Registration document 2007 - Total.com
Registration document 2007 - Total.com
Registration document 2007 - Total.com
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5<br />
104<br />
Corporate Governance<br />
Report of the Chairman of the Board of Directors (Article L 225-37 of the French Commercial Code)<br />
Report of the Chairman of the Board of Directors<br />
(Article L 225-37 of the French Commercial Code)<br />
Pursuant to Article L 225-37 of the French Commercial Code, the<br />
following report presents information for the year 2006 related to<br />
the practices of the Board of Directors, internal control<br />
procedures implemented by the Company and, eventually, any<br />
limits set by the Board of Directors concerning the powers of the<br />
Chief Executive Officer.<br />
TOTAL actively examines corporate governance matters. In<br />
particular, the Group maintains a policy of transparency regarding<br />
the <strong>com</strong>pensation of and the allocation of stock options and<br />
restricted stock grants to its corporate officers.<br />
Directors are appointed by the shareholders for a three-year<br />
term. In case of the resignation or death of a director, the Board<br />
may temporarily appoint a replacement director. This<br />
appointment must be ratified by the next shareholders’ meeting.<br />
The terms of office of the members of the Board are staggered to<br />
more evenly space the renewal of appointments.<br />
In 1995, the Group established two special <strong>com</strong>mittees, the<br />
Nominating & Compensation Committee and the Audit<br />
Committee.<br />
In 2003, the Board of Directors amended the corporate<br />
governance policies initially adopted in 1995 and in 2001 to take<br />
into account recent developments in this area, including the<br />
AFEP-MEDEF report published in France in September 2002.<br />
In 2004, the Board of Directors adopted a code of ethics that, in<br />
the overall context of the Group’s Code of Conduct, applies to its<br />
Chief Executive Officer, Chief Financial Officer, Chief Accounting<br />
Officer and the financial and accounting officers for its principal<br />
activities. The Board has made the Audit Committee responsible<br />
for ensuring <strong>com</strong>pliance with this Code.<br />
At its meeting on February 18, 2004, the Board had designated<br />
Jacques Friedmann, Chairman of the Audit Committee and an<br />
independent Director, as Audit Committee financial expert.<br />
Mr. Friedmann served in this capacity until the end of his term of<br />
office as a director, on May 12, 2006. Mr. Antoine<br />
Jeancourt-Galignani, an independent director, has been<br />
designated to succeed Mr. Friedmann as Chairman of the Audit<br />
Committee and Audit Committee financial expert.<br />
At its meeting on July 19, 2005, the Board of Directors amended<br />
the Audit Committee’s charter to clarify its role in supervising the<br />
independent auditors and the criteria for the independence of its<br />
members. The Board also approved the Audit Committee’s<br />
procedures for <strong>com</strong>plaints or concerns regarding accounting,<br />
internal accounting controls or auditing matters.<br />
TOTAL – <strong>Registration</strong> Document 2006<br />
TOTAL’s corporate governance practices conform with those<br />
generally followed by <strong>com</strong>panies listed in France.<br />
The shareholders’ meeting held on May 14, 2004 appointed a<br />
Director, Mr. Daniel Boeuf, representing employee shareholders.<br />
Directors’ Charter<br />
The Directors’ Charter specifies the obligations of each director<br />
and sets forth the roles and working procedures of the Board of<br />
Directors.<br />
Each director undertakes to maintain the independence of his<br />
analysis, judgment, decision and action as well as not to be<br />
unduly influenced. When a director participates in and votes at<br />
Board meetings, he is required to represent the interest of the<br />
shareholders and the Company as a whole. Directors must<br />
actively participate in the affairs of the Board, specifically on the<br />
basis of information <strong>com</strong>municated to him by the Company. Each<br />
director must inform the Board of conflicts of interest that may<br />
arise, including the nature and terms of any proposed<br />
transactions that could give rise to such situations. If he is<br />
opposed to a project brought before the Board, he is required to<br />
clearly express his opposition. He is required to own at least<br />
1,000 <strong>com</strong>pany shares in registered form (with the exception of<br />
the director representing employee shareholders, for whom the<br />
requirements are more flexible) and <strong>com</strong>ply strictly with provisions<br />
regarding the use of material non-public information. The<br />
requirement to hold a minimum of 1,000 shares while in office is<br />
accepted by each Director as a restriction on his ability to freely<br />
dispose of these shares.<br />
In addition to stipulating that any shares and ADRs of<br />
TOTAL S.A. and its publicly traded subsidiaries held by directors<br />
are to be held in registered form, the Directors Charter prohibits<br />
buying on margin or short selling those same securities. It also<br />
prohibits trading shares of TOTAL S.A. on, and during the fifteen<br />
calendar days preceding, the dates of the Company’s periodic<br />
earnings announcements.<br />
The Board of Directors’ role is to determine the strategic vision<br />
for the Group and supervise the implementation of this vision.<br />
With the exception of the powers and authority expressly<br />
reserved for shareholders and within the limits of the Company’s<br />
legal purpose, the Board may address any issue related to the<br />
operation of the Company and take any decision concerning the<br />
matters falling within its purview.