Louis Vuitton 2003 Annual Report Download - page 12

10 LVMH ANNUAL
REPORT 2003
CORPORATE GOVERNANCE
The objectives of the Board of Direc-
tors, the strategic body of LVMH, are
to ensure the sustainable development
of the value of the company, to adopt
the major strategies that guide its
management, to verify the fair and
accurate presentation of information
about the company, and to protect its
corporate assets.
As part of its mission, the Board of
Directors supports the priority objec-
tive of LVMH management, which is, as
it always has been, to ensure the conti-
nuous growth of the Group and a
steady increase in value for its share-
holders.
The Board of Directors has adopted a
Charter that spells out the member-
ship, mandates, operations and respon-
sibilities of the Board of Directors.
The Board of Directors has two com-
mittees, the membership, role and
mandates of which are defined by
internal procedural rules.
The Board of Directors’ Charter and
the rules of the committees are provi-
ded to every candidate for the position
of director, and to the permanent
representative of any legal entity,
before he assumes his duties.
BOARD OF DI RECTORS
The Board of Directors is made up of
sixteen members, six of whom are inde-
pendent and free of any interests with
respect to the Company.
Members of the Board of Directors must
personally own at least five hundred
registered shares of LVMH.
The Board of Directors met four times
in 2003, with an average attendance
rate of 90%. The Board approved the
annual and interim financial statements
and reviewed the Group’s major strate-
gic guidelines, budget, and the issue of
a bond, as well as various agreements
with affiliated companies.
LVMH paid a total of 969,450 euros in
directors’ fees to the members of its
Board of Directors. These fees were dis-
tributed among the directors and advi-
sor in accordance with a distribution
key defined by the Board of Directors
that takes into account the duties per-
formed on the Board and in the Com-
mittees.
PERFORMANCE
AUDI T COMMITTEE
The Performance Audit Committee is pri-
marily responsible for making certain the
accounting principles followed by the
Company are in compliance with gene-
rally accepted accounting principles
and for reviewing the parent company
and consolidated financial statements
before they are submitted to the Board
of Directors.
It is currently made up of four directors,
three of whom are independent. Its
members and Chairman are appointed
by the Board of Directors.
The Committee met five times in 2003.
All the meetings except for one were
attended by all members, as well as by
the Auditors, the Chief Operating
Officer, the Chief Financial Officer, the
Advisor to the Chairman, the Manage-
ment Control Director, the Internal
Audit Director, the Accounting Director,
the Senior Vice President Taxes and the
General Counsel.
In addition to reviewing the corporate
and consolidated financial statements,
the work of the Committee includes
reviews of the internal audit, certain
agreements with affiliated companies,
the status of the request for proposals to
replace the Statutory Auditors, and
valuations of the Group’s brands and
goodwill.
NOMI NATING
AND COMPENSATION COMMI TTEE
The responsibilities of the Nominating
and Compensation Committee are lis-
ted below:
–recommendations on the distribution
of Directors’ fees paid by the Company,
as well as compensation, in-kind bene-
fits and stock options granted to
the Chairman of the Board of Direc-
tors, the Chief Executive Officer and
the Deputy Managing Director of the
Company,
–opinions on candidates for the posi-
tions of Director, Advisor to the Board
or membership on the Executive
Committee of the Group or the gene-
ral management of its principal subsi-
diaries, on the compensation and
in-kind benefits granted to the Direc-
tors and Advisors of the Company by
the Company or its subsidiaries, and
on fixed or variable, immediate or
deferred compensation and incentive
plans for senior executives.
The Committee has three members,
two of whom are independent. Its
members and its Chairman are appoin-
ted by the Board of Directors.
The Committee met three times in
2003 with all its members in atten-
dance. It issued recommendations on
the compensation and awarding of
stock options to senior executives, and
issued an opinion on the compensation
awarded to some Directors by the
Company or its subsidiaries. It also
issued an opinion on the applications
for Board positions.