessed 25 TH February 25, 2020. https://mail.google.com/mail/u/0/#inbox/FMfcgxwGDWrhxPtnVtwRflrlgmPZXwpq?projector=1&messagePartId=0.2 .
Alawneh, A. A. (2015). The Impact of Mission Statement on Performance: An Exploratory Study in the Jordanian Banking Industry. Journal of Management Policy & Practice , 16 (4). https://www.researchgate.net/profile/Ammar_Al_Alawneh/publication/331703079_The_impact_of_mission_statement_on_performance_An_exploratory_study_on_the_Jordanian_Banking_Industry/links/5c88cd4fa6fdcc38174fb754/The-impact-of-mission-statement-on-performance-An-exploratory-study-on-the-Jordanian-Banking-Industry.pdf
