LensCrafters 2005 Annual Report Download - page 79

> 78 | ANNUAL REPORT 2005
3. the efficacy and transparency of management decisions;
4. the adoption of an adequate internal control system;
5. the adoption of proper and transparent rules governing transactions made by related parties and
relevant persons, intercompany relations, and handling of privileged information.
As far as the first principle is concerned, the values laid down in the Luxottica Group’s Code of Ethics
commit all those working for Luxottica Group to ensuring that all of the Group’s activities are carried out:
in compliance with all relevant laws; within a framework of fair competition; with honesty, integrity and
propriety; and, respecting the legitimate interests of shareholders, employees, customers, suppliers,
sales and financial partners as well as of the communities in which Luxottica Group operates.
II. BOARD OF DIRECTORS
Role and duties. The Board of Directors plays a central role in Luxottica Group’s Corporate
Governance framework.
It is duly authorized and responsible for guiding and managing the entire business, maximizing
shareholder value and ensuring that the expectations of other stakeholders are met.
To this end, the Board approves all matters intended to achieve the Group’s business purpose, except
for those matters which, pursuant to the law or by-laws, are expressly required to be dealt with at a
Shareholders’ Meeting.
By virtue of a resolution dated July 27, 2004, the Board of Luxottica Group S.p.A. resolved that certain
significant matters may only be priorly approved by it; these include:
(i) the definition of Corporate Governance rules and the guidelines for the internal control system of
the Company and the entire Group;
(ii) the approval of the Company’s and the entire Group’s organizational structure, including whether
their organizational, administrative and accounting structures are appropriate;
(iii) the definition of the business, investment and development strategy for the Company and the
entire Group, based on the proposals submitted by the Chief Executive Officer;
(iv) the approval of financial commitments and loans having a duration in excess of twelve months;
(v) the approval of the draft statutory Financial Statements and Consolidated Financial Statements;
(vi) the approval of periodical reports;
(vii) the approval of stock incentive schemes proposed at Shareholders’ Meetings as well as the
definition of the remuneration criteria for senior management;
(viii) the approval of transactions pertaining to the Company or other companies of the Group having
significant economic, P&L or financial impact, including: agreements of a strategic nature with an
economic value in excess of Euro 30 million or which involve a liability lasting for more than three years;
acquisitions or disposals of interests, companies or real estate with a value in excess of Euro 2 million;
and the issue of collateral securities to third parties with a value in excess of Euro 15 million.
Appointment. The current Board of Luxottica Group was appointed by resolutions passed at the
Shareholders’ Meetings held on June 25, and September 14, 2004, respectively. The resolutions were
based on the Company by-laws currently in force, which do not contain a mechanism for list voting.
The proposing shareholder made the CVs of the individual candidates available to the meeting, in order
to enable shareholders to make an informed decision in respect of their voting rights.
All Directors appointed to the Board have the appropriate professional qualifications and experience
required to perform their duties efficiently and effectively.