2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

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5CORPORATE GOVERNANCEChairman’s ReportIt made proposals concerning the method of determining theChairman and Chief Executive Officer’s fixed and performance-relatedcompensation for 2010 and allocating directors’ fees to members ofthe Board of Directors and Board Committees.It reviewed the Chairman’s report on corporate governance and theinformation on corporate governance contained in the managementreport.The Committee gave its opinion on the proposal to allocate sharegrants and stock options to Group employees.It made recommendations on renewing the specific annualauthorisations given to the Chairman and Chief Executive Officer.The Chairman of the Committee reported to the Board of Directorson the work carried out at each Committee meeting.The Committee uses outside research and comparative surveys, mainlycarried out by specialist firms, to assist it in some of its duties.• Procedures for determining Executive Offi cers’compensation and directors’ feesThe Chairman and Chief Executive Officer receives a fixed salary plusa performance-related bonus set annually on the recommendation ofthe Appointments and Compensation Committee, supported whereappropriate by market surveys conducted by outside consultants.His performance-related bonus for 2010 was contingent on theachievement of quantitative targets for the Company concerningsales and consolidated trading profit as well as net debt figures,consistent with those set for members of the Executive Committee.The performance-related component can be up to 100% of his fixedsalary if targets are reached and up to 150% if they are exceeded.The Chairman and Chief Executive Officer has no entitlement tosupplementary pension benefits, termination benefits or non-competebenefits. He is a member of the mandatory group pension plans(ARCCO and AGIRC) and the death and disability plan covering allemployees within the company.The Chairman and Chief Executive Officer is not entitled to receivestock options or share grants from Casino, Guichard-Perrachon,companies it controls or companies that control it.The method of allocating the directors’ fees voted by shareholdersamong directors and members of the Board Committees wasdetermined by the Board of Directors on 3 December 2010 and wasunchanged from the previous year:■■■■■The total fee per director is set at €25,000, comprising a fixedfee of €8,500 and a variable fee based on their attendance rateat Board meetings, capped at €16,500. Variable fees not paid toabsent members are not reallocated.The individual fee for the Chairman and for directors representingthe majority shareholder is capped at €12,500. On his appointment,the Chairman of the Board of Directors waived the additional feeof €25,000 previously paid to the Chairman.An additional fee is paid to Antoine Guichard for the duties heperforms as Honorary Chairman in recognition of his attendanceat meetings and his continuing input to the Company.The non-voting director receives an identical fee to the otherdirectors, which is deducted from the total amount voted by theshareholders.Members of the Board Committees receive a fixed fee (€6,500) anda variable fee based on attendance (up to €13,500 for membersof the Audit Committee and up to €8,745 for members of theAppointments and Compensation Committee). Variable fees notpaid to absent members are not reallocated.• Information provided to the Board of DirectorsThe Chairman or Chief Executive Officer is responsible for providingall directors with the documents and information they need to fulfiltheir role and duties.Prior to each Board meeting, directors receive a set of documentscontaining the main information they require to prepare for the itemson the agenda.Senior Management provides the Board of Directors at least once aquarter with a status report on the business operations of the Companyand its main subsidiaries, including sales figures and results trends,as well as information on debt and credit lines and headcount datarelating to the Company and its main subsidiaries.The Board of Directors also reviews the Group’s off-balance sheetcommitments at least once every six months.The Chief Financial Officer and the Advisor to the Chairman who actsas Secretary to the Board attend all Board meetings. Other membersof the Executive Committee attend as and when necessary.• Assessment of the Board’s practicesand performanceIn accordance with the corporate governance code, the Board ofDirectors’ Charter provides for an annual debate on and regularassessment of the Board’s practices and performance, organisedand carried out by the Appointments and Compensation Committeewith the assistance of outside consultants if required.A new assessment will be conducted in the second half of 2011 bythe Appointments and Compensation Committee, either with theassistance of a specialised outside consultant or internally using aquestionnaire covering a set of issues selected in advance basedon market practices in the matter and adapted to Casino’s specificrequirements.The comments and observations made by the directors during thelast assessment revealed that the Board practices are fully satisfactorywith regard to business conduct and corporate governance principlesand that progress had been made since the previous assessment.Attendance at shareholders’ meetingsInformation on attendance at shareholders’ meeting is set out inarticles 25, 27 and 28 of the Company’s by-laws (see page 225).These articles will also be updated in an extraordinary resolution tobe put to the annual general meeting on 14 April 2011.Factors liable to have an influencein the event of a public offerInformation on the Company’s capital structure and significant director indirect interests in its share capital known by the Company byvirtue of articles L. 233-7 and L. 233-12 of the French CommercialCode (Code de commerce) is provided on pages 37 onwards.The by-laws contain no restrictions on voting rights or the transferof shares. There are no agreements known to the Company byvirtue of article L. 233-11 of the French Commercial Code (Code decommerce) that contain pre-emption rights with respect to the sale orpurchase of the Company’s shares. There are no known shareholders’agreements that could result in restrictions on the transfer of sharesand/or exercise of voting rights.The Company has not issued any securities conferring special controlrights. There are no employee share schemes where the voting rightsare not exercised directly by the employees.184 Casino Group | Registration Document 2010
