Annual Report on Corporate Governance 2012

The document

The Group’s governance structure consists of a management and control system and general meetings of shareholders.
In addition, as required by law, the accounts are reviewed by independent auditors.
The system of management and control adopted by Fiat is based on a Board of Directors and a Board of Statutory Auditors.

Download PDF

Facts & Figures

Share capital
4,476,441,927.34
Ordinary shares
1.250.402.773
Preference shares
103.292.310
Savings shares
79.912.800
Fiat shareholders
about240,000
Independent Directors
4/9
% Attendance at Board meetings
98
% Attendance at Committee meetings

100%

% Attendance components of Board of Statutory Auditors at meetings of Board of Directors and Board of Statutory Auditors
100%
Board of
Directors

Control and
Risk Committee

Compensation
Commitee

Indipendent auditors

Board of
Statutory

Nominating,
Corporate Governance
and Committee

General
Meetings

General Meetings

General meetings General meetings are the mechanism through which all shareholders are represented. At ordinary general meetings, Shareholders vote on approval of the annual financial statements, appointment and dismissal of members of the Board of Directors, appointment of members of the Board of Statutory Auditors and its Chairman, compensation of the Directors and Statutory Auditors, engagement of the independent auditors, and actions relating to the obligations of the Directors and Statutory Auditors.

At extraordinary general meetings, Shareholders vote on amendments to the By-laws and transactions of an extraordinary nature such as capital increases, mergers and demergers, except where decision-making authority is attributed to the Board of Directors under Article 15 of the By-laws, as indicated above. As required under Article 123-ter of Legislative Decree 58/98, Shareholders are also asked to give a non-binding vote on the Compensation Policy, which forms the first section of the Compensation Report.
Pursuant to Article 8 of the By-laws, holders of voting rights are entitled to attend, or be represented at, general meetings, provided that the appropriate certification from an authorized intermediary is communicated to the Company in accordance with the applicable law. For each general meeting, the Company may designate one or more representatives that holders of voting rights can designate as their proxy and instruct to vote on one or more motions on the agenda. Details of the designated representative(s) and the procedure and deadline for conferring proxy are provided in the notice calling the meeting. For the General Meeting to be held 9 April 2013 (single call), the Company has designated Servizio Titoli S.p.A.
An ordinary general meeting is considered regularly convened and any resolutions adopted valid when the majorities required by law are present (at first call, at least one-half of shares must be represented and resolutions are adopted by an absolute majority; at a single or second call, any portion of shares may be represented and resolutions are adopted by an absolute majority). For elections of Directors and Statutory Auditors, a relative majority is sufficient.
An extraordinary general meeting is considered regularly convened and resolutions adopted valid when the majorities required by law are present. At first call, at least one-half of shares must be represented; at second call, more than one-third of shares must be represented; and, for a single or third call, at least one-fifth of shares must be represented. Resolutions are adopted when at least two-thirds of votes represented at the meeting are in favor.


Read more
Close

Board of Directors

The Board of Directors is vested with the broadest powers for the ordinary and extraordinary management of the Company. It guides the Group’s activities through definition of a model of delegation and the direct delegation and revocation of powers, as well as review, approval and continuous monitoring of: the strategic, industrial, and financial plans formulated by directors with executive powers; the organizational structure of the Group; transactions having a material impact on the earnings and financial position of the Group; transactions in which the executive directors have a conflict of interest; and, transactions with related parties that are subject to its approval pursuant to the relevant procedures.

