APC 2003 Annual Report Download - page 35

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Following the Remunerations and Appointments
Committee’s report, the Board asked shareholders at
the Annual Meeting of May 16, 2003 to re-elect
James Ross, Piero Sierra, Michel François-Poncet
and Gérard de La Martinière as Directors. Mr.
François-Poncet and Mr. de La Martinière were re-
elected before their respective terms expired to avoid
re-electing too many Directors at one time in the
future.
The Board of Directors accepted Claude Bébéar’s
resignation for personal reasons on December 11,
2003. However, in light of Mr. Bébéar’s key role in
forming Schneider Electric and ensuring the Board’s
smooth operation, the Board would like to retain him
as a non-voting Director. As a result, shareholders
will be asked to modify the Company’s bylaws at the
Annual Meeting of May 6, 2004 to allow this appoint-
ment.
Acting on the Audit Committee’s report, the Board of
Directors approved the internal audit charter, as well
as a procedure to further ensure the Statutory
Auditors’ independence. The Board decided that
audit-related engagements by Schneider Electric
SA’s Statutory Auditors or units belonging to their
networks would require prior authorization from the
Audit Committee Chairman or the Executive Vice-
President, Finance.
Acting on the Remunerations and Appointments
Committee’s report, the Board approved the
Chairman’s compensation package, including the
degree to which his personal targets were met in
2002 and the rules governing his fixed and variable
compensation in 2003. The Board was informed of
the compensation policy for the Company’s senior
executives. It also decided to set up two new option
plans (21 and 22) and to issue shares to employees
under the 2003 worldwide Employee Stock Purchase
Plan.
Throughout the year, the Board monitored business
performance and progress in implementing the
NEW2004 program, restructuring plans and growth
plans, based on its review of the 2003 budget. It
ensured consistent compliance with market disclosure
requirements, notably through an analysis of market
consensus and the issuance of press releases.
The Board was also informed about the internal audit
through the Audit Committee’s report. It tracked the
share buyback program and decided to cancel 12
million shares on March 5, 2003.
Directors and corporate officers hold 0.007% of the
Company’s capital and 0.009% of the voting rights.
No related-party agreements have been entered into
between the Company and its Directors or officers.
No loans or guarantees have been granted to
Directors or officers by the Company.
4. Committees
of the Board of Directors
(members, operating
procedures and meetings)
The Board of Directors has drafted internal rules
governing the operating procedures and missions of
the Audit Committee and the Remunerations and
Appointments Committee.
Their members are appointed by the Board, based
on recommendations from the Remunerations and
Appointments Committee.
Audit Committee
Members
Gérard de La Martinière, Chairman, René Barbier de
La Serre, James Ross and Piero Sierra have been
the members of the Audit Committee since February
2003.
The Committee comprises only Independent Directors,
going beyond the requirements of the AFEP-MEDEF
corporate governance guidelines.
Responsibilities
The Audit Committee is responsible for preparing the
decisions of the Board of Directors, making recom-
mendations to the Board and issuing opinions on
financial, accounting and risk management issues.
As a result, it:
■Prepares the Board’s review of the annual and
interim financial statements. In particular, it:
– Ensures that accounting methods used to prepare
the consolidated and parent company financial state-
ments are appropriate and applied consistently, that
all significant transactions are properly reflected in
the consolidated financial statements and that the
rules governing the scope of consolidation are cor-
rectly applied.
– Analyzes risks, off-balance sheet commitments
and the cash position.
■Reviews draft versions of the annual and interim
reports.
■Makes recommendations, following consultation,
concerning the renewal or appointment of the
Auditors.
■Examines the scope of audit engagements and the
results of audits. It makes sure the Auditors have
acted independently, notably when reviewing fees
paid by the Group to their firm and network.
33