Annual report 2010 - Dexia.com

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Declaration of corporate governanceManagement reportConsolidatedfinancial statementsAdditional information Annual financial statements• evolution of the balance sheet and the funding ratio on thebasis of the 2014 business plan;• amendments to the IAS39 standards and the new IFRS9rules;• balance sheet deleveraging;• exit from the government guarantee mechanism andregular reporting to the European Commission;• Legacy Portfolio Management Division,• exposure to sovereigns and impact of the Greek crisis;• impairments on the Financial Products portfolio;• monitoring the litigation between Dexia banka Slovenskoand Ritro;• monitoring the Lernout & Hauspie litigation;• distribution of bonus shares to shareholders;• liquidity situation;• analysis of the impact of IFRS and Basel III on the DexiaGroup;• sale of Dexia Banka Slovenko.Presence of each individual director at meetingsof the Accounts CommitteeThe individual attendance rate of directors at meetings of thiscommittee was 100% in 2010.For Hubert Reynier, who left the committee on 8 July 2010,the attendance rate was 25%. For Antoine Gosset-Grainville,who joined the committee on 8 July 2010, the attendancerate was 67%.• The Internal Control, Risks and ComplianceCommitteeCompositionThe committee consists of three to five directors, all nonexecutive,including at least one independent director. TheChairman of the Board of Directors may attend the InternalControl, Risks and Compliance Committee. The ChiefExecutive Officer may attend but may not be a member ofthe Internal Control, Risks and Compliance Committee.The members of the Internal Control, Risks and ComplianceCommittee are (as at 31 December 2010):• Gilles Benoist, independent director and Chairman of theCommittee;• Marc Tinant, director;• Koen Van Loo, director;• Olivier Bourges, director.Responsibilities (as at 31 December 2010)Regarding internal audit and risk managementThe Committee has the task of supervising the performance ofthe internal control system put in place by the ManagementBoard and the risk management system regarding the risks towhich the entire Group is exposed by virtue of its activities.The committee also examines the reports presented by thehead of the Compliance, Legal & Tax support line on theGroup’s legal and tax risks.Regarding internal auditThe Committee ensures the performance and the independenceof the operations of the Internal Audit department, both forDexia SA and the Group as a whole.Regarding complianceThe committee ensures the performance and the operationalindependence of the Compliance department.Operation of the Internal Control, Risks andCompliance CommitteeThe Committee meets at least four times a year, each ofthese meetings taking place prior to the Board of Directors’meetings examining and approving the quarterly, half-yearlyor annual financial statements as the case may be. It maymeet at any time at the request of one of its members, or theChairman of the Board of Directors.The competences and operating mode of the Internal Control,Risks and Compliance Committee are described in the internalrules of that Committee.The member of the Management Board responsible for riskmanagement, the General Auditor and the head of the Legal,Compliance and Tax support line attend the meetings of theInternal Control, Risks and Compliance Committee. The ChiefCompliance Officer is present to deal with all items in relationto compliance.Operation of the Internal Control, Risks andCompliance Committee during the 2010 financialyearThe committee met seven times in 2010 and dealt in particularwith the following subjects:• reporting on MiFID monitoring as at 31 December 2009;• audit plan 2009 and 2010 and examination of themonitoring of audit recommendations;• report on the assessment of internal audit by the effectivemanagement intended for the CBFA;• progress made on the IT security study;• assessment of the risks on FSA – Assured;• risk appetite policy;• activity report 2009 from the Legal and Tax support lineand action plan 2010;• activity report 2009 from the Compliance support line andaction plan 2010;• progress made on introducing a permanent audit process;• monitoring implementation of the transformation plan andexchanges of correspondence with the regulators;• structured credits to the French public sector;• the internal audit and investigation charter.Presence of each individual director at meetingsof the Internal Control, Risks and ComplianceCommitteeThe individual attendance rate of directors at meetings of thecommittee was 100% in 2010, except for Olivier Bourgeswhose attendance rate was 71%.40 Dexia Annual report 2010
