ANNUAL FINANCIAL REPORT 2010 2010 - TiGenix

5. Corporate governanceThis prospectus has been drafted from the point of view that theContribution has already been completed although this was notyet the case at the time of approval of this prospectus. However,it is anticipated that the Contribution will have been completedby the time this prospectus is made available to the public.The completion of the Contribution will be confirmed in anannouncement that will be made public before or at the sametime as the publication of the prospectus.5.1 General provisionsThis chapter 5 summarises the rules and principles by whichthe corporate governance of the Company has been organisedpursuant to Belgian Company law, the Articles of Associationand the Company’s corporate governance charter. It is basedon the Articles of Association that have been amended by themeeting of the Board of Directors of November 9, 2010 and onthe Company’s corporate governance charter that has last beenamended by the meeting of the Board of Directors on or aboutthe Contribution Date.The Company’s corporate governance charter has beenadopted in accordance with the recommendations set out inthe Belgian Code on Corporate Governance (the “Code”) thathas been issued on March 12, 2009 by the Belgian CorporateGovernance Committee. Corporate governance has beendefined in the Code as a set of rules and behaviours accordingto which companies are managed and controlled. The Codeis based on a “comply or explain” system: Belgian listedcompanies should follow the Code, but can deviate from itsprovisions and guidelines (though not the principles) providedthey disclose the justifications for such deviation.The Board of Directors complies with the Belgian Code forCorporate Governance, but believes that certain deviationsfrom its provisions are justified in view of the Company’sparticular situation. These deviations include the following:• Provision 5.2./3 (Appendix C) of the Code: the chairman ofthe board should not chair the Audit Committee. However,the board can decide to appoint one of the independentdirectors in both functions, if and when the board decidesthis would be in the best interest of the Company, andthe needs and qualifications required for the optimalfunctioning of that committee are the main reason to makethis decision.• Provision 6.1. of the Code: as there are only two executivedirectors (the Chief Executive Officer, or “CEO” and theChief Business Officer, or “CBO”)) and there is no executivecommittee (directiecomité / comité de direction), theCompany has not drafted specific terms of reference of theexecutive management, except for the terms of reference ofthe CEO and CBO.• Provision 7.7. of the Code: only the independent directorsshall receive a fixed remuneration in consideration of theirmembership of the Board of Directors and their attendanceat the meetings of committees of which they are members.They will not receive any performance related remunerationin their capacity as director. However, upon advice of thenomination and remuneration committee, the Board ofDirectors may propose to the shareholders’ meeting todeviate from the latter principle in case in the board’sreasonable opinion the granting of performance relatedremuneration would be necessary to attract independentdirectors with the most relevant experience and expertise.• For as long as the relevant Modifications to the Articleshave not yet entered into force: Provision 8.8. of the Code:only Shareholders who individually or collectively representat least 20% of the total issued share capital may submitproposals to the board for the agenda of any shareholders’meeting. This percentage is in line with Article 532 ofthe Companies Code (relating to the convening of ashareholders’ meeting) but deviates from the 5% thresholdprovided by the Code.The Board of Directors will review its corporate governancecharter from time to time and make such changes as it deemsnecessary and appropriate. The charter has been madeavailable on the Company’s website (www.tigenix.com) and85 •