APC 2012 Annual Report Download - page 123

2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 121
CORPORATE GOVERNANCE
3
ORGANIZATIONAL AND OPERATING PROCEDURES OFTHESUPERVISORYBOARD
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2. Organizational and
operating procedures
oftheSupervisoryBoard**
Missions and powers of the Supervisory Board
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 fulfi ll its duties.
Specifi c powers are vested in the Supervisory Board under French
law and the Company’s articles of association. These include the
power to:
•appoint the Management Board, designating the number of
members that compose it as well as its Chairman. Establish the
compensation of the members of the Management Board;
•remove Management Board members from offi ce, if necessary;
•authorize fi nancing transactions that may have a substantial
effect on the Company’s fi nancial structure (loans, increase in
share capital etc.);
•authorize material business acquisitions and disposals, meaning
strategic transactions amounting to more than EUR250million,
as well as strategic partnerships;
•authorize the creation of share subscription or purchase option
plans and bonus or performance share allocation plans;
•authorize regulated agreements;
•authorize the issuance of endorsements guarantees, as provided
by French law.
They are also subject to the approval of the proposals at the Annual
Shareholders’ Meeting concerning the dividend, Board membership
and changes to the articles of association.
The Supervisory Board may appoint between one and three non-
voting members and decide to create Board committees. It draws
up its internal rules and procedures. It determines the allocation
of attendance fees; the total amount is determined by the Annual
Shareholders’ Meeting.
Internal rules and procedures of the Supervisory Board
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 and Human
Resources Committee and the Audit Committee) as well as the
director’s charter recommended by the AFEP/MEDEF corporate
governance guidelines. It has been amended on several occasions.
The internal rules and procedures of the Supervisory Board have
13articles:
Article 1 defi nes the role and powers of the Supervisory Board
(see above). It specifi es the Management Board decisions that
require the prior approval or consultation of the Supervisory Board.
In particular, acquisitions amounting to more than EUR250million
must be approved in advance by the Supervisory Board.
Article2 defi nes the principles applied by the Supervisory 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 at regular
intervals and enabling representation of employee shareholders.
Article 3 defi nes the procedures for organizing and conducting
Supervisory Board meetings (notice of meeting, methods of
participation, minutes, etc.).
Article 4 defi nes the role and powers of the Chairman of the
Supervisory Board. The Chairman leads the work of the Board.
He is regularly informed by the Management Board’s Chairman of
material events and developments in the life of the Group.
Article5 concerns information received by the Supervisory Board.
It stipulates that Supervisory Board members shall receive any
information required to enable them to fulfi ll their duties and that
they may request any 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. It stipulates that the Management Board should
present the Supervisory Board with annual targets, strategic and
operational plans.
Article6 defi nes the status of members of the Supervisory Board.
This is 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 and they are asked to refrain
from voting and any debate regarding the matter in question;
•hold at least 1,000shares of Company stock;
•abide by strict rules regarding transactions involving Schneider
ElectricSA stock (no trading allowed in the 31days preceding
the day following the publication of the annual or interim fi nancial