Declaration of corporate governanceThe Appointment and Compensation CommitteeCompositionThe Appointment and Compensation Committee is composedof three to seven non-executive directors, including theChairman of the Board of Directors, and has a majority ofindependent directors. The committee has the necessaryexpertise in Compensation policy. The Chief Executive Officermay attend but he may not be a member of the Appointmentand Compensation Committee (as he is not a non-executivedirector).The members of the Appointment and CompensationCommittee are (as at 31 December 2010):• Jean-Luc Dehaene, Chairman of the Board of Directors,independent director and chairman of the committee;• Christian Giacomotto, independent director;• Francine Swiggers, director;• Antoine Gosset-Grainville, director (1) ;• Francis Vermeiren, director;• Catherine Kopp, independent director (2) ;• Robert de Metz, independent director (3) .Responsibilities (as at 31 December 2010):Regarding CompensationThe Committee proposes:• the Compensation for the Chairman of the Board and theChief Executive Officer and, based on the Chief ExecutiveOfficer’s recommendation, the Compensation for the membersof the Management Board;• the granting of stock options in application of the generalprinciples defined by the Board of Directors.It is consulted moreover on the policy of compensation andincentives for top executives of the Group, as well as thepolicy regarding employee share plans.It also makes recommendations on the fees paid to directorsand the allocation of those fees to directors.Within the context of these tasks, the committee complieswith recommendations, circulars and all other international,French and Belgian regulations on compensation andcorporate governance.(1) Antoine Gosset-Grainville was appointed a member of the Appointmentand Compensation Committee on 31 January 2011 replacing Augustin deRomanet de Beaune.(2) Catherine Kopp was appointed a member of the Appointment andCompensation Committee on 24 February 2010.(3) Robert de Metz was appointed a member of the Appointment andCompensation Committee on 31 January 2011.Regarding appointmentThe Appointment Committee prepares decisions for the Boardof Directors relating to:• proposals for the appointment and renewal of the mandateof directors made by the Board to the Shareholders’ Meeting,as well as proposals for co-opting directors;• determination of independence criteria enabling a directorto be qualified as "independent";• qualification of an existing member or a new member ofthe Board of Directors as an independent director;• appointment of members of the specialist committees ofthe Board of Directors and their chairmen;• appointment and renewal of the mandate of the ChiefExecutive Officer;• appointment and renewal of the mandate of the Chairmanof the Board;• proposals from the Chief Executive Officer concerningthe composition, organisation and operating mode of theManagement Board of Dexia SA;• amendments to the internal rules of the Board ofDirectors.For these purposes, the Committee is responsible formonitoring procedures adopted by major listed companies interms of composition and operation of Boards of Directors.Operation and activities during the 2010 financialyearThe Appointment and Compensation Committee met fivetimes in 2010 and dealt in particular with the followingsubjects:• composition of the Board of Directors;• composition of the specialist committees;• leaving packages for certain former executives;• policy regarding compensation of directors of Dexia SA andits main subsidiaries;• policy regarding compensation of trading roomprofessionals;• policy regarding compensation of management;• variable Compensation of members of the ManagementBoard and the Executive Committee;• report on “Integration of Compensation policy ingovernance” intended for the CBFA;• appointment of a new director of Human Resources;• composition of the Appointment and CompensationCommittee;• adaptation of the internal rules of the Board of Directors.Presence of each individual director at meetings ofthe Appointment and Compensation CommitteeThe individual attendance rate of directors at meetings ofthese committees was 100% in 2010, except for Augustin deRomanet de Beaune whose attendance rate was 60%.Management reportConsolidatedfinancial statementsAdditional information Annual financial statementsAnnual report 2010 Dexia41
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Additional informationManagement re
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Photographs: page 8: C. LEBEDINSKY/
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Annual report 2010 - Dexia.com

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