Based on the recommendations of the Internal Control and Risk Committee, the Board also sets guidelines for the system of internal control and risk management aimed at identifying, measuring, managing and monitoring the principal risks to which the Company and its subsidiaries are exposed, determining the level of acceptable risk consistent with its strategic objectives.
The Board of Directors is also responsible for: evaluating the adequacy of the organizational, administrative, and accounting structure; the system of risk management and internal control; and the general performance of the Group on the basis of reports from the executive directors, as well as for supervising effective compliance with the administrative and accounting procedures and the adequacy of the powers and resources attributed to the manager responsible for the Company’s financial reporting.
Article 15 of the By-laws authorizes the Board of Directors to adopt resolutions relating to mergers and demergers (where specifically permitted by law), transfer of the Company’s registered office to another location in Italy and establishment or closure of branch offices, designation of directors empowered to represent the Company, reductions in share capital where shareholders exercise the right of withdrawal and amendment of the By-laws to reflect changes in the law.
The Board of Directors includes the executive directors – who are responsible for management of the Company within the limits of the powers delegated to them by the Board – as well as the Internal Control and Risk Committee, the Nominating, Corporate Governance and Sustainability Committee, and the Compensation Committee, each of which has both propositive and advisory roles.
The current members of the Board of Directors were elected by Shareholders on 4 April 2012 for a three-year term – which expires on the date of the General Meeting called for approval of the 2014 financial statements – and they may be re-elected. It is a provision of the By-laws (Article 11) that no individual 75 years of age or more may be appointed as a director. In addition, directors are also subject to the provisions of law relating to ineligibility and termination.
Directors 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. Any list for which the votes received are less than half the percentage required for submission are excluded from consideration. Each list must include at least one candidate that satisfies the legal requirements for independence, in addition to those set out in the corporate governance code adhered to by the Company.
The appointment, replacement or termination of directors or the revocation or lapsing of their mandate are subject to the requirements of law.
In consideration of the Group’s increased concentration on the automobiles business following the demerger of the capital goods activities to Fiat Industrial, at the General Meeting of 4 April 2012 Shareholders voted – at the recommendation of the Board – to set the number of board members at nine and, on the basis of the lists presented by both the majority shareholder and minority shareholders, also elected two women to the Board.
Pursuant to Article 12 of the By-laws, after consultation with the Board of Statutory Auditors, the Board of Directors shall appoint one or more managers responsible for the Company’s financial reporting. If more than one manager is attributed that responsibility, it is to be carried out jointly and with joint responsibility. It is a requirement that the individual(s) appointed have several years of accounting and financial experience within a large company. In implementation of that provision, the Board of Directors appointed the Chief Financial Officer as the manager responsible for the Company’s financial reporting, vesting him with the relevant powers.


Read more
Close

Board of Statutory Auditors

The Board of Statutory Auditors is responsible for supervising compliance with law and the By-laws, respect of the principles of proper management and, in particular, the adequacy of the internal control and risk management system and the organizational, administrative, and accounting structure of the Company and its effective functioning, in addition to supervising effective implementation of the rules of corporate governance to which the Company adheres. It is also the role of the Statutory Auditors to express an opinion to Shareholders in relation to the appointment, removal and compensation of the independent auditors.

In relation to their activities, the Statutory Auditors may request that the Internal Audit function conduct audits of specific operational areas and corporate transactions.
In addition, Legislative Decree 39/2010 attributes the Board of Statutory Auditors the role of committee for internal control and audit with specific responsibility for overseeing: the financial reporting process; the effectiveness of the internal control, internal audit and risk management systems; the audit of the annual separate and consolidated financial statements; and the independence of the audit firm. The Statutory Auditors are also responsible for evaluating the proposals and work plans of the independent auditors, in addition to the content of their reports and any letters of recommendation.
The members of the Board of Statutory Auditors were elected by Shareholders on 4 April 2012. Their three-year term expires on the date of the General Meeting called for approval of the 2014 financial statements and they may be re-elected. Each member of the Board of Statutory Auditors must satisfy the requirements of integrity and independence established by law. Article 17 of the By-laws requires that all statutory auditors be entered in the Register of Auditors and possess at least three years of experience as a statutory account auditor.
Candidates may be nominated by shareholders who, individually or together with others, hold shares representing a minimum equity interest equal to the percentage established by Consob with reference to the Company’s market capitalization in the fourth quarter of the last financial year of their mandate.
The statutory auditor elected by minority shareholders serves as the Chairman of the Board of Statutory Auditors. In the event of substitution of a statutory auditor, the first alternate auditor appearing on the same list as the auditor being substituted is to serve the remaining term of office, subject to confirmation that he continues to satisfy the requirements of the position. In the event the auditor being substituted is Chairman, that office will also be assumed by his substitute.


