APC 2005 Annual Report Download - page 38

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Article 4 defines the status of Directors and their
responsibilities. These include:
Representing all shareholders and acting in the cor-
porate interest.
Submitting their resignation when they have not par-
ticipated in more than half the Board meetings.
Respecting an obligation of confidentiality.
Requesting any documents needed to fulfill their
responsibilities and meeting with Company execu-
tives as required.
Reporting conflicts of interest.
Owning at least 250 shares of Company stock.
Complying with strict rules governing trading in
Schneider Electric shares.
Disclosing on a timely basis any transactions involv-
ing Schneider Electric shares.
Attending the Annual Shareholders' Meeting.
Articles 5 to 7 apply to the Board Committees and
are described in the corresponding section below.
Article 8 defines the scope of the internal rules and
procedures.
To ensure that Board members are fully prepared, the
Company sends them the meeting agenda ten days
before upcoming Board meetings, along with draft
minutes of the previous meeting. Four to five days
beforehand, the Directors also receive a Board meet-
ing file, which may include financial statements when
appropriate (the deadline is shorter, however, for the
interim financial statements). The file includes notes
or the text of presentations scheduled on the agenda,
as well as, when appropriate, any draft reports and
the consolidated or parent company financial state-
ments. A supplementary file may also be provided at
the meeting.
Between meetings, aside from conversations they
may have with the Chairman, Board members receive
a monthly Letter to Directors, a weekly press review,
all of the Company's press releases, financial ana-
lysts' reports and other documents.
Directors also have the opportunity to meet informally
with key members of senior management prior to
Board meetings. In addition, new Directors attend
training and information sessions dealing with the
Company's strategy and businesses.
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
2005 and early 2006**
Six meetings were held in 2005. The meetings lasted
an average of 3 hours and 15 minutes and the aver-
age participation rate was 88%. They were primarily
devoted to strategic issues, reviewing business per-
formance, the financial statements and the Compa-
ny's corporate governance, and preparing the Annual
Shareholders' Meeting.
The Board conducted an in-depth review of the Com-
pany’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 meetings
the Board tracked deployment of this strategy, author-
izing the acquisition of Power Measurement Inc., BEI,
Juno Lighting Inc., and ABS EMEA, Invensys’ building
automation business in Europe and the Middle East.
Throughout the year, the Board monitored business
performance based on the 2005 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.
The Board was informed about the action plans
deployed under the new2program for the years 2005-
2008.
After reviewing the Company’s financial strategy, the
Board authorized a two-tranche, 1.5 billion bond
issue, carried out in August 2005. This issue extend-
ed the average maturity of the Group’s debt while low-
ering the average cost.
The Audit Committee reported to the Board on the
work carried out by the internal auditors.
At its meeting on February 16, 2005, the Board of
Directors closed the 2004 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 2004 accounts also set
the dividend to be submitted for shareholder approval
at 1.80 per share. The Board reviewed the interim
financial statements for the six months ended June
30, 2005 according to the same procedure.
In the area of corporate governance, the Board
reviewed its activities in 2004 and decided to perform
another self-assessment. The Board Secretary assist-
ed with this assessment in the fall of 2005 by admin-
istering a questionnaire to the Board Members provid-
ed by the Remunerations and Appointments & Corpo-
rate Governance Committee. The questions con-
cerned the Board of Directors’ membership, missions
and operating procedures; its relations with the Chair-
man and CEO; and the Committees’ organization and
**Paragraphs 2 through 5 make up
the Chairman’s report prepared in accordance with article
L225-37 of the French Commercial Code.