APC 2006 Annual Report Download - page 9

In May 2006, Schneider Electric moved to
a new governance system with a Management
Board and a Supervisory Board of which you
are Chairman. Are you satisfied with this
organization?
We started organizing my succession with the Board
of Directors quite some time ago, and we wanted to
separate the oversight functions from responsibility
for operation and execution. This separation is a
guarantee of transparency and discipline.
The corporate governance system rolled out in
the spring of 2006 after three years of preparation is
working remarkably well and fully deserves our
shareholders’ confidence and support.
The Supervisory Board comprises nine independent
members, of whom five are from industry and services
and four from finance and insurance. In all, five
different nationalities are represented. The members
bring a remarkable set of competencies to the Board.
They are all very involved in its operations and work
very effectively as a team.
The Management Board and its broadly international
Executive Committee are young, yet seasoned,
with high ambitions for the Company and very
complementary strengths. They have generated new
energy, a new dynamic and efficiency that is very
promising for the years ahead.
Three questions for
Henri Lachmann
Chairman of the Supervisory Board
What role does the Supervisory Board play
in major acquisitions such as APC?
Over the past two years, Schneider Electric
has acquired some twenty companies for a total
2.3 billion. The Supervisory Board, and the Board
of Directors before it, has been extremely active
and vigilant during all these transactions.
First of all, the Supervisory Board must approve
all acquisitions, partnerships or joint ventures worth
more than 250 million. What’s more, we have very
strict methodologies and rules for selecting and
analyzing potential targets, as well as for return on
investment and value creation. The Supervisory
Board pays close attention to ensure that each
acquisition is integrated smoothly and carefully
tracks the business plan approved at the time of
acquisition.
We were twice as attentive for a structuring
acquisition as large and important as APC, as the
Management Board can attest. During three specific
meetings, we conducted an in-depth review of all
the aspects of this transaction and unanimously
agreed on its advantages, price and terms.
As part of Schneider Electric, APC will benefit
from synergistic know-how, broader market access,
our customer presence and economies of scale.
This should rapidly translate into improved margins.
UPS systems are an integral part of electrical
distribution and the addition of APC will energize
this business.
So you think Schneider Electric is an
attractive investment?
I certainly do. Schneider Electric has offered its
shareholders a total return of 24% a year on average
over the past three years, based on the December
31, 2006 share price.
In 2006, the Schneider Electric share rose by 12%.
We are confident in our ability to keep delivering
a very attractive return on our shareholders’
investment.
The Supervisory Board is
extremely active and vigilant. Its
members bring a remarkable set of
competencies to the Board and are
all very involved in its operations.
Henri Lachmann
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