Read more
Close

Independent Audits

As required by law, accounting audits are performed by independent auditors entered in the official register. Based on the recommendation of the Statutory Auditors, Shareholders voted on 30 March 2011 to appoint Reconta Ernst & Young S.p.A. as the Company’s independent auditors, as provided by law, for a period of nine years (1 January 2012 – 31 December 2020).

On 4 April 2012, Shareholders voted (based on the recommendation of the Statutory Auditors) to approve an increase in the originally agreed auditors fees for the nine-year period 2012-2020, as proposed by Reconta Ernst & Young S.p.A. in its letter dated 10 February 2012. The motivation for the upward revision in fees was the significant increase in work required in relation to the audit of the Group’s consolidated financial statements resulting from the acquisition of control of Chrysler Group LLC during 2011 and the consequent inclusion of Chrysler in the audit plan. The revision took into account the fact that, for 2012, the Chrysler consolidated financial statements would be audited by Deloitte & Touche.


Read more
Close

Nominating and Corporate Governance Committee

In recognition of the importance of integrating economic choices with those of a social and environmental nature, in 2009 Fiat S.p.A. assigned the Nominating and Corporate Governance Committee the additional responsibility of evaluating proposals relating to the strategic focus on sustainability, as well as reviewing the annual Sustainability Report. At the same time, the name of the Committee was changed to Nominating, Corporate Governance and Sustainability Committee.

The Committee is composed of the following three directors, two of whom are independent: John Elkann (Chairman), Joyce Victoria Bigio and Patience Wheatcroft.
The Committee’s Charter sets out minimum requirements for the Committee’s composition, functioning and main advisory functions, which are as follows:

  • at the time of co-opting or renewal of mandates, selecting and proposing nominees to the Board of Directors, indicating the specific individual and/or the qualifications required
  • formulating recommendations regarding the size and composition of the Board, and the appropriate professional and managerial profile of board members
  • evaluating, on an annual basis, the activities carried out by the Board of Directors and its Committees
  • examining proposals from the Chief Executive Officer concerning appointment and succession for members of the Group Executive Council and executives with strategic responsibilities
  • providing periodic updates to the Board of Directors on changes in corporate governance practice and regulation and, where appropriate, making proposals for changes to the governance model
  • evaluating proposals relating to the strategic focus on sustainability and, where necessary, presenting recommendations to the Board of Directors, as well as reviewing the annual Sustainability Report

The Committee may also utilize external consultants at the Company’s expense.
The Committee met once during 2012 (February 22nd) to formulate its recommendations, in view of the expiry of the Board’s term of office, on the size and composition of the Board, as well as the appropriate combination of skills and professional experience.
On 19 February 2013, the Nominating, Corporate Governance and Sustainability Committee examined the Report on Corporate Governance and the Sustainability Report.


Read more
Close

Compensation Committee

The Committee is composed of three independent directors: René Carron (Chairman), Gian Maria Gros-Pietro and Patience Wheatcroft.
The Committee’s Charter – amended on 22 February 2012 to reflect the recommendations of the 2011 Corporate Governance Code – sets out minimum requirements for the Committee’s composition, functioning, and main advisory functions, which include:

  • presenting proposals to the Board in relation to compensation policies for directors and executives with strategic responsibilities
  • presenting proposals to the Board in relation to individual compensation plans for the Chairman, Chief Executive Officer and other directors with specific responsibilities, as well as in relation to the establishment of performance targets for their variable compensation and, on an annual basis, verifying the level of achievement
  • examining proposals from the Chief Executive Officer concerning compensation and performance evaluations for executives with strategic responsibilities
  • periodically evaluating the adequacy, overall coherence and concrete application of compensation policies for directors and, on the basis of information provided by the Chief Executive Officer, for executives with strategic responsibilities
  • carrying out the functions of the committee for transactions with related parties, where related to compensation
  • examining specific issues relating to compensation when requested by the Board and providing recommendations.

With adoption of the procedures for transactions with related parties pursuant to Consob Regulation 17221 of 12 March 2010 (as amended), the Compensation Committee was assigned responsibility, for matters relating to compensation only, for reviewing transactions with related parties.
Accordingly, the Committee is required to give an opinion on the substantial and procedural fairness of transactions with related parties of particular significance, as defined in those procedures.


