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3. BOARD OF DIRECTORSResponsibilities and membershipThe Board of Directors of Compagnie Financière Richemont SA(‘the Board’) is responsible for the overall strategic direction of theGroup and the appointment of senior management. In addition, itis responsible for establishing financial controls and appropriateprocedures for the management of risk within the Group as well asthe overall supervision of the business. The Board is responsible forthe preparation of the financial statements of the Company and ofthe Group and for the organisation of shareholder meetings.The Board is composed principally of non-executive directors withdiverse professional and business backgrounds. Seven nationalitiesare represented on the Board, which was composed of 15 membersat 31 March 2009. Board members are elected at each year’sAnnual General Meeting for a term of one year. All directors areeligible to stand for re-election each year, details of nominationsbeing given in the notice of the Annual General Meeting publishedon page 116 of this report and in the press. The proposal to theAnnual General Meeting is that the Board be elected on an individualbasis. There is no restriction on the number of times a director mayseek re-election and no formal age limit for directors.In terms of its regular business, the Board generally meets forhalf a day to a full day, five times per annum. Further meetingson specific topics are held on an ad hoc basis. As part of itsschedule of meetings, the Board meets with executive managementfor two days each year to review the strategic direction of theGroup’s businesses. During the period from 1 April 2008 to31 March 2009, the Board held six meetings. These includeda two-day meeting with senior management of certain Maisonsat which brand strategy, marketing plans and new products werepresented. The Executive Chairman, Group Chief Executive Officerand Group Finance Director establish agendas for meetings of theBoard. Financial reports and supporting information in respectof agenda items are circulated to members of the Board in advanceof each meeting. Directors may ask that an item be placed on theagenda for any meeting.Three directors of the Management Committee – the Director ofCorporate Finance, the Director of Corporate Affairs and the LeadCounsel and Chief Intellectual Property Counsel – regularly attendBoard meetings. Other members of senior management may beinvited to attend periodically to address specific subjects. The Boardmay invite external counsel and specialists to attend meetings.Board CommitteesIn terms of the Group’s framework of corporate governance, theBoard of Compagnie Financière Richemont SA has established anAudit Committee, a Compensation Committee and a NominationsCommittee. The composition of these Committees is indicated inthe biographical notes on Board members set out below. In additionto these Committees of the Board, the Group’s senior managementare members of the Management Committee, formerly the Boardof Richemont SA, Luxembourg.Each Committee has its own written Charter outlining its dutiesand responsibilities and a Chairman elected by the Board. TheChairman of each Committee presents a summary of the proceedingsof each Committee meeting to the Board. All Committees of theBoard are entitled to invite members of senior management andexternal specialists to attend meetings for specific matters on anad hoc basis.Audit CommitteeThe four members of the Audit Committee are non-executivedirectors. The Group Finance Director attends all meetings,as do the Head of Internal Audit and representatives ofPricewaterhouseCoopers SA, the Group’s external auditors.Meetings of the Audit Committee are held at least three times perannum and have a typical duration of half a day. During the yearended 31 March 2009, meetings took place on four occasions.During the course of each of these meetings, the Audit Committeemet with the external auditors in camera.The Audit Committee’s principal tasks are to:• satisfy itself that the consolidated financial statements followapproved accounting principles and give a true and fair viewof the Group’s financial position and results;• recommend to the Board the appointment, reappointment ordismissal of the external auditors and keep under review theirindependence and objectivity as well as their level of compensation;• examine and review, with both external and internal auditors,the adequacy and effectiveness of the Group’s managementinformation systems as well as accounting, financial andoperational controls;• oversee the effectiveness of the Group’s Internal Audit functionand to liaise with the Head of Internal Audit on all matters ofsignificance arising from the department’s work;• oversee the adequacy and effectiveness of risk managementpractices in the Group and advise the Board on its responsibilityto perform regular risk assessments;• examine and review the adequacy, effectiveness and integrityof the processes to assure the Group’s compliance with allapplicable laws and regulations; and• ensure compliance with the Group’s internal CorporateGovernance Regulations, including the Code of Conduct forDealings in Securities, and its commitment approval procedures.The Chairman of the Audit Committee reports the findings ofeach Committee meeting to the Board and makes recommendationsto management on behalf of the Board.The Company has a centralised risk management process whichgives consideration to both strategic and operational risks. Allidentified risks are quantified according to their probability ofoccurrence and potential impact and subsequently prioritised byGroup Management. A consolidated risk report, which includesaction plans prepared by the Group executive directly responsiblefor addressing the risk, is reviewed annually by the Board ofDirectors and the Audit Committee.Section 3 of the corporate governance report continues on page 47Richemont Annual Report and Accounts 2009 43Corporate governance