Annual report 2006 - Dexia.com

CORPORATE GOVERNANCE
Responsibilities
The Management Board is charged by the Board of Directors,
which delegates powers for that purpose, with the management
of the company and the Dexia Group, for which it
directs and coordinates the various businesses and specialized
activities that support those businesses within the framework
of the objectives and general policy defined by the Board of
Directors.
Operation
Since the creation of Dexia SA in 1999, the Management Board
has operated according to a set of internal rules (hereinafter the
“Regulations”). Amended on several occasions, these Regulations
define its role and mode of operation. In 2006, as in previous
years, the Management Board was run on the basis of the
provisions of those Regulations. The collegial decision-making
process, the Board’s powers and certain rules governing the
status of members are also subject to specific provisions in the
protocol on the prudential structure of the Dexia Group signed
with the Belgian Banking, Finance and Insurance Commission.
In addition to rules governing the membership of the Management
Board (see above), the Regulations include the following
rules.
• Powers of the Management Board in its dealings with the
Board of Directors
The Regulations first define the powers of the Management
Board in its dealings with the Board of Directors. The Management
Board must formulate a preliminary opinion regarding
any proposals debated by the Board of Directors or the
Strategy Committee in terms of strategy or general policy of
the Group. It may make recommendations to the Board of
Directors through the Chief Executive Officer.
If the Chief Executive Officer takes part in discussions by the
Board of Directors or its specialized committees, for which the
Management Board has an acknowledged right of opinion or
initiative, the Chief Executive Officer presents to and defends
with the Board of Directors the points of view previously
debated by the Management Board.
• Decision-making
The Management Board operates in a collegial manner and its
decisions result from a consensus of its members. It assumes
joint responsibility for such decisions. If applicable, the Chairman
of the Management Board may, on his own initiative or
on request from two other members, submit the issue under
debate to a vote. Resolutions are adopted by a majority vote
of all members present or represented. In the event of a tie
vote, the Chairman shall cast the deciding vote.
• The Regulations also specify the basic principles for compensation
of the members of the Management Board (see
below).
Compensation
Management Board’s compensation
Fixed and variable compensation
The compensation of members of the Management Board
is fixed by the Board of Directors of Dexia SA on proposal
from the Compensation Committee. The compensation of
the members of the Management Board is subject to periodic
study carried out by the Compensation Committee with the
support of a specialist external consultant.
The compensation of members of the Management Board
consists of a fixed and a variable quota.
The fixed compensation is determined by considering the
nature and the importance of the responsibilities of each
member (taking account of market references for posts of
comparable dimension).
The variable compensation consists of three parts:
• A first Group part, based on a formula linked to the results
of Dexia SA, applicable in an identical manner to all persons
concerned within the Dexia Group. The formula is based on
four indicators (the underlying gross operating income, the
underlying net income, the total net income and the relative
PER (average PER of the DJ EuroStoxx Banks Index). For the
first three indicators, Dexia performance is determined by reference
to the budget target.
• A second part specific to the Management Board, based on
the achievement of joint objectives by its members. These
objectives have been fixed by the Compensation Committee
and revolve around four major lines: (1) the interaction with
the Board of Directors, (2) the financial markets, (3) the commercial
markets and (4) internally. More precise criteria have
been established within each of these major lines which
constitute the basis on which the Compensation Committee
assesses the performance of the Management Board as
a whole. These criteria have been established in relation to
everything to be expected of a Management Board, considering
the context in which the company evolves.
• A third individual part, based on the achievement of personal
objectives specific to each member of the Management
Board. The fixing and assessment of achievement of these
personal objectives is made by the Chief Executive Officer
except in his own case when the assessment is made directly
by the Compensation Committee.
Each of these three parts gives rise to the application of a percentage
from 0% to 100% (with a target rate of 50%).
MANAGEMENT REPORT
COMPTES CONSOLIDÉS
COMPTES SOCIAUX
• Rules governing meetings
The Management Board meets in principle at least once a
week when convened by the Chairman. If necessary, meetings
can be convened at any time by the Chairman or if two
or more members so desire. Any member of the Management
Board may be represented by another member of the Board,
but a member may not represent more than one other member.
Each member of the Board may propose an item for the
agenda which is set by the chairman.
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