Read more
Close

Internal Control Committee

In 1993, Fiat adopted a Code of Ethics and, in May 1999, an Internal Control System based on a model derived from the COSO Report. The Board of Directors then decided to disseminate an “Internal Control Policies and Procedures” document and establish an Internal Control Committee.

In early 2012, following the amendments introduced by the Corporate Governance Code of December 2011, the Board changed the name of the Committee to Internal Control and Risk Committee and redefined its duties and responsibilities under the new charter which replaces the version approved in 2005.
The Internal Control and Risk Committee is composed entirely of independent directors and its role is to support the evaluation and decision-making process of the Board of Directors by providing advice and proposals in relation to the System of Internal Control and Risk Management and periodic financial reporting.
In particular, the Committee is responsible for:

  • assisting the Board in defining and updating guidelines for the System
  • evaluating – in collaboration with the manager responsible for the Company’s financial reporting and after consultation with the independent auditors and Board of Statutory Auditors – correct application of the accounting principles adopted and consistency with the principles applied for the consolidated financial statements
  • making recommendations on specific aspects relating to identification, measurement, management and monitoring of the principal corporate risks, in addition to defining the nature and acceptable level of risk consistent with the Company’s strategic objectives
  • reviewing periodic reports providing an evaluation of the System of Internal Control and Risk Management and other reports of particular significance from Internal Audit
  • monitoring the independence, adequacy, efficiency and effectiveness of Internal Audit, including with reference to Legislative Decree 231/2001 on corporate liability
  • reviewing, in consultation with the Board of Statutory Auditors, findings submitted by the independent auditors in their report and letter of recommendations
  • reporting to the Board of Directors, at least every six months (on the occasion of the approval of the annual and half-year financial report), on the activities carried out, as well as on the adequacy of the System of Internal Control and Risk Management
  • reviewing, with the support of the head of Internal Audit, whistleblowing reports received for the purpose of monitoring the adequacy of the System of Internal Control and Risk Management
  • reviewing the work plan prepared by the head of Internal Audit
  • carrying out the functions of the committee for transactions with related parties, except where related to compensation.

The Committee may request that Internal Audit perform audits of specific operational areas, at the same time informing the Chairman of the Board of Statutory Auditors that such request has been made.
The Committee is entitled to access company information and functions necessary to its activities and to utilize external consultants, in accordance with the procedures established by the Board of Directors. The Company shall make adequate financial resources available to the Committee to carry out its role, within the limits approved by the Board.
The head of Internal Audit makes available to the Committee, at its request, specialist personnel and retains, at the Company’s expense and at the instruction of the Committee, independent consultants selected by the Committee to assist on matters relating to its activities.
The Internal Control and Risk Committee has been assigned responsibility for transactions with related parties, except for matters relating to compensation, which as noted above are the responsibility of the Compensation Committee.
Meetings of the Committee are called by the Chairman whenever he deems appropriate and, in any event, at least every six months. The Chairman of the Board of Statutory Auditors, or other Statutory Auditor designated by him, shall attend meetings of the Committee. The other Statutory Auditors may also attend the meetings, as may – at the invitation of the Committee Chairman and in relation to specific items on the agenda – other individuals, including Directors that are not members of the Committee and company personnel.
The Committee is composed of three independent directors: Gian Maria Gros-Pietro (Chairman), Joyce Victoria Bigio and René Carron. All three individuals have significant experience in finance and accounting or risk management. During 2012, the Committee held eight meetings during which it focused in particular on analyzing the principles and criteria in the Corporate Governance Code that have been amended or revised and supporting the Board of Directors in formulating the Guidelines for the Internal Control and Risk Management System.
In addition, the Committee also undertook an analysis of the quarterly and annual results and related comments from the independent auditors; the work plans of both the independent and internal auditors; review of the proposal concerning a fee increase for the independent auditors for the nine-year period 2012-2020; and verification of the adequacy of the System of Internal Control and Risk Management, including a specific assessment of accounting processes and procedures for preparation of the consolidated and parent company financial statements and other communications of a financial nature, as well as related-party transactions.
During the first two months of 2013, the Committee met three times and its activities focused, in particular, on review of the full-year and fourth quarter results for 2012 and examination of the valuation of certain items in the consolidated financial statements with particular emphasis on impairment tests conducted


