APC 2006 Annual Report Download - page 35

2
Corporate
governance
1. Supervisory Board
The Supervisory Board may have between three
and eighteen members, all of whom must be natural
persons.
Throughout their term, Supervisory Board members
must hold at least 250 Schneider Electric SA shares.
Supervisory Board members are elected for a four-
year term and are eligible for re-election. However, in
line with the AFEP-MEDEF recommendation that
Supervisory Board members should retire by rotation,
one half of the members of the first Supervisory Board
were elected for an initial term of two years.
The age limit for holding office as a member of the
Supervisory Board is 74 and no more than one third of
the members may be aged over 70.
The Supervisory Board elected on May 3, 2006 has
twelve members and one non-voting member. Nine
qualify as independent directors according to the defi-
nition contained in the AFEP-MEDEF report on corpo-
rate governance. Four are foreign nationals (from the
United States, the United Kingdom, Italy and Switzer-
land). Employee shareholders are represented by a
member who sits on the Supervisory Board of the
"Schneider Actionnariat" corporate mutual fund. The
average age of Supervisory Board members is 62.
This report includes the Chairman’s report
on the operations of the Supervisory Board
and internal control.
A Management Board/
Supervisory Board system
To achieve a seamless transfer of powers to a new
Chairman and support the ongoing implementation of
the Group’s growth strategy, at the Annual Share-
holders’ Meeting of May 3, 2006, the Board of Direc-
tors recommended changing to a two-tier manage-
ment structure, with a Management Board and a
Supervisory Board. Shareholders approved this rec-
ommendation and voted to amend the Company’s
bylaws accordingly, as well as electing the members
of the new Supervisory Board. After the Annual
Shareholders’ Meeting, the new Supervisory Board
met to appoint the members of the Management
Board.
The Company applies AFEP-MEDEF corporate gover-
nance guidelines.
1. Supervisory Board . . . . . . . . . . . . . . . . . .  p. 33
2. Organizational and operating procedures
of the Supervisory Board . . . . . . . . . . . . .  p. 38
3. Board of Directors' meetings in 2006 and
early 2007 . . . . . . . . . . . . . . . . . . . . . . . . .  p. 39
4. Committees of the Supervisory Board . . .  p. 40
5. Management Board members . . . . . . . . .  p. 42
6. Management Board procedures . . . . . . . .  p. 43
7. Declarations concerning the situation
of the members of the Supervisory Board
and Management Board . . . . . . . . . . . . . 
p. 43
8. Internal control . . . . . . . . . . . . . . . . . . . . .  p. 44
9. Management interests and compensation

p. 50
10. Regulated agreements . . . . . . . . . . . . . .  p. 54
11. Auditors . . . . . . . . . . . . . . . . . . . . . . . . .  p. 55
12. Shareholders' rights and obligations . . .  p. 55
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