LISI FINANCIALREPORT2013 I
127
DOCUMENTSSPECIFICTOTHEANNUALGENERALMEETING
8
Meetings on the subject of compensation are accompanied by a
presentation by the Compensation Committee. Such Committee met
twice in2013,withanattendancerateof67%of itsmembers.
Meetingsdealingwithstrategicissuesareaccompaniedbyapresentation
by theStrategicCommittee. SuchCommitteemetonce in2013,withan
attendancerateof100%of itsmembers.
1.1.5Decision-makingprocess
There has been no addition to the Board's decision-making process
during fiscal 2013, the specific rules of such process being described in
Chapter7oftheAnnualReport.
1.1.6Boardassessment
In accordance with the practices recommended in the AFEP-MEDEF
Code, the Board conducted a self assessment to ensure it meets the
expectations of shareholders that have appointed it to manage the
company. This assessmentwasmade for theyears 2011 and2012based
on a survey completed by each director that showed several areas of
improvement that were eventually addressed. For the year 2013, an
initiative to improve governance of the Company, in particular the
operation of the Board and compliance thereof with the Code AFEP-
MEDEFCorporateGovernanceCode,wasconductedwith theassistance
ofanoutsideconsultant.
1.2
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LIMITATIONOFTHEAUTHORITY
OFTHEGENERALMANAGEMENT
The General Management has the broadest powers to manage the
Companywithin the limits of those conferredby lawand thebylaws to
theBoardofDirectors.
1.3
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MANAGEMENTSTRUCTURE
By a decisionof the Boardof Directors dated February 19, 2009, it was
agreed that the functions of Chairman and Chief Executive Officer
would not be separated andwould be performed byMr. Gilles Kohler.
The presence of directors, majority or independent shareholders, as
well as a referent director, has enabled the Board to consider that
such combination of the offices of Chairman and Chief Executive
Officer remained consistent with the protection of the interests of
all shareholders, especially minority shareholders, and suited to the
company's lineofbusiness.
TheChairmanandChiefExecutiveOfficerrelyupon:
1)AManagementCommitteeof7peoplewhichmeetsmonthlytoreview
major issuesaddressedbytheGroup,
2)An Executive Committee comprising the managers of the divisions
and internal audit, a total of 14peoplewhomeetquarterly tomakea
progressupdateonthemainareas for improvement.
1.4
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COMPENSATIONANDBENEFITS INKIND
The principles and rules governing corporate officers’ compensation,
whichare submittedand suggested to theBoardby theCompensation
Committee each year, are detailed in Chapter 7 of the Annual Report,
which deals with the corporate governance policy. It describes in
particular the information referred to in Article L.225-100-3 of the
CommercialCodeandtablesprescribedbytheAFEP/MEDEFcode.
1.5
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INTERNALAUDITPROCEDURES
The LISI Group’s current internal audit procedures fall form part of its
corporategovernancepolicy as drawnup in accordancewith the latest
French financialmarketsauthority (AMF)guidelines for small-andmid-
capsbusinesses.
The various rules put inplace for theproper functioningof the internal
audit system are described in Chapter 7 of the Annual Report. This
report provides the definition of internal audit within the LISI Group
and introduces all the diligence procedures carried out in 2013 by the
departmentsconcerned.
1.5.1Definitionoftheinternalaudit
The Group’s current internal audit procedures are designed to ensure
that:
n
Administrative actions or those implementing operations at all
managementunit levels, arecarriedout inaccordancewithapplicable
laws and regulations, and within the scope of the values set by the
Group;
n
These actions fall within the scope of the orientations andobjectives
definedbytheGroup'sGeneralManagement.
n
Allaccountingand financialdata reflectexhaustivelyandhonestly the
economicsituationofeachoftheGroup'sentities.
It should also be recalled that the Audit Committee's main task is to
conductareviewoftheaccounts,toensuretherelevanceandconsistency
of accountingpoliciesand tomonitor theeffectivenessof internal audit
andriskmanagementsystems.
In this context, the Group has implemented a process for detecting
and preventing risks of all kinds based on coordinated action by the
Internal AuditManager and theexternal auditors. During the reviewof
the internal audit systems, at leastonceayear throughout thedivisions,
this process is formalized and relayed to each division through the
deploymentof localauditors.
