Chrysler 2011 Annual Report Download - page 91

Report on
Operations
90
Corporate
Governance
Foreword
Fiat Group adheres to the new Corporate Governance Code for Italian Listed Companies issued in December 2011, with the modifications related to the
specific characteristics of the Group. In a series of meetings held in February 2012, the Board of Directors, at the proposal of the Compensation Committee,
established a Compensation Policy which incorporates the recommendations of the Corporate Governance Code and regulations issued by Consob which
took effect on 31 December 2011. That Compensation Policy forms the first part of the Report on Compensation and will be submitted to Shareholders
for approval at the General Meeting called to approve the 2011 financial statements. In addition, with support from the Committees, the Board undertook
an analysis of those principles and criteria that have been revised in the new version of the Code and the effective implementation of those principles and
criteria by the Group.
Based on the results of that analysis, the Board established guidelines for the System of Internal Control and Risk Management, redefining the role of the
Internal Control Committee, now named Internal Control and Risk Committee, and the various entities and individuals involved.
In accordance with legal and regulatory requirements, the Company prepares an “Annual Report on Corporate Governance” which provides a general
description of the Group’s corporate governance system together with information on its ownership structure and adherence to the provisions of the
Corporate Governance Code, including key governance practices and the principal characteristics of the system of internal control and risk management
including in relation to financial reporting. The Report, which is available in the Corporate Governance section of the Group website (www.fiatspa.com), is
divided into four sections: the first contains a description of the governance structure; the second gives information on the ownership structure; the third
provides an analysis of implementation of specific recommendations of the Corporate Governance Code and describes the principal characteristics of the
system of internal control and risk management, including in relation to financial reporting and key governance practices; and, the fourth includes tables
summarizing Fiat’s ownership and board structure, a side-by-side comparison illustrating Fiat’s application of the principles and criteria of the revised Code,
as well as the principal corporate governance related documents. This section provides a summary of aspects relevant to the Report on Operations. The
Corporate Governance Code is available on the website of Borsa Italiana S.p.A. (www.borsaitaliana.it).
Direction and Coordination
Fiat S.p.A. is not subject to the direction and coordination of any other company or entity and has full independence to define its strategic and operational
guidelines. Fiat’s direct and indirect subsidiaries in Italy have, with a few specific exceptions, named Fiat as the entity which, pursuant to Article
2497-bis of the Civil Code, exercises direction and coordination over them. That activity consists in setting general strategic and operating guidelines for
the Group through definition and updating of the internal control and risk management system, corporate governance model and corporate structure,
and establishment of a group-wide Code of Conduct, in addition to definition of policies for the management of personnel and financial resources, and for
the procurement of production materials, and marketing and communications services. Coordination of the Group also encompasses centralized cash
management, corporate and accounting, and internal audit services, including through specialized companies.
Direction and coordination undertaken at group level enables subsidiaries, which retain full management and operating autonomy, to achieve economies
of scale by availing themselves of professional and specialized services with improving levels of quality and to concentrate their resources on management
of their core business.
Board of Directors
Pursuant to the By-laws, the Board of Directors may be composed of between nine and fifteen members. At the General Meeting held on 27 March
2009, Shareholders elected fifteen Board members whose term of office expires on the date of the General Meeting called to approve the 2011 financial
statements. Accordingly, at that forthcoming General Meeting, Shareholders will be called upon to determine the number of seats on the Board of Directors
Corporate Governance