Chrysler 2007 Annual Report Download - page 54

Corporate Governance
Report on Operations Corporate Governance 53
Introduction
The Fiat Group adopted and abides by the Corporate
Governance Code of Italian Listed Companies issued in March
2006, supplemented and amended as necessary to align its
corporate governance system to the regulatory requirements
arising from the listing on the New York Stock Exchange
(NYSE), withdrawn on August 23, 2007, and the characteristics
of the Group.
Given the extremely limited trading volumes of Fiat stock on
the NYSE, lower than 0.2% of worldwide average daily trading
volume, on August 3, 2007 Fiat requested withdrawal of the
listing of the American Depositary Shares from the United
States market and the consequent termination of registration
from the Securities Exchange Commission and the relevant
reporting obligations. Delisting and deregistration became
effective on August 23 and November 22, 2007, respectively.
The delisting of Fiat stock from the United States market does
not impact the operating strategy of Fiat in the United States
or its commitment to maintain high corporate governance and
financial disclosure standards. In order to assist those
investors holding Fiat ADRs, Fiat has nonetheless maintained a
Level 1 American Depositary Receipt facility.
In compliance with the obligations imposed by law and
regulations, every year the Company prepares the “Annual
Report on Corporate Governance” which provides a general
description of the corporate governance system adopted by the
Group and contains information on its ownership structure,
adherence to the Corporate Governance Code, and compliance
with consequent commitments. This Report, which is available
in the Corporate Governance section of the website
www.fiatgroup.com, is divided into four sections: the first
contains a description of the governance structure, the second
gives information on our ownership structure, the third
provides an analysis on the implementation of the provisions
of the Code, and the fourth comprises summary tables and
Corporate Governance documents of the Fiat Group as well as
a comparison in which information on the modalities of
implementation of the Code is organised and supplemented
according to each principle and criterion of the Code.
Highlights relevant to this Report on Operations are illustrated
below.
Direction and Coordination Activities
Fiat S.p.A. is not subject to direction and coordination activities
by companies or entities and defines in full autonomy its
general and operational strategic lines. The Italian companies
that Fiat S.p.A. directly and indirectly controls, with the
exception of particular cases, have identified Fiat S.p.A. itself
as the entity that performs direction and coordination
activities, pursuant to Article 2497 bis of the Italian Civil Code.
This activity consists in indicating the general strategic and
operating guidelines of the Group and takes concrete form in
the definition and updating of the internal control system, the
corporate governance model and the corporate structure, the
issuance of a Code of Conduct applied throughout the Group,
and setting forth the general policies for the management of
human and financial resources, purchasing of factors of
production and marketing, and communication. Furthermore,
coordination of the Group includes centralised management,
through specialized in-house companies, of treasury, corporate
and accounting, internal audit, and training services.
This allows the subsidiaries, which retain full management and
operating autonomy, to realise economies of scale by availing
themselves of professional and specialised services with
improving levels of quality and to concentrate their resources
on the management of their core business.
Board of Directors
As envisaged in the By-laws, the number of members of the
Board of Directors ranges from nine to fifteen.
The Stockholders Meeting held on May 3, 2006 set the number
of members of the Board of Directors at fifteen and they shall
remain in office until the date of the Stockholders Meeting that
will be called to approve the 2008 financial statements.
Pursuant to amendments to the Company’s By-laws (Article 11)
effected in 2007, the Board of Directors must be appointed
through the vote list system so that minority stockholders can
elect a director. The minimum equity interest required for
submission of a list of candidates is currently 0.5% of ordinary
shares, in accordance with the communication published by
Consob applicable to the 2007 fiscal year. Each list must
indicate at least one candidate that satisfies the independence
requirements imposed by law.
As envisaged in Article 16 of the Company’s By-laws, the
representation of the Company is vested, severally, in all