Connect - Schneider Electric

3 SUPERVISORY
CORPORATE GOVERNANCE
BOARD
This report includes the Chairman’s report on the application of the principle of equal representation of women and
men on the Board, and the conditions applicable for the preparation and organisation of the work carried out by the
Supervisory Board, and the internal control and risk management procedures implemented by the Company.
The sections below - Management Board/Supervisory Board system, 1, 2, 3, 4, 8 (Remuneration Policy for corporate
offi cers and members of the Management Board and Pension Plans), 10 and 11, and Section 2 (Shareholder’s
Meeting and Voting Rights) and 7 of Chapter 7 - constitute the Chairman of the Supervisory Board’s report provided
for in article L.225-68 of the French Commercial Code. They are indicated with**.
A Management Board/Supervisory Board system**
The company applies the AFEP/MEDEF corporate governance guidelines. There are a few exceptions, which are
described below (see Section 11).
The guidelines are available online at www.medef.fr.
At the Annual Shareholders’ Meeting of May 3, 2006, shareholders approved a recommendation to adopt a two-tier
management structure, with a Management Board and a Supervisory Board.
> 1. Supervisory Board**
The Supervisory Board must have at least three and up to
18 members, all of whom must be natural persons.
Throughout their term, Supervisory Board members must hold at
least 250 Schneider Electric SA shares.
Supervisory Board members are elected for a four-year term and
are eligible for re-election. However, the Annual Shareholders’
Meeting of April 21, 2011 removed the age limit of 74 years for
membership and it was decided that members who are 70 years
old may be re-elected or appointed for a period of two years. No
more than one third of the members of the Supervisory Board may
be over 70 years old.
The Supervisory Board has 14 members and one
non- voting member.
There are 12 independent members according to the defi nition
contained in the AFEP/MEDEF corporate governance guidelines
for listed companies: Mr Léo Apotheker, Mrs Betsy Atkins,
Mr Gérard de La Martinière, Mr Xavier Fontanet, Mr Noël Forgeard,
Mr Jérôme Gallot, Mr Jeong Kim, Mr Willy R. Kissling, Mrs Cathy
Kopp, Mrs Dominique Sénéquier, Mr G. Richard Thoman
and Mr Serge Weinberg. Each year, the Supervisory Board includes
an item on the agenda to review the status of its members, based
on a report from the Remunerations, Appointments and Human
Resources Committee. Members’ directorships and functions in
other companies that have business relations with Schneider Electric
do not, by their nature, affect the said members’ independence in
light of the types of transactions involved. These transactions are
carried out on arms-length terms and are not material for either
party. Moreover, as regards Mr de La Martinière, who has been a
Director or member of the Schneider Electric SA Board for more
than 12 years, his seniority is not considered as a hindrance to his
independence due notably to his personality and involvement in the
work and discussions on the operation of the Audit Committees.
108 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
Five members do not have French nationality: (American Mrs Atkins,
Messrs Kim and Richard Thoman; German: Mr Apotheker, and
Swiss: Mr Kissling).
One member, Mr Claude Briquet, represents the employee
shareholders in accordance with article L.225-71 of the French
Commercial Code. He was nominated by the Shareholders’
Meeting, on the recommendation of the Supervisory Boards of the
FCPEs.
The average age of the Supervisory Board members is 61.
The appointments of seven members of the Board are due to
expire. These are the appointments of Messrs Léo Apotheker,
Xavier Fontanet, Jérôme Gallot, Willy Kissling, Henri Lachmann
and G. Richard Thoman as well as the appointment of Mr Claude
Briquet who was elected by the Annual Shareholders’ Meeting in
accordance with article 11- c of the articles of association from a list
of candidates nominated by the employee shareholders.
In view of the major changes made in composition of the Board
in 2011 with the addition of Mrs Betsy Atkins, Mr Jeong Kim,
Mrs Dominique Sénéquier and Mr Xavier Fontanet who was coopted
to replace Mr Anand Mahindra, the Shareholders’ Meeting is
asked to renew the appointments of:
• Messrs Kissling, Lachmann, and Richard Thoman for a two year
period, in view of the new provisions in the articles of association;
• Messrs Apotheker, Gallot and Fontanet for a four year period.
The Annual Shareholders’ Meeting will also have to ratify the coopting
of Mr Fontanet.
With regard to the Board member representing employee
shareholders, the Supervisory Board recommends that
shareholders vote for Mrs Magali Herbault whose profi le and
professional career fi t the objectives of female quotas, rejuvenation
and internationalisation, as set by the Supervisory Board regarding
its composition.