Chrysler 2005 Annual Report Download - page 44

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Therefore, decisions regarding significant transactions are excluded
from the mandate granted to executive directors. The term
“significant transactions” refers to those transactions that in and
of themselves require the company to inform the market thereof,
in accordance with rules established by market supervisory
authorities.
When the Company needs to execute significant transactions, the
executive directors shall provide the Board of Directors reasonably
in advance with a summary analysis of the strategic consistency,
economic feasibility, and expected return for the Company.
Decisions regarding the most significant transactions with related
parties are also excluded from the mandate granted to executive
directors, with all transactions being subject to special rules of
substantial and procedural fairness and disclosure to the Board.
The Board is comprised by three executive directors and twelve
non-executivedirectors – that is, who do not hold delegated
authority or performexecutive functions in the Company or the
Group –, eight of whom are independent.
The executivedirectors are the Chairman, the Vice Chairman, who
substitutes for the Chairman if the latter is absent or prevented from
acting, and the Chief Executive Officer. They also hold management
positions in subsidiaries: Luca Cordero di Montezemolo is
Chairman and Chief Executive Officer of Ferrari S.p.A., John Elkann
is Chairman of Itedi S.p.A., and Sergio Marchionne, in addition
to being Chairman of the principal subsidiaries, is also Chief
Executive Officer of Fiat Auto S.p.A.
An adequate number of independent directors is essential to
protect the interests of stockholders, particularly minority
stockholders, and third parties. At its meeting on May 10, 2005, the
Board of Directorsresolved to submit a motion to the Stockholders
Meeting to increase the number of independent directors so that
they would constitute a majority on the board. The Board of
Directors held that enhancing protections against potential conflicts
of interest was a priority for the Company, particularly in those areas
less prone to control by the Stockholders Meeting. The Board of
Directorsalso proposed that new and more selectivecriteria for
determining independence be adopted. Following the resolutions
passed bythe Stockholders Meeting on June 23, 2005, the Board of
Directorshas a majority of independent directors.
The qualifications of independent directors are assessed annually and
based on the absence or insignificance during the previous three
years of investment, economic, or other relationships maintained
directly, indirectly, or on behalf of third parties with the Company, its
executive directors and managers with strategic responsibilities, its
controlling companies or subsidiaries, or with parties otherwise
related to the Company.
At its meeting held on February 28, 2006, the Board of Directors
confirmed that the directors Angelo Benessia, Flavio Cotti, Luca
Garavoglia, Gian Maria Gros-Pietro, Hermann-Josef Lamberti,Vittorio
Mincato, Pasquale Pistorio and Mario Zibetti satisfied these
requirements of independence.
By going beyond the recommendations of the Corporate
Governance Code, having a board with a majority of independent
directors implements one of the fundamental rules of the NYSE,
even though non-US issuersare not required to adopt it.
Some of the current directors also hold positions at other listed
companies or companies of a significant interest. Excluding the
previously mentioned positions held by executive directors at the Fiat
Group, the most significant are as follows:
Angelo Benessia:Vice Chairman of RCS Quotidiani S.p.A.;
Tiberto Brandolini D’Adda: Chairman and General Manager of
Sequana Capital;Vice Chairman and Chief Executive Officer of
Exor Group; Director of: Giovanni Agnelli e C. S.a.p.az., Espírito
Santo Financial Group, IFIL Investments S.p.A., SGS S.A. and Vittoria
Assicurazioni S.p.A.;
Luca Cordero di Montezemolo: Director of:Tod’s S.p.A., Merloni
Elettrodomestici S.p.A., Pinault Printemps Redoute, Le Monde;
Member of the International Advisory Board of Citigroup Inc.;
Flavio Cotti: Chairman of the Advisory Board of Credit Suisse
Group; Director of Georg Fischer AG;
John Elkann:Vice Chairman of Giovanni Agnelli e C. S.a.p.az.;Vice
Chairman of IFIL Investments S.p.A.; Director of: IFI S.p.A., Exor
Group and RCS MediaGroup;
Luca Garavoglia: Chairman of Davide Campari Milano S.p.A.;
Gian Maria Gros-Pietro: Chairman of Autostrade S.p.A.; Director
Report on Operations Corporate Governance