Chrysler 2011 Annual Report Download - page 95

94 Report on
Operations
Corporate
Governance
Essential components of the Internal Control System are the Code of Conduct, adopted in 2002 to replace the Code of Ethics and revised in 2010, and
the Compliance Program, adopted by the Board of Directors in implementation of regulations on the ‘Liability of Legal Persons’ pursuant to Legislative
Decree 231/2001, as amended. The Code of Conduct sets out the ethics principles to which the Company adheres and which directors, statutory auditors,
employees, consultants and partners are required to observe.
In a resolution approved on 22 February 2012, the Board of Directors noted that the Fiat S.p.A. Compliance Program (ex Legislative Decree 231/2001)
had been updated and new Guidelines for Adoption and Revision of the Compliance Program by Group companies in Italy had been issued to reflect
developments in legislation.
With these amendments, new criminal offenses were included and the relevant sensitive processes were identified. In particular, Environmental Offenses
were introduced to Legislative Decree 231/2001 through Legislative Decree 121/2011.
The Compliance Program Supervisory Body is composed of the Head of Internal Audit, the General Counsel, and an external advisor. It has its own Internal
Policies and Procedures and operates on the basis of a specific supervisory program. It meets at least once per quarter and reports to the Board of Directors
(including through the Internal Control and Risk Committee) and the Board of Statutory Auditors.
In applying the Compliance Program, the Code of Conduct, and the provisions on whistleblowing in the Sarbanes-Oxley Act (to which the Company was
subject while listed on the NYSE), Whistleblowing Procedures were adopted on 1 January 2005 for the management of reports and claims filed by
persons inside and outside the Company in relation to suspected or presumed violations of the code of conduct, fraud involving company assets or financial
reporting, oppressive behavior towards employees or third parties, reports or claims regarding accounting, internal accounting controls and independent
audits.
The Procedure for the Engagement of Audit Firms regulates the engagement of audit firms and other related parties, by Fiat S.p.A. and its subsidiaries, in
order to ensure the independence of firms engaged to audit the financial statements. Related parties of an audit firm are considered to be entities belonging
to the same network, as well as equity partners, shareholders, directors, members of management and supervisory bodies and employees of the audit firm.
With reference to the “Conditions for the listing of shares of companies having control over companies incorporated and regulated under the laws of a non-
EU member State”, pursuant to Articles 36 and 39 of the Market Rules, the accounting systems in place at the Company and its subsidiaries, as discussed
in the Annual Report on Corporate Governance, enable public disclosure of certain accounting information prepared by companies included in the scope
of application of the Regulation and used in preparation of the consolidated financial statements and are adequate for the regular provision to management
and the Parent Company’s auditors of information necessary for preparation of the consolidated financial statements. In addition, there is an effective flow
of information to the Parent Company’s auditors, including regular information on the composition of corporate bodies within all subsidiary companies and
the position held by each member. The Company is also is responsible for systematically maintaining and updating centralized records of formal documents
related to the By-laws and delegation of powers to members of the corporate bodies. The requirements of Article 36 (a) (b) and (c) of the Market Rules issued
by Consob have therefore been satisfied, including in relation to the acquisition of control of Chrysler Group LLC during 2011.
Board of Statutory Auditors
As required under Article 17 of the By-laws, the Board of Statutory Auditors is comprised of three regular auditors and three alternates, all of whom must be
entered in the Register of Auditors and have at least three years’ experience as a statutory account auditor. They may, within the legal limit, also hold other
positions as director or regular auditor.
Pursuant to Legislative Decree 58/98 and in accordance with Article 17 of the Company’s By-laws, appropriately constituted minority groups have the
right to appoint one regular auditor, to serve as Chairman, and one alternate auditor. The By-laws also establish that the minimum equity interest required
for submission of a list of candidates for elections of the Statutory Auditors may not be lower than the percentage required by law for elections of the Board
of Directors. That equity interest, as established by Consob with reference to Fiat’s average market capitalization for the fourth quarter of 2011, is equal
to 1% of ordinary shares. The lists presented, together with the documentation required by law and the Company’s By-laws, must be placed on record at
the Company’s registered office at least 25 days prior to the date set for the General Meeting on first call. If, at the legally established deadline, only one list
has been presented, the minimum percentage required to present a list is, by law, reduced to 0.5% and the deadline is extended a further 3 days. On 27
March 2009, the Board of Statutory Auditors was elected by Shareholders using the voting list system. That system will be used again for re-election of the
Statutory Auditors at the General Meeting called for approval of the 2011 financial statements.