Chrysler 2011 Annual Report Download - page 92

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and, subsequently, renew its mandate. Under Article 11 of the By-laws, Board members are elected through a voting list system which ensures minority
shareholders the opportunity to elect a director to the Board. The minimum equity interest required for submission of a list of candidates is established by
Consob with reference to the Company’s market capitalization for the last quarter of the final financial year of the mandate. Each list must indicate at least
one candidate that satisfies the legal requirements for independence.
The voting list system was utilized for the election of the Board of Directors for the first time at the General Meeting of 27 March 2009 and will also be used
for renewal of the term of office of the Boards of Directors and Statutory Auditors at the General Meeting of 4 April 2012. In 2009, 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
capitalization for the fourth quarter of 2008 and confirmed with reference to the Company’s average market capitalization for the fourth quarter of 2011) to
submit, at least 15 days prior to the General Meeting, lists of candidates ranked in numerical order who satisfied the requirements of law and the Company’s
By-laws. On the basis of existing regulatory provisions, the minimum period for submission of a list of candidates to the Company has been increased to at
least 25 days prior to the date of the General Meeting.
In 2009, 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 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 duties. In application of
this provision, the Board of Directors has, as in the past, adopted a model for delegation of 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 Officer 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 of certain central functions. As a result of the acquisition
of majority ownership of Chrysler Group and consistent with the objective of enhancing the operational integration of Fiat S.p.A. and Chrysler Group, on 1
September 2011 a new Group Executive Council (GEC) was formed which is now composed of 4 main groupings: regional operations, brands, industrial
processes, and support/corporate functions.
The Company adopted, effective 1 January 2011, procedures for transactions with related parties to ensure full transparency and substantial and procedural
fairness in transactions with related parties, as defined under IAS 24. The Procedures define “significant transactions”, which require the prior approval of
the Board – subject to the binding opinion of the Internal Control and Risk Committee (formerly the Internal Control Committee), which is the committee
responsible for related-party transactions, with the exception of those matters relating to compensation, for which the Compensation Committee is
responsible – and 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 above committee. The Procedures also establish exemptions, including:
transactions taking place in the ordinary course of business and entered into at standard or market terms; transactions with or between subsidiaries and
transactions with associates, provided that no other parties related to the Company have a significant interest; and transactions of minor value.
The task of implementing the Procedures and disseminating them to Group companies is assigned to the manager 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.
The “Guidelines for Significant Transactions and Transactions with Related Parties” 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 prior
examination and approval by the Board.
As such, the powers conferred on the executive directors specifically exclude decisions relating to significant transactions that, in and of themselves,
require that the Company make a public disclosure in accordance with specific requirements established by regulatory authorities. Prior to the Company
undertaking a significant transaction, the executive directors are to provide the Board, a reasonable period in advance, with a summary analysis of the
strategic compatibility, economic feasibility and expected return.
Pursuant to Article 12 of the By-laws, the Board of Directors shall appoint, following consultation with the Board of Statutory Auditors, the manager
responsible for the Company’s financial reporting. Where more than one individual is appointed, they shall have joint responsibility. Only individuals with
Report on Operations