Read more
Close

Board of Directors

Control and Risk Committee

Compensation Commitee

Indipendent auditors

Board of Statutory

Nominating, Corporate Governance
and Committee

General Meetings

General Meetings

General meetings General meetings are the mechanism through which all shareholders are represented. At ordinary general meetings, Shareholders vote on approval of the annual financial statements, appointment and dismissal of members of the Board of Directors, appointment of members of the Board of Statutory Auditors and its Chairman, compensation of the Directors and Statutory Auditors, engagement of the independent auditors, and actions relating to the obligations of the Directors and Statutory Auditors.

At extraordinary general meetings, Shareholders vote on amendments to the By-laws and transactions of an extraordinary nature such as capital increases, mergers and demergers, except where decision-making authority is attributed to the Board of Directors under Article 15 of the By-laws, as indicated above. As required under Article 123-ter of Legislative Decree 58/98, Shareholders are also asked to give a non-binding vote on the Compensation Policy, which forms the first section of the Compensation Report.
Pursuant to Article 8 of the By-laws, holders of voting rights are entitled to attend, or be represented at, general meetings, provided that the appropriate certification from an authorized intermediary is communicated to the Company in accordance with the applicable law. For each general meeting, the Company may designate one or more representatives that holders of voting rights can designate as their proxy and instruct to vote on one or more motions on the agenda. Details of the designated representative(s) and the procedure and deadline for conferring proxy are provided in the notice calling the meeting. For the General Meeting to be held 9 April 2013 (single call), the Company has designated Servizio Titoli S.p.A.
An ordinary general meeting is considered regularly convened and any resolutions adopted valid when the majorities required by law are present (at first call, at least one-half of shares must be represented and resolutions are adopted by an absolute majority; at a single or second call, any portion of shares may be represented and resolutions are adopted by an absolute majority). For elections of Directors and Statutory Auditors, a relative majority is sufficient.
An extraordinary general meeting is considered regularly convened and resolutions adopted valid when the majorities required by law are present. At first call, at least one-half of shares must be represented; at second call, more than one-third of shares must be represented; and, for a single or third call, at least one-fifth of shares must be represented. Resolutions are adopted when at least two-thirds of votes represented at the meeting are in favor.


Read more
Close

Board of Directors

The Board of Directors is vested with the broadest powers for the ordinary and extraordinary management of the Company. It guides the Group’s activities through definition of a model of delegation and the direct delegation and revocation of powers, as well as review, approval and continuous monitoring of: the strategic, industrial, and financial plans formulated by directors with executive powers; the organizational structure of the Group; transactions having a material impact on the earnings and financial position of the Group; transactions in which the executive directors have a conflict of interest; and, transactions with related parties that are subject to its approval pursuant to the relevant procedures.

