APC 2004 Annual Report Download - page 31

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Schneider Electric has adopted a code of ethics for
Directors and employees designed to prevent insider
trading. Under the terms of this code, both Directors
and employees are barred from trading shares in
companies for which they have information that has
not yet been made public. In addition, they may not
trade Schneider Electric SA shares during the 30
days preceding publication of the annual and interim
financial statements, nor may they engage in any type
of speculative trading involving Schneider Electric SA
shares. This includes margin trading, trading in
options and warrants and purchasing and re-selling
securities in a period of less than four months.
Board meetings
in 2004 **
Six meetings were scheduled in 2004 and seven were
held. The meetings lasted an average of 2 hours and
50 minutes and the average participation rate was
96%. They were primarily devoted to strategic issues,
reviewing business performance, the financial state-
ments and the Company's corporate governance, and
preparing the Annual Shareholders' Meeting.
The Board conducted an in-depth review of the
Company's strategy in a one-day meeting devoted
entirely to this topic. Additional analyses of certain
issues were requested and these were presented to
the Board at subsequent meetings. At all of its meet-
ings the Board tracked deployment of this strategy,
authorizing the acquisition of Kavlico and Andover
Controls and reviewing the procedures for integrating
newly-acquired businesses, based on a report pre-
pared by the Audit Committee.
Throughout the year, the Board monitored business
performance and progress in implementing restruc-
turing plans, based on the 2004 budget. It reviewed
the Company's financial information policy and
ensured consistent compliance with market disclosure
requirements, notably through an analysis of market
consensus and the issuance of press releases.
After reviewing the results of the New2004 program
covering the period 2002-2004, the Board examined
the new2plan for the years 2005-2008.
The Audit Committee reported to the Board on the
work carried out by the internal auditors.
At its meeting on February 19, 2004, the Board of
Directors closed the 2003 accounts, based on the
Audit Committee's report and after seeking the opin-
ion of the external Auditors who attended the meeting.
The meeting that closed the 2003 accounts also set
the dividend to be submitted for shareholder approval
at 1.1 per share, plus a tax credit of 0.55, for a
total payment of 1.65 per share. The Board
reviewed the interim financial statements for the six
months ended June 30, 2004 according to the same
procedure.
In the area of corporate governance, the Board
reviewed its activities in 2003 and the response to the
self-assessment carried out in the fall of 2002, con-
cluding that highly positive steps had been taken.
The Board discussed its membership and that of the
Committees of the Board. Based on a proposal by the
Remunerations and Appointments Committee, the
Board decided that Gérard de La Martinière qualified
as an independent Director in light of his new position
as President of Fédération Française des Sociétés
d'Assurances. The Board decided to recommend at
the Annual Shareholders' Meeting the re-election as
Directors of Daniel Bouton, Thierry Breton, Willy
Kissling and Piero Sierra, as well as of Alain Burq,
who represents employee shareholders. It also decid-
ed to recommend electing as Director Chris
Richardson, to replace James Hardymon who chose
to stand down, and Caisse des Dépôts et
Consignations - Schneider Electric SA's largest
shareholder - represented by Jérôme Gallot. Caisse
des Dépôts et Consignations, which owns just under
5% of Schneider Electric, qualifies as an independent
Director. The Board appointed Willy Kissling to the
Remunerations and Appointments Committee to fill
the seat left vacant by James Hardymon's retirement.
The Board decided to propose at the Annual
Shareholders' Meeting an amendment to the bylaws
creating the position of censeur (non-voting Director)
in order to appoint Claude Bébéar to this position.
The appointments of the Auditors expired at the 2004
Annual Shareholders' Meeting and the Board of
Directors decided, on the recommendation of the
Audit Committee, to adopt an auditor rotation policy. In
line with this policy and in accordance with article
L.225-228 of the Commercial Code, the Board rec-
ommended renewing the appointment of Barbier
Frinault et Autres (Ernst & Young) and appointing
Mazars & Guérard to replace Pricewaterhouse-
Coopers Audit.
After discussing the Remunerations and Appoint-
ments Committee's report in the Chairman's absence,
the Board approved the Chairman's compensation
package, including the degree to which his personal
targets were met in 2003 and the rules governing his
fixed and variable compensation for 2004. The Board
was informed of the compensation policy for the
Company's senior executives. It also decided to set up
two new option plans (23 and 24) and to issue shares
to employees under the 2004 worldwide Employee
Stock Purchase Plan.
Corporate Governance