Registration document 2007 - Total.com

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