Based on the recommendations of the Internal Control and Risk Committee, the Board also sets guidelines for the system of internal control and risk management aimed at identifying, measuring, managing and monitoring the principal risks to which the Company and its subsidiaries are exposed, determining the level of acceptable risk consistent with its strategic objectives.
The Board of Directors is also responsible for: evaluating the adequacy of the organizational, administrative, and accounting structure; the system of risk management and internal control; and the general performance of the Group on the basis of reports from the executive directors, as well as for supervising effective compliance with the administrative and accounting procedures and the adequacy of the powers and resources attributed to the manager responsible for the Company’s financial reporting.
Article 15 of the By-laws authorizes the Board of Directors to adopt resolutions relating to mergers and demergers (where specifically permitted by law), transfer of the Company’s registered office to another location in Italy and establishment or closure of branch offices, designation of directors empowered to represent the Company, reductions in share capital where shareholders exercise the right of withdrawal and amendment of the By-laws to reflect changes in the law.
The Board of Directors includes the executive directors – who are responsible for management of the Company within the limits of the powers delegated to them by the Board – as well as the Internal Control and Risk Committee, the Nominating, Corporate Governance and Sustainability Committee, and the Compensation Committee, each of which has both propositive and advisory roles.
The current members of the Board of Directors were elected by Shareholders on 4 April 2012 for a three-year term – which expires on the date of the General Meeting called for approval of the 2014 financial statements – and they may be re-elected. It is a provision of the By-laws (Article 11) that no individual 75 years of age or more may be appointed as a director. In addition, directors are also subject to the provisions of law relating to ineligibility and termination.
Directors 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. Any list for which the votes received are less than half the percentage required for submission are excluded from consideration. Each list must include at least one candidate that satisfies the legal requirements for independence, in addition to those set out in the corporate governance code adhered to by the Company.
The appointment, replacement or termination of directors or the revocation or lapsing of their mandate are subject to the requirements of law.
In consideration of the Group’s increased concentration on the automobiles business following the demerger of the capital goods activities to Fiat Industrial, at the General Meeting of 4 April 2012 Shareholders voted – at the recommendation of the Board – to set the number of board members at nine and, on the basis of the lists presented by both the majority shareholder and minority shareholders, also elected two women to the Board.
Pursuant to Article 12 of the By-laws, after consultation with the Board of Statutory Auditors, the Board of Directors shall appoint one or more managers responsible for the Company’s financial reporting. If more than one manager is attributed that responsibility, it is to be carried out jointly and with joint responsibility. It is a requirement that the individual(s) appointed have several years of accounting and financial experience within a large company. In implementation of that provision, the Board of Directors appointed the Chief Financial Officer as the manager responsible for the Company’s financial reporting, vesting him with the relevant powers.


Read more
Close

Board of Statutory Auditors

The Board of Statutory Auditors is responsible for supervising compliance with law and the By-laws, respect of the principles of proper management and, in particular, the adequacy of the internal control and risk management system and the organizational, administrative, and accounting structure of the Company and its effective functioning, in addition to supervising effective implementation of the rules of corporate governance to which the Company adheres. It is also the role of the Statutory Auditors to express an opinion to Shareholders in relation to the appointment, removal and compensation of the independent auditors.

In relation to their activities, the Statutory Auditors may request that the Internal Audit function conduct audits of specific operational areas and corporate transactions.
In addition, Legislative Decree 39/2010 attributes the Board of Statutory Auditors the role of committee for internal control and audit with specific responsibility for overseeing: the financial reporting process; the effectiveness of the internal control, internal audit and risk management systems; the audit of the annual separate and consolidated financial statements; and the independence of the audit firm. The Statutory Auditors are also responsible for evaluating the proposals and work plans of the independent auditors, in addition to the content of their reports and any letters of recommendation.
The members of the Board of Statutory Auditors were elected by Shareholders on 4 April 2012. Their three-year term expires on the date of the General Meeting called for approval of the 2014 financial statements and they may be re-elected. Each member of the Board of Statutory Auditors must satisfy the requirements of integrity and independence established by law. Article 17 of the By-laws requires that all statutory auditors be entered in the Register of Auditors and possess at least three years of experience as a statutory account auditor.
Candidates may be nominated by shareholders who, individually or together with others, hold shares representing a minimum equity interest equal to the percentage established by Consob with reference to the Company’s market capitalization in the fourth quarter of the last financial year of their mandate.
The statutory auditor elected by minority shareholders serves as the Chairman of the Board of Statutory Auditors. In the event of substitution of a statutory auditor, the first alternate auditor appearing on the same list as the auditor being substituted is to serve the remaining term of office, subject to confirmation that he continues to satisfy the requirements of the position. In the event the auditor being substituted is Chairman, that office will also be assumed by his substitute.


Read more
Close

Independent Audits

As required by law, accounting audits are performed by independent auditors entered in the official register. Based on the recommendation of the Statutory Auditors, Shareholders voted on 30 March 2011 to appoint Reconta Ernst & Young S.p.A. as the Company’s independent auditors, as provided by law, for a period of nine years (1 January 2012 – 31 December 2020).

