SCH2017_DRF_EN_Livre.indb

3 Corporate governance report

Organizational and operating procedures of the board of directors

Article 7 provides that non-voting members who attend Board meetings in an advisory capacity are subject to the same code of ethics as directors. Articles 8 to 13 apply to the committees. The content of these articles is provided in the section on committees below. Article 14 defines the scope of the internal regulations of the board of directors.

to the vote of the corresponding decision and may be invited to leave the meeting of the board of directors when the decision is debated; E may not hold more than 4 other directorships in listed companies outside the Group; E hold at least 1,000 shares of Company stock; E are bound by the Group’s stock market ethics code, which provides strict rules concerning their transactions on Schneider Electric SE shares (see below); E attend the Shareholders’ Meeting. To ensure that the board of directors is well informed at all times, Schneider Electric SE applies the following rules: members of the board have access, via a secure dedicated platform, in principle 10 days before every board meeting, to the agenda for the meeting and to the draft minutes of the last meeting and, 4 to 5 days before, to the board’s file. The documentation includes a quarterly activities report, presentations on items scheduled on the agenda or notes and, as appropriate, draft social and consolidated financial information. A supplementary file may also be provided at the meeting. Executive Committee members are invited, depending on the subject, to present the major issues within their areas of responsibility. The statutory auditors attend the portion of the board’s meetings at which the statutory and interim financial statements are reviewed. Between each meeting of the board of directors, aside from meetings that they may have with the Chairman and CEO, directors receive continuous information through periodic information letters, drafted exclusively for their attention, which keep them informed of developments in the Group, the competitive environment and developments in investor consensus and feedback. They also receive a weekly press review, all of the company’s press releases, financial analysts’ reports and other documents. Members also have the opportunity to meet informally with key members of Senior Management between board meetings. Board of directors, dinners are also organized in order to offer more opportunities to interact with investors, customers, distributors, etc. These dinners are meant to provide the board members with external views on the Group, to increase their understanding of the changes in its business environment and to gain more insight on the needs and motivations of all stakeholders. For new directors, training and information programs may be organized on the Group’s strategy and businesses. They are designed on a case to case basis. However, they generally involve a work 2.4

Information of the board of directors and its members

session with the Strategy Director, meetings with members of the Executive Committee and visits to sites which that are particularly illustrative of Schneider Electric’s activities. During the Strategy Session of 2017, which took place in Mainland China and Hong Kong, external visits and interviews with the major players of the digital transformation – who are sometimes also partners of the Group - were organized for directors, who also visited the R&D Center of Schneider Electric in Shanghai. Insider ethics code Schneider Electric has adopted an ethics code for members of the board of directors and Group employees designed to prevent insider trading. Under these provisions, both directors and relevant employees are barred from trading in the Company shares and shares in companies for which they have information that has not yet been made public. In addition, they may not trade in Schneider Electric SE shares during the 31 days preceding the day following publication of the annual and interim financial statements, nor during the 16 days preceding the day following publication of a quarterly update, nor may they engage in any type of speculative trading involving Schneider Electric SE shares (including margin trading, purchasing and selling shares in a period of less than 4 months, etc. ). In addition, in accordance with the AFEP/MEDEF Corporate Governance Code, corporate officers also undertake not to enter into hedges of shares resulting from exercise of options and of performance shares they are required to hold (see page 211). These restrictions supplement the prohibition against hedging unvested stock options and performance shares during their vesting period. The code of insider ethics was updated in 2016 to conform to the new prescriptions of the European Regulation No. 596/2014 of April 16, 2014 on market abuse “Market Abuse Regulation” in order to prevent insider trading and market abuse practices.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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