The decision in 2007 to separate the duties of Chairman of the Board from those of Chief Executive Officer has proved the best solution given Sequana’s new organization. The transition was made smoothly, thanks to the complementary skills and experience of Tiberto Ruy Brandolini d’Adda and Pascal Lebard, and has provided Sequana with optimum visibility over its operational activities now that its two main subsidiaries are working more closely together, while safeguarding the quality of the Board’s work.

The Board of the 11 Directors which all terms of office will expire at the end of the Shareholders’ Meeting called to approve the financial statements for the year ending 31 December 2010. Five of the eleven directors (or representatives of legal entities which sit on the Board) are independent. Four directors are non-French. The average age of directors is 53.

These procedures, which were approved by the Board of Directors to incorporate best corporate governance practices, are designed to govern the rights and obligations of directors who are natural persons, or if directors are legal entities, their permanent representatives. In particular, they are intended to prevent potential conflicts of interest, and to define the rules under which the directors may trade in the Company’s shares along with the disclosure requirements for such operations.

To ensure that the Company’s corporate decision-making bodies work in an effective manner, the Board of Directors has also adopted a set of internal rules which define the precise role of the Board and the status of its members, and ensure that meetings and discussions are conducted in an optimal and effective manner. The Board has also set up special committees composed of directors to deal with matters that fall within the Board’s duties. These committees deliberate and submit their recommendations to the Board.

and, in particular, the measures put in place under the shareholder agreement entered into on 6 July 2007 by Exor SA and DLMD, details of which can be found on page 162. Under the agreement, based on a Board of ten members, four directors are put forward by Exor SA (including the Chairman), three directors are put forward by DLMD (including the Chief Executive Officer) and three independent directors are recommended by joint agreement between Exor SA and DLMD.

Most Board members have held directorships or executive management positions in other companies and acquired both corporate management skills in areas related to the Group’s businesses and sufficient financial expertise to enable them to deliberate clearly and independently on the Group’s financial statements, as well as on accounting compliance issues. Directors are considered “independent” if they have no direct or indirect relations of any nature with the Company, the Group or the Group’s management that could compromise their freedom to make independent decisions.

According to the jointly agreed criteria for assessing independence in the AFEP-MEDEF’s reports, the Board has five independent directors: Luc Argand, Jean-Pascal Beaufret, Laurent Mignon, Michel Taittinger and Allianz France.

Particular attention is paid to observing the freedom of judgment exercised by the directors on the Board and the Board’s committees.

• A duty of administration
  In addition to handling matters that fall within the scope of the powers ascribed to it by law or by regulations, the Board periodically makes decisions regarding the Group’s strategy, internal restructuring operations and important investment projects designed to generate organic growth.
• A duty of review
  In addition to the duties ascribed to it by law (reviewing and approving the Company’s financial statements), the Board deliberates on significant acquisitions or sales of equity interests and assets that do not fall within the scope of the strategy it has determined. It also votes on any transaction or commitment that is liable to materially affect the Group’s earnings or to result in a significant change in its balance sheet structure.
• A duty of caution
  The Board is kept informed on a regular basis, either directly or through its committees, of any significant event affecting the conduct of the Company’s business. It also has the right to obtain information at any time, including between meetings convened to review the financial statements, on any significant change in the Company’s financial condition, liquidity position and commitments.

It is also is responsible to the shareholders for ensuring that all of its activities are conducted in a transparent manner.

The Board of Directors meets at least four times a year and whenever the Company’s interests so require, to deliberate as a collegial body on the matters referred to it for approval. Except in those cases that are prohibited by law, directors who participate in Board meetings via videoconference or other technologies in accordance with the regulations in force are deemed to be present for purposes of quorum and majority requirements. The Board met on six occasions in 2009, with an attendance rate of 86%.

Its role is to review all matters relating to the composition, organization and modus operandi of the Board of Directors and its committees and to submit to the Board recommendations on compensation to be paid to executive managers and corporate officers, including the Chairman and the Chief Executive Officer.

The Nominations and Compensation Committee reviews stock option plans and any proposals for bonus share awards submitted by management.

The committee met twice in 2009 and both meetings were attended by all committee members.

Audit committee

It has five members, two of whom are independent, appointed for the entire term of their directorship: Alessandro Potestà (Chairman), DLMD represented by Nicolas Lebard, Allianz France represented by Pierluigi Riches, Pierre Martinet and Jean-Pascal Beaufret, a new independent director appointed to increase the committee’s independence and boost its financial expertise.

The committee focuses on five areas: verification of accounting principles; approval of half-yearly and annual parent company and consolidated financial statements; internal control; review of the Group’s financial condition and the risks to which it may be exposed; status of the Statutory Auditors (appointment, independence). It meets on a regular basis and may hear reports from the Group’s executive managers and their staff. It may also meet with the Statutory Auditors, with or without management being present.

The committee met three times in 2009, with an attendance rate of 87%. Both meetings were attended by members of executive management.

Strategy committee

The committee has five members, one of whom is independent, appointed for the entire term of their directorship: Tiberto Ruy Brandolini d’Adda (Chairman), Exor SA represented by Carlo Sant’Albano, Pascal Lebard, Pierre Martinet and Laurent Mignon.

The committee’s brief is to issue recommendations on the Group’s strategy while taking account of market trends and the potential risks to which the Group may be exposed. It reviews the best investment opportunities that fit with the strategy defined in this manner. It meets as often as needed at its Chairman’s discretion.

The committee met once in 2009 with all of its members present.