MICHELIN - 2008 ANNUAL REPORT

Michelin’s Corporate Governance:
A Balanced Organization
The organizational principles of Compagnie Générale des
Etablissements Michelin (CGEM), a Partnership Limited by
Shares (commandite par actions), are implemented in a highly
transparent and efficient way by the Company and are fully
tuned to Shareholders’ expectations and to responsible corporate
governance needs. Such principles are designed to favor the
pursuit of long-term strategies by a stable and committed
management, monitored by an independent Supervisory Board
whose functions are clearly separated from those of executive
management.
In addition, since all of the Company’s shares are registered shares,
close and direct ties are maintained with each Shareholder.
A Seasoned, Stable and Responsible
Management Team
EXPERIENCE
Pursuant to its bylaws, Michelin is managed by one or more
Managing Partner(s), being individual(s) who may have the status
of General Partner or not.
Messrs Michel Rollier (appointed Managing General Partner
by the Annual Shareholders Meeting of May 20, 2005), Didier
Miraton (appointed Non-General Managing Partner by the Annual
Shareholders Meeting of May 11, 2007) and Jean-Dominique
Senard (appointed Non-General Managing Partner by the same
Annual Shareholders Meeting), jointly assume the Company’s
leadership.
Mr. Michel Rollier brought a long management experience within
a large international group to Michelin Group, when he joined it
in 1996. He then acted as Michelin’s Legal Department Head and
Chief Financial Officer.
Mr. Didier Miraton joined Michelin in 1982 and dedicated his
career to Research and Innovation, in both France and North
America.
Mr. Jean-Dominique Senard benefits from a long international
corporate management experience. He joined Michelin Group in
2005 in his capacity as Chief Financial Officer.
The Managing Partners report to the Shareholders. They are
assisted by the Group Executive Council that meets monthly and
whose members are presented on page 21 of this Report.
STABILITY
The stability of the Managing General Partner status promotes
the definition of long-term orientations, particularly suited to the
tire industry, where return on investment takes time and market
adoption of technological innovations is gradual and often slow.
RESPONSIBILITY
By virtue of his status as General Partner, Michelin’s Managing
General Partner is jointly and severally liable on his own
assets for the full amount of the Company’s liabilities in
the event of failure. This provision offers Shareholders a rarely
found level of assurance that the Company is run in their mid- to
long-term interests, particularly during times of volatile markets
or economic crises. It further strengthens its top executive
management’s constant watch of corporate risk control issues.
Consistent with this long-term commitment, the Managing
General Partner may not relinquish his status as General Partner
without the prior approval of an Extraordinary Shareholders
Meeting. He is therefore bound to assume the long term
consequences of the Group’s management decisions.
The Managing General Partner is entitled to a statutory share of
the Company’s profits for the previous financial year. The fact
that he enjoys no other compensation (such as salary, noncash
benefits or director’s fees, miscellaneous compensation or
retirement scheme) reflects the thorough implementation of the
principle of fully variable compensation.
The Non-General Managing Partners are appointed for a fiveyear
renewable term by the Annual Shareholders Meeting upon
proposal of the General Partners and after consultation with
the Supervisory Board. Their compensation is set each year by
unanimous decision of the General Partners, whether Managing
Partners or Non-Managing Partners, after consultation with the
Supervisory Board.
Independent Controlling Bodies
Directly Reporting to Shareholders
SUPERVISORY BOARD
Make-up
In accordance with applicable law and Company bylaws, the
Supervisory Board comprises 3 to 10 members appointed by the
Annual Shareholders Meeting for a term of 5 years (4 years for
future renewals and appointments (1) ); the General Partners are
not entitled to take part in this appointment. The Supervisory
Board members may be re-elected.
The age limit for serving as Supervisory Board member is set at
75 years by the bylaws and applies to two thirds of the members
of the Board.
The Supervisory Board currently comprises eight members:
Mr. Eric Bourdais de Charbonnière (Chairman), Mrs. Barbara
Dalibard and Mrs. Laurence Parisot, Messrs. Pat Cox, Louis Gallois,
François Grappotte, Pierre Michelin and Benoît Potier (2) .
The Supervisory Board’s and its committees’ codes of conduct,
whose main provisions are set forth below, define the Board’s
mission and organization.
Mission
The Supervisory Board monitors the management of the Company
on an ongoing basis on behalf of the Shareholders and reports
on its mission to them annually. Its mission includes: reviewing
the annual and semi-annual corporate and consolidated financial
statements approved by the Managing Partners, assessing the
fairness and adequacy of the Company’s management decisions,
(1) A resolution will be presented to the Annual Shareholders Meeting of May 15, 2009 to reduce the term of Supervisory Board members to four years.
(2) Supervisory Board member biographies are set forth on pp 22 to 23, and 194 to 196, of this Report and the information relative to their compensation is on page 155.
146 2008 Michelin Annual Report