Corporate Governance at EADS
2006 has been a critical year for EADS. The Board has taken action to address the root causes of the defi ciencies that have surfaced and made wide-ranging decisions to improve the governance model.
Applicable Rules
EADS N.V. is a Dutch company governed by the laws of The Netherlands – in particular, by Book 2 of the Dutch Civil Code – and by its Articles of Association. Since its shares are listed in France, Germany and Spain, it is also subject to various regulations which are set out in more detail in the Financial Statements and Corporate Governance – 2006 document, part of the EADS Annual Report 2006.
It should be noted that some specific and national company law regulations (such as the French ‘loi NRE’ on corporate governance) are not applicable to EADS; nevertheless, the rules governing the proceedings of the Board, initially adopted by the Board in July 2000 were amended during the Board meeting held on 5th December 2003 to reflect the decision of the Board with respect to the enhancements in Corporate Governance as described below. In addition, EADS’ previously existing Insider Trading Rules have been reinforced, building on the recent changes in the laws applicable to the Company in The Netherlands and in each country where EADS is listed.
The Board of Directors
The Board of Directors met ten times during 2006 and was regularly informed of developments through business reports from the Chief Executive Officers, including rolling forecasts as well as strategic and operational plans. The average attendance rate at such meetings was 95%.
The Audit Committee
The Audit Committee set up by the Board in 2000 from among its members was, in 2006, chaired by Manfred Bischoff and Arnaud Lagardère and also included Rüdiger Grube. It met five times during 2006, to review the 2005 results as well as the first half-year results for 2006 of the Company, together with the quarterly financial reviews. As decided by the Board of Directors on 5th December 2003, the role of the Audit Committee was increased with new tasks such as, in particular, the review of the quarterly financial reports.
The Remuneration and Nomination Committee
The Remuneration and Nomination Committee, formerly the Personnel Committee, was also set up by the Board in 2000 from among its members. In 2006, the Remuneration and Nomination Committee was chaired by Manfred Bischoff and Arnaud Lagardère and also included Thomas Enders, Louis Gallois and Rüdiger Grube. It met five times during 2006. On top of making recommendations to the Board of Directors for major appointments within the Group, the Remuneration and Nomination Committee reviewed the compensation policy (including pension schemes), the new Executive Committee members remunerations, the bonus payments for 2005, the long-term incentive plan and the employee share ownership plan for 2006/07, as well as the remuneration review of the members of the Executive Committee for 2006.
In late 2006, the Board has commissioned an independent and internationally reputable consulting firm to assist the Directors in the annual assessment of its performance.
For more detailed information about Corporate Governance at EADS, visit the section Board of Directors and Board committees or see the Financial Statements and Corporate Governance – 2006 document, part of the EADS Annual Report 2006.
