Annual Report on Corporate Governance (February ... - FIAT Industrial

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NOMINATING, COMPENSATION AND SUSTAINABILITY COMMITTEE – assessing the position of the Compliance Officer within the organization and ensuring his effective independence, including with regard to Legislative Decree 231/2001 on corporate liability – assessing the whistleblowing procedures and, with the support of the Compliance Officer, reviewing reports received in order to monitor the adequacy of the internal control system – assessing, in collaboration with the Compliance Officer, the head of Group Control and the independent auditors: (a) the adequacy of the accounting principles adopted and (b) the consistency with those used for preparation of the consolidated financial statements – assessing proposals presented by candidates for the role of independent auditor, with the support of the Compliance Officer and the head of Group Control, and submitting an opinion to the Board of Directors – assessing the audit work plan and the results included in the audit report and letter of recommendations – examining, with the support of the Compliance Officer, proposals for the assignment of non-audit services to the independent auditors or other related parties that have ongoing relationships with them – assessing the organizational placement, structure and work plan of Internal Audit The Committee shall meet whenever convened by its Chairman, or whenever the Chairman of the Board of Statutory Auditors or the Compliance Officer so request. Participants at meetings of the Committee may include the Statutory Auditors, Compliance Officer, managers responsible for the Company’s financial reporting, the General Counsel, the chief accounting officer, the independent auditors and, as appropriate and at the invitation of the Committee Chairman, the executive directors and heads of central functions of Fiat Industrial and subsidiaries. Following adoption of the procedures for transactions with related parties pursuant to Consob Regulation 17221 of 12 March 2010 (as amended), in addition to the above duties, the Committee is also required to give an opinion on the substantial and procedural fairness of transactions with related parties of particular significance, as defined in those procedures. To meet that objective, the Committee is to receive timely and adequate information on transactions during the evaluation phase, and, for significant transactions, it has the authority to communicate its views to the individuals responsible for conducting negotiations. During the year, the Committee provides the Boards of Directors and Statutory Auditors a quarterly report on transactions with related parties. The Nominating, Compensation and Sustainability Committee has been assigned responsibility for transactions with related parties for matters related to compensation only. During 2011, the Committee held seven meetings during which it focused in particular on analysis of the quarterly results and related comments from the independent auditors; the work plans for both the independent and internal auditors; and verification of the adequacy of the Internal Control System and risk management, including a specific assessment of administrative and accounting procedures for preparation of the consolidated and parent company financial statements and other communications of financial nature. With regard to procedures for transactions with related parties, the Committee provided the favorable opinion required under the regulations and contributed to drafting the formal procedures in accordance with the Guidelines issued by the Board. During the first two months of 2012, the Committee met 2 times. On 10 March 2011, as part of the continuous review of the system of corporate governance and to better align itself with best practices as well as the recommendations of the Corporate Governance Code, the Board also assigned the Nominating and Compensation Committee responsibility for corporate governance and sustainability issues and subsequently renamed it the Nominating, Compensation and Sustainability Committee. 19
20 ANNUAL REPORT ON CORPORATE GOVERNANCE SECTION III The Nominating, Compensation and Sustainability Committee is composed of three non-executive directors – John Elkann (Chairman), Robert Liberatore and John Zhao – two of whom are independent. Its role is to support the Board of Directors in its own activities, with advice and proposals on matters relating to nominations, compensation, corporate governance and sustainability. The Committee’s Charter sets out minimum requirements for the Committee’s composition, functioning, and main advisory functions, which are as follows: – presenting proposals to the Board of Directors in relation to individual compensation plans for executive directors and other directors with specific responsibilities; – examining proposals from the Chairman concerning compensation and performance evaluations for members of the Fiat Industrial Executive Council and executives with strategic responsibilities; – examining proposals from the Chairman concerning performance evaluation criteria and general policies for fixed and variable compensation applicable at Group level, as well as share-based and other incentive plans; – examining specific issues relating to executive compensation when requested by the Board of Directors; – in relation to co-options, selecting and proposing candidates to the Board of Directors, indicating the specific individual and/ or the qualifications required; – in relation to renewal of the Board, recommending candidates for nomination to the Board of Directors, indicating the specific individual and/or the qualifications required; – formulating recommendations regarding the size and composition of the Board, and the appropriate professional and managerial profile of board members; – evaluating, on an annual basis, the activities carried out by the Board of Directors and its Committees; – examining proposals from the Chairman concerning appointment and succession for members of the Fiat Industrial Executive Council and executives with strategic responsibilities; – providing periodic updates to the Board of Directors on changes in corporate governance practice and regulation and, where appropriate, making proposals for changes to the governance model; – evaluating proposals relating to the strategic focus on sustainability and, where necessary, presenting recommendations to the Board of Directors, as well as reviewing the annual Sustainability <strong>Report</strong>. Participants at meetings of the Committee may include the head of human resources and the general counsel and, as appropriate, the Committee Chairman may invite the heads of central functions of Fiat Industrial and subsidiaries. The Chairman is to provide a report to the Board on the Committee’s activities. In the event of co-option or renewal of directors the Nominating, Compensation and Sustainability Committee is vesting with the power of selecting and proposing nominees – providing the Board with the name of the candidate and/or the qualifications required. For such reasons the Company, so far, did not establish specific succession plans for executive directors. With adoption of the procedures for transactions with related parties pursuant to Consob Regulation 17221 of 12 March 2010 (as amended), the Nominating, Compensation and Sustainability Committee was assigned responsibility, for matters relating to compensation only, for reviewing transactions with related parties.
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Annual Report on Corporate Governance (February ... - FIAT Industrial

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