APC 2006 Annual Report Download - page 40

conducting Board meetings (notice of meeting, meth-
ods of participation, minutes, etc.).
Article 4 defines the role and powers of the Supervi-
sory Board’s Chairman. The Chairman leads the work
of the Board and is regularly informed by the Manage-
ment Board’s Chairman of material events and devel-
opments in the life of the Group.
Article 5 concerns the information received by the
Supervisory Board. It stipulates that Supervisory
Board members shall receive any and all information
required to enable them to fulfill their duties and that
they may request any and all necessary or relevant
documents prior to any meeting of the Board. The arti-
cle also describes the content of the Management
Board’s quarterly reports to the Supervisory Board, to
be drawn up in accordance with article L.225-68 of the
French Commercial Code.
Article 6 defines the status of Supervisory Board
members. Corresponding to the director’s charter con-
tained in the AFEP-MEDEF corporate governance
guidelines, it states that Supervisory Board members
must:
Represent all shareholders and act in the corporate
interest.
Resign from the Board when they have not partici-
pated in more than half the Board meetings.
Comply with an overall obligation of confidentiality.
Report any and all conflicts of interest.
Hold at least 250 shares of Company stock.
Comply with strict rules governing transactions in
Company stock (in particular, no transactions may be
carried out during the month before the annual or half-
yearly results are announced).
Attend Shareholders' Meetings.
Article 7 states that non-voting members, who attend
Supervisory Board meetings in a consultative capaci-
ty, are subject to the same ethical rules as voting mem-
bers.
Articles 8 to 10 concern the Board Committees and
are described in the corresponding section below.
Articles 11 and 13 define the scope of the internal
rules and procedures.
Article 12 allows for the Management Board to allo-
cate management tasks among its members, with the
Supervisory Board’s authorization.
To ensure that Board members are fully prepared, the
Company sends them the meeting agenda ten days
before upcoming Board meetings, along with draft min-
utes of the previous meeting. Four to five days before-
hand, the members also receive a meeting file. The file
for the meeting held to approve the annual or interim
financial statements includes the financial statements
approved by the Management Board (in the case of
the interim financial statements, the file may not be
available until closer to the meeting date). 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 finan-
cial statements. A supplementary file may also be pro-
vided at the meeting.
Supervisory Board meetings are attended by the
members of the Management Board and Executive
Committee members may be invited to make presen-
2. Organizational
and operating procedures of
the Supervisory Board**
The Supervisory Board exercises ongoing control over
the Management Board’s management of the Compa-
ny, in accordance with French law. To this end, it per-
forms all the checks and controls that it considers
appropriate and obtains copies of any and all docu-
ments that it considers necessary to allow it to fulfill its
duties.
Specific powers are vested in the Supervisory Board
under French law and the Company’s bylaws. These
include the power to:
Appoint the Management Board, determine the num-
ber of members and their compensation and designate
the Chairman.
If necessary, remove Management Board members
from office.
Authorize debt and equity financing transactions that
will have a substantial effect on the Company’s bal-
ance sheet structure.
Authorize material business acquisitions and dis-
posals.
Authorize the creation of stock option plans or stock
grant plans.
Authorize the signature of regulated related party
agreements.
Authorize the issuance of bonds and other guaran-
tees, subject to compliance with French law.
The Supervisory Board may appoint one or two non-
voting members to assist it and/or decide to create
Committees of the Board. It draws up internal rules
and procedures covering its activities, and decides the
allocation of the total attendance fees awarded to the
Supervisory Board by the shareholders in General
Meeting.
The Supervisory Board’s internal rules and proce-
dures adopted on May 3, 2006 – which include the
internal rules and procedures of the Board committees
(the Remunerations and Appointments & Corporate
Governance Committee and the Audit Committee) as
well as the directors' charter recommended under
AFEP- MEDEF corporate governance guidelines –
comprises 13 articles:
Article 1 defines the Board's role and powers (see
above). It also specifies the Management Board deci-
sions that require the prior approval or consultation of
the Supervisory Board.
Article 2 defines the principles applied by the Board
concerning the renewal of its membership. These
include assuring international representation by main-
taining a significant number of non-French members,
maintaining independence through a majority of inde-
pendent members as defined in the AFEP-MEDEF
corporate governance guidelines, ensuring continuity
through the re-election of a certain proportion of the
members each year and enabling representation of
employee shareholders by a member who sits on the
Supervisory Board of a mutual fund invested in the
Company’s shares.
Article 3 defines the procedures for organizing and
Corporate governance
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