Chrysler 2010 Annual Report Download - page 90

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Under Article 16 of the 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 by which they are authorized, 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.
In accordance with Consob Regulation 17221 of 12 March 2010, the Company has adopted, effective 1 January 2011, “Procedures for Transactions
with Related Parties” (the “Procedures”) to ensure full transparency and substantial and procedural fairness in transactions with related parties, as
defined under IAS 24.
The Procedures define “significant transactions” that require the prior approval of the Board, subject to the binding opinion of the Internal Control Committee
(which serves as the committee responsible for related-party transactions, except for matters relating to remuneration, for which the Compensation
Committee is responsible), and that must be publicly disclosed in the form of an information document.
Other transactions, except those falling within the residual category of minor transactions – i.e., transactions less than €200,000 in value or, for
transactions with legal entities having consolidated annual revenues in excess of €200 million only, transactions less than €10 million in value – are
defined as “non-significant” and may be entered into with the prior non-binding opinion of the abovementioned committee.
The Procedures also establish exemptions, including transactions taking place in the ordinary course of business and entered into at standard or market
terms, and transactions with or between subsidiaries and associates, provided that no other parties related to the Company have a significant interest.
The task of implementing the Procedures and disseminating them to Group companies is assigned to the managers responsible for the Company’s
financial reporting, who must also ensure coordination with the administrative and accounting procedures required under Article 154-bis of Legislative
Decree 58/98.
With regard to significant transactions, the “Guidelines for Significant Transactions and Transactions with Related Parties” shall also continue to apply
(subsequently renamed “Guidelines for Significant Transactions”), under which transactions having a significant impact on the Company’s earnings
and financial position are subject to the prior examination and approval of the Board.
As such, the powers conferred on executive directors specifically exclude decisions relating to significant transactions that, in and of themselves, the
company is required to disclose to the market in accordance with specific rules established by 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.
Pursuant to Article 12 of the By-laws, after an opinion has been expressed by the Board of Statutory Auditors, the Board of Directors shall appoint the
executive officer responsible for the Company’s financial reporting. The Board may vest more than one individual with the relevant functions
provided that those individuals perform such functions jointly and with joint responsibility. Only individuals who have acquired several years of experience in
the accounting and financial affairs of 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 Treasury and Financial Services functions as jointly responsible for preparing the Company’s financial reporting, vesting
them with the relevant powers.
At 31 December 2010, 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 equivalent to those adopted previously. 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 Chairman and Chief Executive Officer are executive directors. They also hold executive responsibilities at subsidiary companies: 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 Group
Automobiles S.p.A. Luca Cordero di Montezemolo also qualifies as an executive director by virtue of his position as Chairman of Ferrari S.p.A.