Chrysler 2009 Annual Report Download - page 78

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The voting list system for the election of the Board of Directors was used for the first time at the General Meeting on 27 March 2009. On that occasion,
the Company invited shareholders who, individually or jointly with others, owned at least 1% of ordinary shares (as established by Consob with
reference to Fiat’s average market capitalisation for the fourth quarter of 2008) to submit lists of candidates who satisfied the requirements of law and
the Company’s By-laws. EXOR S.p.A., holder of 30.45% of ordinary shares, was the only shareholder to submit a list of candidates and, therefore,
all candidates on the list were elected.
Under Article 16 of the Company By-laws, all directors with executive responsibilities are vested, separately and individually, with the power to represent the
Company and under Article 12 the Vice Chairman, if appointed, shall act as Chairman if the latter is absent or unable to carry out his role. In application of
this provision, the Board of Directors has, as in the past, adopted a model which delegates broad operating powers to the Chairman and the Chief Executive
Officer who are empowered, separately and individually, to perform all ordinary and extraordinary acts that are consistent with the Company’s purpose
and not reserved by law for, or otherwise delegated or assumed by, the Board of Directors itself. In practice, the Chairman has the role of coordination and
strategic direction for the activities of the Board of Directors, while the Chief Executive Officer is responsible for the operational management of the Group.
From an operational perspective, the Chief Executive is supported by the Group Executive Council (GEC), a decision-making body led by the Chief Executive
and composed of the heads of the operating sectors and certain central functions.
The Board has established “Guidelines for Significant Transactions and Transactions with Related Parties” in which it reserves the right to prior
examination and approval of any transaction having a significant impact on the Company’s earnings and financial position, including the most significant
transactions with related parties, and has made all transactions with related parties subject to specific criteria in terms of substance and procedure. Therefore,
decisions relating to significant transactions are excluded from the powers conferred on executive directors. “Significant transactions” are considered to
be those transactions that, in and of themselves, the company is required to disclose to the market in accordance with specific rules established by the
regulatory authorities. When the Company has the need to undertake a significant transaction, the executive directors are to provide the Board of Directors
with a summary analysis of the strategic compatibility, economic feasibility and expected return for the Company a reasonable time in advance. Decisions
regarding the most significant transactions with related parties are also excluded from the powers conferred on executive directors, with all such transactions
being subject to specific criteria in terms of substance and procedure and requiring disclosure to the Board.
Pursuant to Article 12 of the By-laws, after receiving the opinion of the Board of Statutory Auditors, the Board of Directors shall appoint the manager
responsible for the preparation of the Company’s financial reports. The Board may vest with the relevant functions more than one individual
provided that these individuals perform such functions together and have joint responsibility. Only a person who has acquired several years of experience
in the accounting and financial affairs at large companies may be appointed. In execution of this provision of the By-laws, the Board of Directors
appointed the heads of the Group Control and Group Treasury functions as jointly responsible for preparing the Company’s financial reports, vesting
them with the relevant powers.
At 31 December 2009, the Board of Directors was composed of three executive directors and twelve non-executive directors, who have not been delegated
specific authorities or executive responsibilities at the Company or the Group, eight of whom (representing a majority) qualified as independent on the basis
of the criteria approved by Shareholders on 27 March 2009, which were as previously adopted. As required by law and the By-laws, two of the directors
(Gian Maria Gros-Pietro and Mario Zibetti) also meet the requirements of independence as stipulated in Legislative Decree 58/98.
The executive directors are the Chairman, the Vice Chairman, who substitutes for the Chairman if the latter is absent or prevented from carrying out his
role, and the Chief Executive Officer. These directors also hold management positions at subsidiary companies: Luca Cordero di Montezemolo is Chairman
of Ferrari S.p.A., John Elkann is Chairman of Itedi S.p.A., and Sergio Marchionne who, in addition to being Chairman of the principal subsidiaries including
CNH Global N.V. (an NYSE-listed company), is also Chief Executive Officer of Fiat Group Automobiles S.p.A.
An adequate number of independent directors is essential to protect the interests of shareholders, particularly minority shareholders, and third parties. For
this reason, and believing it to be significantly in the Company’s interests to maintain a high level of guarantees and protection against potential conflicts of
interest, the Board of Directors proposed that for the elections held on 27 March 2009, Shareholders elect - in addition to the two independent directors
required by law - an appropriate number of independent directors and confirm the criteria for determining independence adopted for previous elections.