Chrysler 2003 Annual Report Download - page 38

37 Report on Operations
The Fiat Group adopted and abides by the Corporate
Governance Code of Italian listed companies, which is
mentioned as a model in the regulations issued by Borsa
Italiana (Italian Stock Exchange) on corporate governance.
Furthermore, as an issuer of financial instruments listed on
various international markets, including the New York Stock
Exchange, Fiat adopted a system of corporate governance
in line with the principles of international best practice and
in particular United States laws, which were recently updated
by the Sarbanes-Oxley Act.
An Annual Report on Corporate Governance is prepared
in accordance with the Regulations of the Borsa Italiana
and United States laws regulating foreign issuers. This report
is available in the section “Investor Relations” on the website
“www.fiatgroup.com,” although extensive excerpts from it
are reproduced in the paragraphs that follow.
Section III “US Corporate Governance Standards” of said
report specifically deals with the main differences between
the corporate governance model we adopted and the one
that US issuers of listed securities are required to comply with.
Frequent reference will also be made to the current Articles
of Association, to which major revisions are proposed both
in consequence of the recent reform of corporate law and the
most recent trends in corporate governance. When relevant,
the amendments that will be submitted for consideration
by the Stockholders’ Meeting will be illustrated together
with the currently applicable rules envisaged in the Articles
of Association.
Board of Directors
As envisaged in the Articles of Association, the number of
members of the Board of Directors ranges from nine to fifteen.
The Stockholders’ Meeting held on May 13, 2003 set the
number of members of the Board of Directors at eleven for
fiscal years 2003, 2004, and 2005, and they shall remain in office
until the date of the Stockholders’ Meeting that will be called
to approve the 2005 Annual Report.
The current members are comprised by three executive
directors and eight non-executive directors – that is, who do not
hold delegated authority or perform executive functions in the
Company or the Group – five of whom are independent.
The executive directors are the Chairman, the Chief Executive
Officer, and the director Luca Cordero di Montezemolo, who,
although he does not hold specific positions in accordance with
the Articles of Association, is defined as an executive director
insofar as he is the head of the Ferrari-Maserati sector, in which
he holds the most important corporate positions with broad
powers.
The requirements for qualifying as independent directors,
which were recently tightened under both Italian and United
States law, are reviewed annually and based on the absence
of investment in or economic relationships with the Company,
its executive directors, its controlling companies or subsidiaries,
or kinship ties to the executive directors of these companies
such as to compromise their independent judgment.
The Board of Directors recently confirmed that the directors
Angelo Benessia, Flavio Cotti, Luca Garavoglia, Hermann-Josef
Lamberti, and Sergio Marchionne satisfied these requirements
of independence.
The presence of five independent directors amply satisfies
the requirements envisaged in the recommendations of the
Corporate Governance Code.
Some of the current directors also hold positions at other listed
companies or of a significant interest. Excluding the positions
held by executive directors at the Fiat Group, the most
significant are as follows:
❚Umberto Agnelli: Chairman of Giovanni Agnelli e C. Sapa,
Chairman of IFI S.p.A., Director of Mediobanca S.p.A. and
Worms & Cie
❚Angelo Benessia: Vice Chairman of RCS Quotidiani S.p.A.
❚Luca Cordero di Montezemolo: Director of Tod’s S.p.A.,
Merloni Elettrodomestici S.p.A., Unicredit Banca d’Impresa
S.p.A., and Pinault Printemps Redoute
❚Flavio Cotti: Chairman of the Advisory Board of Credit Suisse
Group
❚John Elkann: Director of Giovanni Agnelli e C. Sapa,
IFI S.p.A. and Exor Group
❚Luca Garavoglia: Chairman of Davide Campari Milano S.p.A.
❚Franzo Grande Stevens: Chairman of P. Ferrero & C. S.p.A.
and Juventus S.p.A., Director of IFI S.p.A., IFIL S.p.A., Davide
Campari Milano S.p.A., IPI S.p.A., Pininfarina S.p.A., RCS
Mediagroup S.p.A, Toro Assicurazioni S.p.A., Banca del
Piemonte, Banca Sella and Exor Group
❚Hermann-Josef Lamberti: Member of the Managing Board
of Deutsche Bank AG, Director of Eurex Deutschland,
Euroclear Bank S.A. and Schering AG
❚Sergio Marchionne: Chairman of Lonza Group AG, Chief
Executive Officer of SGS S.A., Director of Serono S.A.
❚Daniel J. Winteler: Director of IFIL S.p.A., Worms & Cie,
ClubMed and Juventus S.p.A.
The Company’s Articles of Association do not envisage
special rules for the appointment of Directors or nomination
of candidates. Nevertheless, the majority stockholder has
made it a rule to comply with the recommendations set
forth in this respect by the Corporate Governance Code.
Consequently, also on the occasion of the Stockholders’
Meeting of May 13, 2003 which appointed the new Board
of Directors, it deposited the nominations and curricula vitae
of the candidates ten days before the date of the first call
for the Stockholders’ Meeting.
Corporate Governance