On 4 April 2012, Shareholders voted (based on the recommendation of the Statutory Auditors) to approve an increase in the originally agreed auditors fees for the nine-year period 2012-2020, as proposed by Reconta Ernst & Young S.p.A. in its letter dated 10 February 2012. The motivation for the upward revision in fees was the significant increase in work required in relation to the audit of the Group’s consolidated financial statements resulting from the acquisition of control of Chrysler Group LLC during 2011 and the consequent inclusion of Chrysler in the audit plan. The revision took into account the fact that, for 2012, the Chrysler consolidated financial statements would be audited by Deloitte & Touche.


Read more
Close

Nominating and Corporate Governance Committee

In recognition of the importance of integrating economic choices with those of a social and environmental nature, in 2009 Fiat S.p.A. assigned the Nominating and Corporate Governance Committee the additional responsibility of evaluating proposals relating to the strategic focus on sustainability, as well as reviewing the annual Sustainability Report. At the same time, the name of the Committee was changed to Nominating, Corporate Governance and Sustainability Committee.

The Committee is composed of the following three directors, two of whom are independent: John Elkann (Chairman), Joyce Victoria Bigio and Patience Wheatcroft.
The Committee’s Charter sets out minimum requirements for the Committee’s composition, functioning and main advisory functions, which are as follows:

  • at the time of co-opting or renewal of mandates, selecting and proposing nominees to the Board of Directors, indicating the specific individual and/or the qualifications required
  • formulating recommendations regarding the size and composition of the Board, and the appropriate professional and managerial profile of board members
  • evaluating, on an annual basis, the activities carried out by the Board of Directors and its Committees
  • examining proposals from the Chief Executive Officer concerning appointment and succession for members of the Group Executive Council and executives with strategic responsibilities
  • providing periodic updates to the Board of Directors on changes in corporate governance practice and regulation and, where appropriate, making proposals for changes to the governance model
  • evaluating proposals relating to the strategic focus on sustainability and, where necessary, presenting recommendations to the Board of Directors, as well as reviewing the annual Sustainability Report

The Committee may also utilize external consultants at the Company’s expense.
The Committee met once during 2012 (February 22nd) to formulate its recommendations, in view of the expiry of the Board’s term of office, on the size and composition of the Board, as well as the appropriate combination of skills and professional experience.
On 19 February 2013, the Nominating, Corporate Governance and Sustainability Committee examined the Report on Corporate Governance and the Sustainability Report.


Read more
Close

Compensation Committee

The Committee is composed of three independent directors: René Carron (Chairman), Gian Maria Gros-Pietro and Patience Wheatcroft.
The Committee’s Charter – amended on 22 February 2012 to reflect the recommendations of the 2011 Corporate Governance Code – sets out minimum requirements for the Committee’s composition, functioning, and main advisory functions, which include:

  • presenting proposals to the Board in relation to compensation policies for directors and executives with strategic responsibilities
  • presenting proposals to the Board in relation to individual compensation plans for the Chairman, Chief Executive Officer and other directors with specific responsibilities, as well as in relation to the establishment of performance targets for their variable compensation and, on an annual basis, verifying the level of achievement
  • examining proposals from the Chief Executive Officer concerning compensation and performance evaluations for executives with strategic responsibilities
  • periodically evaluating the adequacy, overall coherence and concrete application of compensation policies for directors and, on the basis of information provided by the Chief Executive Officer, for executives with strategic responsibilities
  • carrying out the functions of the committee for transactions with related parties, where related to compensation
  • examining specific issues relating to compensation when requested by the Board and providing recommendations.

With adoption of the procedures for transactions with related parties pursuant to Consob Regulation 17221 of 12 March 2010 (as amended), the Compensation Committee was assigned responsibility, for matters relating to compensation only, for reviewing transactions with related parties.
Accordingly, the Committee is required to give an opinion on the substantial and procedural fairness of transactions with related parties of particular significance, as defined in those procedures.


Read more
Close

Internal Control Committee

In 1993, Fiat adopted a Code of Ethics and, in May 1999, an Internal Control System based on a model derived from the COSO Report. The Board of Directors then decided to disseminate an “Internal Control Policies and Procedures” document and establish an Internal Control Committee.

