APC 2012 Annual Report Download - page 277

2752012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
8
MANAGEMENT BOARD REPORT TO THE COMBINED ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETING
This dual responsibility of Chairman and Chief Executive Offi cer
will be entrusted to Jean-Pascal Tricoire, given his achievements
and performance as head of the Group since 2006. Since 2006,
the revenue of Schneider Electric is up from EUR11.7 billion
to EUR24billion; and the Group share of net income is up from
EUR994million to EUR1,840million.
Jean-Pascal Tricoire, who joined the Group 26 years ago, was
made part of Senior Management by Henri Lachmann at the end of
2003 before being appointed Chairman of the Management Board
in 2006. Over these 9 years, the revenue of Schneider Electric
has increased by a factor of 2.7, net income by 4.2, and market
capitalization by 2.5.
However, to prevent any confl ict of interest in the person of the
Chairman and Chief Executive Offi cer, there are strong controls
put in place to ensure that the Board is correctly informed and
functions properly, so that the Chairman and CEO is able to ensure
his responsibility for monitoring management.
Strong controls
a) A large majority of independent directors
The Shareholders’ Meeting proposes to appoint all of the current
Supervisory Board members as directors for the remainder of their
term, as well as Jean-Pascal Tricoire.
If the Shareholders’ Meeting approves these appointments, nearly
80% of the Board of Directors will be independent directors, with
only one Senior Director, Jean-Pascal Tricoire.
Emmanuel Babeau will be appointed Executive Vice President in
charge of fi nance.
b) The Vice-Chairman Lead Independant Director
Article 12 of the articles of incorporation obliges the Board of
Directors to appoint a Vice-Chairman and Senior Director when it
decides to combine the functions of Chairman and Chief Executive
Offi cer. The role and missions of the Vice-Chairman will be defi ned
in the internal rules of the Board of Directors. This regulation, the
draft of which is attached below, gives the Vice-Chairman Lead
Independant Director means and powers to ensure that the Board is
correctly informed and functions properly. Thus the Vice-Chairman:
•is informed of major events in the life of the Group within the
framework of regular contact and monthly meetings with the
Chairman, as well as through contact that he can have with
managers of Schneider Electric and possible visits to the Group’s
entities he can undertake. In addition, he can attend all meetings
of committees of which he is not a member;
•can answer shareholders’ questions or meet on governance
issues when it is considered that he is the most appropriate
spokesperson;
•report to the Chairman on the results of the “executive sessions”
and provide, in particular, regular feedback from the Board on its
activities;
•sets the agenda of the Board of Directors with the Chairman;
•chairs the governance committee which, starting from the
evaluation of the functioning of the Board and that of the CEO,
proposes each year to the Board to continue the unifi ed functions
of Chairman and Chief Executive Offi cer or to separate them
and, as needed, make proposals for a successor in one or both
functions;
•chairs the “executive sessions”, i.e., meetings of the Board of
Directors not in the presence of any executive member, namely
the CEO and Executive Vice President;
•leads the annual and semi-annual evaluations of the Board of
Directors;
•informs the CEO of any confl icts of interest which could be
identifi ed;
•reports on his activities during the Shareholders’ Meeting.
The Vice-Chairman and Senior Director will be an independent
director. However, the fi rst Vice-Chairman will be Henri Lachmann
until the end of his term as director in 2014. Mr.Lachmann’s mission
will be to ensure a smooth transition in the change of governance
and to appoint an independent Vice-Chairman Lead Independant
Director to succeed him.
c) The “executive sessions”
To ensure the proper functioning of the Board, an executive session
shall be included on the agenda of each meeting of the Board
of Directors. It will be the duty of the Vice-Chairman, on his own
initiative or at the request of any director, to decide whether the
session will be held before or after the meeting of the Board of
Directors. In addition, the Vice Chairman can convene “executive
sessions” between two meetings of the Board of Directors. The
Vice-Chairman shall preside at meetings and report their fi ndings
to the CEO.
d) Creation of 4 committees
To strengthen its role and involvement in the supervision of the
Group, the Board will establish four committees: audit and risks,
governance, remunerations, human resources & CSR, strategy.
(i) The audit and risks committee, chaired by Mr.Gérard de La
Martinière (independent director) will be the renewal of the
audit committee of the Supervisory Board. It will have the
same missions, the only difference being that it will examine the
accounts in view of their adoption by the Board of Directors,
while now it examines them after their adoption by the
Management Board.
(ii) The governance committee will be chaired by the Vice-
Chairman and Senior Director. Its fi rst tasks will be to ensure the
proper functioning of the Board during annual and semi-annual
evaluations and to work on the composition of the Board,
including six appointments that will be renewed in 2014.
(iii) The remunerations, human resources & CSR committee will be
chaired by Serge Weinberg (independent director). In addition to
its traditional role in remunerations and performance evaluation
of managers, the committee will prepare deliberations of the
Board of Directors in the area of important human resources
policies and monitor the management of risks related to
human resources, as well as various aspects of the “Social
Responsibility” policy of the Group.