Focusing on the future - Rhodia

Corporate governance:
in line with best practices
RHODIA’S CORPORATE GOVERNANCE
Rhodia is committed to observing the strictest rules and principles of corporate governance
and promoting transparency and rigor.
Rhodia’s Board of Directors implements a
governance policy that incorporates the
recommendations of the AFEP-MEDEF
consolidated report of October 2003,
as well as the current American rules
or recommendations. Rhodia places
great importance on the observance
of these rules pertaining to the independence
of members of the board of
directors and its committees.
In order to satisfy the requirements
of the Financial Security Act and the
Sarbanes-Oxley Act, which are aimed
at demonstrating the effectiveness
of internal control, a specific analysis
was carried out to identify procedures
impacting financial information, list
the specific risks associated with these
procedures and define checks allowing
their control. The effectiveness
of the Group’s internal controls was
recorded over the 2006 financial year,
thus marking the success of Rhodia’s
Sarbanes-Oxley project.
The Board of Directors and
its Committees
The Board of Directors determines the
company’s main strategic, economic,
financial and technological policy guidelines.
Seven of the eleven board members
are classed as independent, according to
criteria published in the Bouton report*.
Three consultative committees, composed
solely of independent board members,
assist the Board of Directors.
AUDIT COMMITTEE
❚ 3 independent members
❚ 8 meetings in 2006
❚ 100 percent attendance rate
The audit committee examines all matters
of a financial or accounting nature
and ensures that all means are in place
to prevent and control risks to which
the Group may be exposed through
its activities.
COMPENSATION AND SELECTION
COMMITTEE
❚ 3 independent members
❚ 5 meetings in 2006
❚ 93 percent attendance rate
This committee’s main responsibility is
to formulate recommendations on executive
compensation, share subscription
or stock option programs and free share
allocations. Its work also concerns any
capital increases reserved for employees,
replacement plans for members of
the Executive Committee and initiatives
for significant organizational changes
to Group management.
STRATEGY COMMITTEE
❚ 3 independent members
❚ 2 meetings in 2006
❚ 100 percent attendance rate
The main role of the strategy committee
is to make the necessary preparations
for the Board’s decisions relating to the
Group’s strategy, examining portfolio,
investment and alliance operations in
accordance with the strategy adopted,
and presenting its conclusions and
recommendations to the Board of
Directors.
* The Bouton report, published in September
2002, made various recommendations to improve
corporate governance in France.
THE BOARD OF DIRECTORS
❚ 11 members,
7 of whom are independent
❚ 10 meetings in 2006
❚ 87 percent attendance rate
Yves-René Nanot Chairman of the Board
of Directors of Rhodia / Chairman & Chief
Executive Officer of Ciments Français Jean-
Pierre Clamadieu Chief Executive Officer of
Rhodia Aldo Cardoso Member of the Board
of Gaz de France, Orange, Imerys and Accor /
Censor of Bureau Veritas and Axa Investment
Managers / Chief Executive Officer of Andersen
Worldwide (2002-2003) / Chairman of the Audit
Committee; Member of the Compensation and
Selection Committee Pascal Colombani
Member of the Board of Alstom SA and British
Energy Group plc. / Associate Director of A. T.
Kearney / Member of the Strategy Committee
Jérôme Contamine Senior Executive Vice
President of Veolia Environnement and Member
or Supervisory Board Member of various subsidiaries
of Veolia / Member of the A & B Supervisory
Boards of Dalkia and of the Supervisory Board of
Dalkia France / Member of the Audit Committee
Michel de Fabiani Member of the Board of BP
France and Member of the Supervisory Board of
Vallourec / Chairman and Chief Executive Officer
of BP France (1995 to 2004); European Vice-
President of BP Group (1999 to 2004) / Chairman
of the Compensation and Selection Committee
and Member of the Audit Committee Jacques
Khéliff Board Member representing the employee
shareholders / Sustainable Development Group
Vice President of Rhodia Olivier Legrain
Chairman and Chief Executive Officer of Materis
/ Member of the Compensation and Selection
Committee Pierre Lévi Chairman and Chief
Executive Officer of Faurecia (2000 to 2006) /
Member of the Strategy Committee Francis Mer
Chairman of the Supervisory Board of SAFRAN /
Minister of the Economy, Finance and Industry
(May 2002 to March 2004) / Chairman of the
Strategy Committee Hubertus Sulkowski
Partner, Shearman & Sterling LLP.