In early 2012, following the amendments introduced by the Corporate Governance Code of December 2011, the Board changed the name of the Committee to Internal Control and Risk Committee and redefined its duties and responsibilities under the new charter which replaces the version approved in 2005.
The Internal Control and Risk Committee is composed entirely of independent directors and its role is to support the evaluation and decision-making process of the Board of Directors by providing advice and proposals in relation to the System of Internal Control and Risk Management and periodic financial reporting.
In particular, the Committee is responsible for:

  • assisting the Board in defining and updating guidelines for the System
  • evaluating – in collaboration with the manager responsible for the Company’s financial reporting and after consultation with the independent auditors and Board of Statutory Auditors – correct application of the accounting principles adopted and consistency with the principles applied for the consolidated financial statements
  • making recommendations on specific aspects relating to identification, measurement, management and monitoring of the principal corporate risks, in addition to defining the nature and acceptable level of risk consistent with the Company’s strategic objectives
  • reviewing periodic reports providing an evaluation of the System of Internal Control and Risk Management and other reports of particular significance from Internal Audit
  • monitoring the independence, adequacy, efficiency and effectiveness of Internal Audit, including with reference to Legislative Decree 231/2001 on corporate liability
  • reviewing, in consultation with the Board of Statutory Auditors, findings submitted by the independent auditors in their report and letter of recommendations
  • reporting to the Board of Directors, at least every six months (on the occasion of the approval of the annual and half-year financial report), on the activities carried out, as well as on the adequacy of the System of Internal Control and Risk Management
  • reviewing, with the support of the head of Internal Audit, whistleblowing reports received for the purpose of monitoring the adequacy of the System of Internal Control and Risk Management
  • reviewing the work plan prepared by the head of Internal Audit
  • carrying out the functions of the committee for transactions with related parties, except where related to compensation.

The Committee may request that Internal Audit perform audits of specific operational areas, at the same time informing the Chairman of the Board of Statutory Auditors that such request has been made.
The Committee is entitled to access company information and functions necessary to its activities and to utilize external consultants, in accordance with the procedures established by the Board of Directors. The Company shall make adequate financial resources available to the Committee to carry out its role, within the limits approved by the Board.
The head of Internal Audit makes available to the Committee, at its request, specialist personnel and retains, at the Company’s expense and at the instruction of the Committee, independent consultants selected by the Committee to assist on matters relating to its activities.
The Internal Control and Risk Committee has been assigned responsibility for transactions with related parties, except for matters relating to compensation, which as noted above are the responsibility of the Compensation Committee.
Meetings of the Committee are called by the Chairman whenever he deems appropriate and, in any event, at least every six months. The Chairman of the Board of Statutory Auditors, or other Statutory Auditor designated by him, shall attend meetings of the Committee. The other Statutory Auditors may also attend the meetings, as may – at the invitation of the Committee Chairman and in relation to specific items on the agenda – other individuals, including Directors that are not members of the Committee and company personnel.
The Committee is composed of three independent directors: Gian Maria Gros-Pietro (Chairman), Joyce Victoria Bigio and René Carron. All three individuals have significant experience in finance and accounting or risk management. During 2012, the Committee held eight meetings during which it focused in particular on analyzing the principles and criteria in the Corporate Governance Code that have been amended or revised and supporting the Board of Directors in formulating the Guidelines for the Internal Control and Risk Management System.
In addition, the Committee also undertook an analysis of the quarterly and annual results and related comments from the independent auditors; the work plans of both the independent and internal auditors; review of the proposal concerning a fee increase for the independent auditors for the nine-year period 2012-2020; and verification of the adequacy of the System of Internal Control and Risk Management, including a specific assessment of accounting processes and procedures for preparation of the consolidated and parent company financial statements and other communications of a financial nature, as well as related-party transactions.
During the first two months of 2013, the Committee met three times and its activities focused, in particular, on review of the full-year and fourth quarter results for 2012 and examination of the valuation of certain items in the consolidated financial statements with particular emphasis on impairment tests conducted


Read more
Close

Fiat SpA | Legal Notes | Privacy | Contacts | Accessibility | FAQs | Glossary | General Archive   ©2011 FIAT S.p.A. - P.IVA 00469580013