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2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 175
CORPORATE GOVERNANCE
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APPLICATION OF THE AFEP/MEDEF CORPORATE GOVERNANCE GUIDELINES
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10. Application of the AFEP/MEDEF
corporate governance guidelines
This section is part of the Chairman of the board of directors’ report.
Schneider Electric voluntarily refers to the AFEP/MEDEF corporate governance guidelines. However, as some of these guidelines may not
correspond to Schneider Electric’s specifi c situation, the Company has chosen not to implement the following recommendations:
Recommendation Schneider Electric Practice
Deadline for Audit committee review of the fi nancial
statements
The Audit committee should review the fi nancial statements at least
two days before they are reviewed by the Board.
To allow the Audit committee to comprise directors who are not
French residents, meetings of the committee pertaining to the
review of annual and semestrial accounts are held on the day
before the Board meeting and not two days prior to the meeting.
However, the Company is careful in making sure that members of
the committee are able to review the accounts well in advance of
the meeting so that they may anticipate any issue in connection
with their approval.
To this end, one week before the committee meeting, a preparatory
meeting is scheduled with the Chairman of the audit committee
during which the fi nance department presents the key topics in
view of the closing of accounts. Furthermore, the fi le prepared for
the committee meeting including the presentation of the accounts is
made available to all members of the committee by digital means.
Non-compete agreement
The non-compete agreement must include a provision authorizing
the board to waive its implementation upon departure of the
member of the Senior management. The Board decides on the
application of the agreement at the time of departure of the senior
manager, particularly when he leaves the company to assert or
after having asserted his rights on retirement.
The non competition agreement of corporate offi cers provides
that a mutual agreement is necessary to repeal the non compete
requirement only in the case of voluntary resignation and subject to
the condition that the performance conditions are met and that the
senior manager does not or will not have rights to or is not or will
not be in a position to accumulate th non-compete indemnity with
the payment of a pension.
The exception to the AFEP-MEDEF recommendation is justifi ed
by the fact that it is in the interest of he company to put forward
the rule according to which the board will call the non-compete
clause into play. It appears that this rule may help prevent poaching
attempts by competitors or to prevent a person who wants to
resign from directing his or her employment search towards
competitors of Schneider Electric.
Stock options and performance shares
The valuation of options and performance shares must not depart
from previous business practice .
Given the signifi cant fl uctuations in the market price of Schneider
Electric stock and to prevent a windfall effect, the board continues
to apply the old AFEP-MEDEF recommendations in its decisions;
in other words, it is reasoning is based on the number of shares
and not on their value. However, the board reserves the possibility
to carry out a calculation of consistency in value for a certain
length of time.