APC 2009 Annual Report Download - page 83

2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 81
CORPORATE GOVERNANCE
3
ORGANISATIONAL ANDOPERATINGPROCEDURES OFTHESUPERVISORY BOARD
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2. Organisation al
andoperatingprocedures
oftheSupervisory Board **
Missions and powers
The Supervisory Board exercises ongoing control over the
Management Board’s management of the Company, in accordance
with French law. To this end, it performs all the checks and controls
that it considers appropriate and obtains copies of any and all
documents that it considers necessary in order to to fulfi ll its duties.
Specifi c 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 number of
members and their compensation and designate the Chairman;
•if necessary, remove Management Board members from offi ce;
•authorise debt and equity financing and other financing
transactions that will have a substantial effect on the Company’s
balance sheet structure;
•authorise material business acquisitions and disposals, meaning
strategic transactions amounting to more than EUR 250million, as
well as strategic partnerships;
•authorise the creation of stock option plans or stock grant plans,
with or without performance criteria;
•authorise the signature of regulated related party agreements;
•authorise the issuance of bonds and other guarantees, subject to
compliance with French law.
The Supervisory Board also authorises recommendations made to
shareholders in General Meeting concerning the dividend, Board
membership and changes in the bylaws.
The Supervisory Board may appoint one or two non-voting members
to assist it and 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.
Internal rules and procedures
The Supervisory Board’s internal rules and procedures, adopted on
May3, 2006, 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. The document, which has been amended
on several occasions, and notably in 2009 to align the missions of
the Audit Committee with the requirements of articleL.823-19 of the
French Commercial Code, comprises 13 articles:
Article1 defi nes the Board’s role and powers (see above). It also
specifi es the Management Board decisions that require the prior
approval or consultation of the Supervisory Board. In particular,
acquisitions amounting to more than EUR 250million require the
prior approval of the Supervisory Board.
Article2 defi nes the principles applied by the Board concerning
the renewal of its membership. These include assuring international
representation by maintaining a signifi cant number of non-French
members, maintaining independence through a majority of
independent members as defi ned 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.
Article3 defi nes the procedures for organising and conducting
Board meetings (notice of meeting, methods of participation,
minutes, etc.).
Article4 defi nes the role and powers of the Supervisory Board’s
Chairman. The Chairman leads the work of the Board and is regularly
informed by the Management Board’s Chairman of material events
and developments 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 fulfi ll their duties and that
they may request any and all necessary or relevant documents prior
to any meeting of the Board. The article 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 defi nes the status of Supervisory Board members. In
compliance with the director’s charter contained 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 participated in more
than half the Board meetings;
•comply with an overall obligation of confi dentiality;
•report any and all confl icts 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 interim results are announced);
•attend Shareholders’Meetings.
Article7 states that non-voting members, who attend Supervisory
Board meetings in a consultative capacity, are subject to the same
ethical rules as voting members.
Articles8 to 10 apply to 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 allocate
management tasks among its members, with the Supervisory
Board’s authorisation .