Annual report 2009 - Dexia.com

Corporate governanceManagement reportConsolidatedfinancial statementsAnnual financial statementsAdditional informationOperation of the Board of DirectorsArticles of associationThe company’s articles of association set forth the followingrules that govern the operation of the Board of Directors:• All deliberations require the presence or representation ofat least half of the members of the Board;• Decisions are adopted by a majority vote of all memberspresent or represented. If there is a tie vote, the Chairman orthe member replacing him shall cast the deciding vote;• Decisions concerning the operations described belowrequire the presence or representation of at least two thirdsof the members of the Board, and a two thirds majority of allthe members present or represented:- any decision to employ authorised capital or to submit to theOrdinary Shareholders’ Meeting a resolution to approve theissue of shares, bonds convertible or redeemable in shares,warrants or other financial instruments eventually conferringthe right to shares, when the amount of the capital increaseswhich would result from the issue of these shares or the conversionor redemption of these bonds or the exercise of thesewarrants or other financial instruments exceeds 10% of theamount of capital existing prior to these decisions;- any decision relating to the acquisition or sale of assets representingmore than 10% of the company’s equity;- any decision to submit to the Ordinary Shareholders’ Meetinga resolution to amend the company’s articles of association;- any decision relating to the appointment or dismissal of theChairman of the Board of Directors and the Chief ExecutiveOfficer.The Board of Directors may, on an ad hoc basis or generally,invite observers to attend its meetings. These observers donot have a deliberative vote and are bound by the same obligations,particularly of confidentiality, as the directors.Internal rules of the Board of Directorsof Dexia SAThe internal rules of the Board of Directors of Dexia SA,which have been in existence since 1999 and which codifyall the rules intended to enable the Board of Directors fully toexercise its competences and to increase the effectiveness ofthe contribution made by each director, have evolved significantly.The latest amendments were adopted by the Board ofDirectors on 13 November 2008 with the aim of strengtheningthe Group’s governance and risk monitoring. The Boardof Directors in fact decided to adapt its internal rules to alterthe tasks and composition of the specialist committees createdwithin it. On 29 January 2009, the internal rules of theBoard of Directors have been amended in order to adapt theindependence criteria retained by Dexia SA in relation to thenew legal criteria contained in Article 526ter of the CompanyCode. The rules applicable to executives of Dexia SA involvedin proprietary trading in Dexia shares were also strengthenedby the Board of Directors at its meeting on 26 August 2009.General organisational principlesThe Board of Directors is organised to achieve the best exerciseof its expertise and responsibilities.The meetings of the Board are frequent enough to allow theBoard to perform its responsibilities. Board members agree toparticipate actively in the work of the Board and the committeeson which they sit. Attendance at meetings of the Boardand committees is the first condition of this participation andeffective attendance at three quarters of the meetings atleast is desired.The agenda lists the items to be discussed and specifies ifthey are listed for information purposes, for discussion, orfor a vote.The minutes report discussions and record the decisionsmade, specifying reservations issued by some directors, ifapplicable.Obligation of confidentialityThe information provided to the directors in the performanceof their duties, during Board meetings, meetings of the specialistcommittees, or during private interviews, is providedintuitu personæ; they shall ensure that the confidentiality ofsuch information is strictly maintained.The knowledge of privileged information leads to the prohibitionagainst executing, on his own behalf or on behalf ofthird parties, transactions on the securities of the companiesin question and a ban on disclosing this information to thirdparties.Training of Board membersIn order to acquire a solid understanding of the Dexia Group,the new members of the Board of Directors are invited, whenthey take office, to one or two days of contacts and visitswithin the Group.The Board members who sit on the specialist committees arechosen on the basis of their specific skills. They are assistedby outside experts as needed. The tasks of these specialistcommittees are clearly defined in the internal rules of theBoard of Directors, and in the specific internal rules of theAccounts Committee and the Internal Control, Risks andConformity Committee.Conflicts of interestDirectors make sure that their participation in the Board ofDirectors is not a source of direct or indirect conflict of interest,either personally or because of the professional intereststhey represent.They must ensure that their participation in the Board reflectscomplete independence from interests outside the companyitself. In particular, cross-exchanges of directors are to beavoided.Directors submit their mandate to the Board if there is a significantchange in their duties and the Board decides whetherto accept their resignation in such cases, after an opinionfrom the Appointment and Compensation Committee. Theymust resign if a change in their situation creates an incompatibilitywith their office as a Dexia director.If a director directly or indirectly has a conflicting financialinterest in a decision or operation to be decided by the Boardof Directors, he must inform the other members of the Boardbefore they deliberate. His declaration, including the reasonsfor his conflicting financial interest, must be recorded in theminutes of the Board meeting that must make the decision.In addition, he must inform the company’s auditors.For publication in the annual management report, the Boardof Directors describes in the minutes the type of decisionor operation in question and the reasons for the decision30Dexia Annual report 2009