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LISI 2011 —
99
— financial report
Information regarding the Company and corporate governance
2.2
Internal rules of the Board
of Directors
At the Board of Directors meeting held on August 30, 2006, the
internal rules of the Board of Directors were adopted.
In addition to the Corporate Governance Charter referred to above, the
internal rules provide:
Board meetings
If the technical facilities of the Boardroom so permit, for purposes of
establishing a quorum and a majority, directors who attend a board
meeting by way of videoconference and/or conference call shall be
considered present in accordance with the rules.
This provision shall not apply to the following decisions: appointment
or removal of the Chairman, appointment or removal of the CEO,
appointment or removal of the Vice Presidents, approval of the
corporate and consolidated annual financial statements and the
management report.
Invitations to board meetings that are issued by either the Chairman
or the Secretary of the Board can be by letter, fax, email or verbally.
2.3
The Compensation Committee
The Compensation Committee is in charge of:
– Setting out the general rules of compensation (fixed salaries and
variable bonuses of all types) and checking the annual application
of these rules:
a) Members of management of LISI S.A. (the Chairman of the Board
of Directors, the CEO and Vice Presidents);
b) The CEOs of the divisions of LISI S.A.;
– Advising the LISI S.A. Chairman and Chief Executive Officer on
the compensation policy for the top management of each of the
Group’s subsidiaries. Within the scope of this advisory role, the
Compensation Committee submits all proposals to the Board
relating to incentive and profit-sharing schemes for the Group’s top
management, in particular with regard to the parent company’s
stocks options policies, the corresponding terms and conditions, as
well as the terms of eligibility.
It also presents its recommendations regarding the appearance fees
awarded to directors and to members of the Board’s Committees and
the pay scale applied to these fees.
The Compensation Committee is comprised of at least 3 members
and at most 5 members, the majority of whom cannot be corporate
officers. Members of this Committee are Mrs. Lise Nobre, Messrs.
Thierry Peugeot and Patrick Daher. The Committee is chaired by Mrs.
Lise Nobre.
Members who are corporate officers do not take part in the vote when
the Committee deliberates on their own compensation or on any
incentive systems from which they may benefit.
The Committee meets a minimum of twice a year. Its work leads to
the drafting of a written report that allows the Board to remain fully
informed, thus facilitating its deliberation.
The Committee met twice in 2011. It presented its recommendations
to the Board on the following points:
– The fixed compensation paid to members of LISI S.A.’s General
Management and to Chief Executive Officers of the group’s
Divisions, as well as the calculation rules that apply to the variable
portion of this compensation, known as the Objective-Related
Bonus. This portion depends chiefly on meeting annual objectives
on growth, revenue and net borrowing.
2.4
The Audit Committee
The main tasks of the Audit Committee are:
– to reviewthe financial statements and to ensure that the accounting
methods used to establish the company’s consolidated financial
and corporate statements are relevant and permanent;
– to check that the internal procedures used to gather and verify
information will guarantee this. In order to do so, the Audit
Committee analyzes andmonitors the company’s risk management
procedures. It issues an opinion on the process used to check the
financial statements, assesses the independence of the auditors
and familiarizes itself with the auditors’ comments on the financial
statements;
– to take into account the Group’s general risk analysis, follow up
the action plans set up and their progression. As such, the internal
audit reports are presented to the Audit Committee, as well as the
follow-up and corrective action reports.
The Audit Committee has full authority to issue to the Board of
Directors the recommendations designed to improve the Group’s
internal control.
The Audit Committee steers the Auditor selection procedure and
submits the outcome of this selection to the Board. Once the Auditors’
mandate comes to an end, the selection of new Auditors or the
renewal of their mandate must be preceded by a call for tender issued
by the Board and supervised by the Audit Committee. The amount
paid in fees by the company and group to the consultancy and the
Auditors involved is communicated to the Committee, which verifies
that this amount and the proportion of the consultancy’s turnover it
represents are not likely to affect their independence.
The Audit Committee is comprised of at least 3 members and at most
5 members, the majority of whom cannot be corporate officers. The
members of this Committee areMessrs. Eric André, Christophe Viellard
and Christian Peugeot. The Committee is chaired by Mr. Eric André.
It meets prior to the Board of Directors’ meetings that are held to set
out the annual or half-yearly financial statements.
The Auditors are invited to take part in this preparatory meeting.