CORPORATE GOVERNANCEChairman’s Report5The rules governing the appointment and replacement of Boardmembers and amendment of the by-laws are described on pages 222onwards.The powers of the Board of Directors are described on pages 181,194 and 223. The Board’s powers to issue and buy back shares aredescribed on page 33 and page 30 respectively.Agreements to which the company is a party and which are alteredor terminate upon a change of control of the Company are describedon pages 28 (“Monoprix”) and 40 (“Liquidity Risks”).There are no agreements between the Company and its directors oremployees providing for compensation if they resign because of atakeover bid, or are made redundant without valid reason, or if theiremployment ceases because of a takeover bid.5.4.2 INTERNAL CONTROL AND RISK MANAGEMENTGroupe Casino’s internal control and risk management systemis based on the risk management and internal control referenceframework published by the Autorité des marchés financiers (AMF),which is a French adaptation principally of the international frameworkpublished by the COSO (Committee of Sponsoring Organizations ofthe Treadway Commission).The work underlying this report involved interviews, analysis ofaudit reports and circulation of AMF and internal questionnaires.The format and content of the report is also based on the AMF’sreference framework and the report of its working group on auditcommittees.The report and the underlying work have been presented to the AuditCommittee for review and opinion, and submitted for approval to theBoard of Directors of Casino, Guichard-Perrachon in accordance withthe law of 3 July 2008.Scope of risk managementand internal controlIn accordance with the AMF reference framework, the scope of riskmanagement and internal control as described in this report coversthe parent company and its subsidiaries within the meaning of theFrench Commercial Code (Code de commerce). The AMF referenceframework requires the risk management and internal control systemto be adapted to the specific characteristics of each company and therelationships between the parent company and its subsidiaries.Parties involved in risk managementand internal controlSenior Management, through the Executive Committee, is responsiblefor defining and implementing the risk management and internalcontrol system to ensure that it is appropriate for the Company, itsoperations and organisation structure.The Board of Directors of the parent company, Casino, Guichard-Perrachon, is informed of the key features of the risk managementand internal control system by Senior Management. The Board hasset up an Audit Committee whose role is described below.The Board may also use its general powers to perform controls andverifications or take any other initiatives it deems appropriate.The Board’s Audit Committee is responsible for checking thatGroupe Casino has the appropriate resources and structure to identifyand prevent risks, errors and irregularities in the management of theGroup’s business. As such it fulfils a clear, ongoing oversight role inrelation to the risk management and internal control system.It issues observations and recommendations on audit work performedwithin the Group, and carries out or commissions any risk managementor internal control analyses and reviews it deems appropriate.It oversees the financial reporting process and monitors theeffectiveness of internal control and risk management systems inthe Group.The Audit Committee’s Charter, which set out its duties andresponsibilities, was revised in 2010.Group Internal Control is responsible for encouraging theimplementation of best internal control practices.Its duties include:■■■■■■■assisting Senior Management in identifying significant risks in theGroup’s business units;setting out the Group’s key internal controls in general proceduresand risk matrices;assisting the operating and support units in improving and optimisingthe control systems in place or to be deployed;setting out, managing and overseeing internal control and riskmanagement training programmes, including fraud prevention;analysing issues identified by the operating or support unitsinvolving deficiencies in internal control or significant developmentsin processes or information systems;overseeing the work underlying the Chairman’s report on internalcontrol and risk management;any other matters relating to internal control and risk managementas determined by Senior Management.Group Internal Control works with local internal control officers in thevarious business units, forming a network of about thirty dedicatedinternal control staff.The role of Group Internal Audit and the Business Unit InternalAudit departments in relation to internal control is described in thesection of this report on “Ongoing monitoring of internal control”.Lastly, employees, managers and operating heads are allresponsible for making the risk management and internal controlsystem work efficiently.Limitations of risk managementand internal controlAs stated in the AMF reference framework, no risk managementand internal control system can provide absolute assurance that thecompany’s objectives will be achieved. There are limitations inherent inany system resulting from numerous internal and external factors.General risk management principlesDef inition of risk managementWithin Groupe Casino, risk management encompasses a set ofresources, behaviours, procedures and actions that is adapted to theGroup’s specific characteristics and that enables Senior Managementto keep risks at acceptable level for the Company.Registration Document 2010 | Casino Group185
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Registration Document2010
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KEEPING AHEADIN A CHANGING WORLDCas
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1PRESENTATION OFTHE CASINO GROUP1.1
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PRESENTATION OF THE CASINO GROUPBus
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PRESENTATION OF THE CASINO GROUPRea
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2MANAGEMENTREPORTAT 31 DECEMBER 201
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31 DECEMBER 2010Business Review22.1
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Investor RelationsNadine COULMAline
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2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

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