2014 Registration Document and Annual Financial Report - page 114

Corporate GOVERNANCE
Report of the Chairman of the Board of Directors
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it reviews the scope of consolidation and the reasons for excluding
any entities;
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it reviews the Risk Management policy and ensures that adequate
systems are in place;
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it assesses the material risk exposure and off-balance sheet
commitments, and receives a copy of the Chief Financial Officer’s
detailed report on these matters;
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it obtains assurance concerning the effectiveness of the Group’s
system of internal control, by reviewing the methods used to identify
risks and the organizational principles and procedures of the Internal
Audit Department. It is also informed of the Internal Audit program
and of the results of the Internal Audits carried out;
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it reviews the Statutory Auditors’ audit plan and the results of their
audits. It receives a copy of the Statutory Auditors’ post-audit letter
setting out the main issues identified during their audit and describing
the main accounting options selected;
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when the Statutory Auditors’ term is due to expire, it oversees the
Auditor selection procedure and reviews the proposals submitted by
the various candidates, expresses an opinion on the proposed fee
budgets for statutory audit work and makes recommendations to
the Board of Directors on the choice of candidate;
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it validates the categories of additional audit-related work that the
Statutory Auditors and the members of their networks may be asked
to perform in accordance with the applicable laws and regulations;
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at the end of each year, it is informed of the fees paid by Group
companies to the Statutory Auditors and the members of their
networks during the year, including a detailed breakdown by type
of engagement, and reports to the Board of Directors on these
fees, as well as on its assessment of the Statutory Auditors’ level
of independence.
The Audit and Risks Committee comprises three to five members
possessing the necessary technical knowledge to fulfill the Committee’s
duties. Amajority of these members, including the Committee Chairman,
must be independent directors.
The Audit and Risks Committee holds at least three meetings per year.
One meeting – attended by the Senior Vice-President, Internal Audit – is
devoted to reviewing the effectiveness of the system of internal control.
The Audit and Risks Committee may make enquiries of the Statutory
Auditors without the executive directors and/or the Chief Financial
Officer being present, after first notifying the Chairman and Chief
Executive Officer.
Calls to meeting shall be issued by the Committee Chairman and include
the meeting agenda. Meetings to review the interim and annual financial
statements shall be held at least three days prior to the Board meeting
called to approve the financial statements. The members of the Audit
and Risks Committee must receive all necessary documents on a timely
basis. When members are first appointed to the Committee, they are
given detailed information about accounting, financial and operational
issues that are specific to the Group.The Chairman and Chief Executive
Officer, the Chief Financial Officer and the Statutory Auditors shall attend
Audit and Risks Committee meetings as needed.
6.2. The Commitments Committee
The Commitments Committee is comprised of no more than five
members. Meetings of the Committee may be called at any time, in
writing or verbally, by the Committee Chairman or the Chairman and
Chief Executive Officer.
The Commitments Committee’s recommendations are adopted by a simple
majority and must then be discussed by the Board of Directors before
the commitments can be implemented by the Group.The Commitments
Committee is therefore responsible for preparing Board meetings and
making recommendations to the Board on the following matters:
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any mergers, demergers or asset transfers;
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any amendments to the Company’s corporate purpose;
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any and all commitments or transactions for which the Chairman and
Chief Executive Officer is required to obtain the Board of Directors’
prior approval in accordance with Article 4. c) of these Bylaws.
6.3. The Compensation, Appointments
and Corporate Governance Committee
The Compensation, Appointments and Corporate Governance Committee’s
role is to prepare the Board of Directors’ decisions pertaining to the
compensation of executive directors and the policy for granting options
to purchase new or existing shares of Company stock and making
stock grants, to prepare changes in the composition of the Company’s
management bodies, and to ensure that the principles of good corporate
governance are properly applied.
To this end, it carries out the following tasks:
Appointments:
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it prepares recommendations, in liaison with the Chairman and Chief
Executive Officer, regarding the succession of the executive directors
and the selection of new directors. In selecting possible directors,
the Committee shall take into consideration the desirable balance in
the Board’s composition, take special care that each candidate has
the required capabilities and availability and ensure that the directors
have the array of experience and skills necessary to enable the
Board of Directors to carry out its duties effectively with the required
objectivity and independence vis-à-vis both senior management and
a given shareholder or group of shareholders;
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it shall be informed of the succession plan concerning members of
the Group’s Executive Committee.
Compensation:
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it studies and prepares recommendations regarding both the salary and
bonus portions of the executive directors’ short-term compensation,
the granting of medium- and long-term incentives such as performance
shares and stock options, all the provisions regarding their retirement
plans and all other in-kind benefits;
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it defines and implements the rules for setting the bonus portion
of the executive directors’ compensation while ensuring that said
rules are consistent with the annual appraisal of executive directors’
performance and with the Group’s medium-term strategy;
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it gives the Board an opinion regarding the general policy for granting
stock options and performance shares, and the plans proposed by
the Chairman and Chief Executive Officer;
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it is kept informed of and gives an opinion on the compensation
policy for members of the Group Executive Committee and reviews
the consistency of such policy;
Registration Document 2014
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