Chrysler 2013 Annual Report Download - page 105

104 Report on Operations
Subsidiaries headquartered outside Italy generally benefit from those activities. However, Chrysler, which has a board of directors composed
of a majority of members not affiliated with Fiat S.p.A., relies directly on capital markets funding for its operations and for those of its
subsidiaries and manages its financial resources independently. The board of directors of Chrysler Group LLC, in addition to ensuring
maintenance of Chrysler Group’s standalone financial integrity, has oversight responsibilities for Chrysler Group operations, including
approval of capital expenditures above certain levels and, during 2013, the review and approval of non-Alliance transactions above de
minimis levels between Fiat and Chrysler Group LLC. On 21 January 2014, Fiat S.p.A., through its wholly owned subsidiary Fiat North
America LLC, completed the acquisition of all of the VEBA Trust’s membership interests in Chrysler Group LLC. Chrysler Group subsequently
became an indirect wholly-owned subsidiary of Fiat (see “Subsequent Events” for further details).
Board of Directors
The By-laws establish that the Company’s Board of Directors may be composed of between nine and fifteen members. With due
consideration given to the Company’s increased focus in the automobiles sector following the demerger of the capital goods activities to
Fiat Industrial, on 4 April 2012 Shareholders voted – at the recommendation of the Board – to set the number of board members at nine. In
addition, in recognition of the benefits of gender diversity among the board’s members, shareholders voted to elect two women directors,
resulting in early application by the Company of the legal requirements that will apply from 2015. 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 in the fourth quarter of the last financial year of the Board’s mandate. Each list must indicate at least one candidate that
satisfies the legal requirements for independence.
The voting list system was utilized for the first time for the election of the Board of Directors at the General Meeting of 27 March 2009 and
was used for the renewal of the Boards of Directors and Statutory Auditors at the General Meeting of 4 April 2012. 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 2011) to submit lists of candidates – indicated in numerical order and who satisfied the
requirements of law and the Company’s By-laws – to the Company at its registered office at least 25 days prior to the General Meeting.
Two lists of candidates for the Board of Directors were presented: one list was presented by EXOR S.p.A., holder of 30.465% of shares, and
the other by a group of Italian and international asset managers and institutional investors, holders of a combined 1.86% of shares.
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 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 and Chrysler, on 1 September 2011 a new Group Executive Council was formed which
is composed of 4 main groupings: regional operations, brands, industrial processes, and support/corporate functions. Certain functions that
are fundamental to the governance structure of individual companies (such as Legal and Internal Audit) remain independent within the ambit
of the operating companies (Fiat and Chrysler Group).
Corporate Governance