2008 Registration Document - Rexel

Annex 1Report of the Chairman of the Supervisory Boardon the functioning of the Supervisory Boardand on internal controls for the financial year 2008This report is drawn up pursuant to Article L.225-68 ofthe French Commercial Code, in order to report on theconditions in which the work of the Supervisory Board isprepared and organized, and on internal control proceduresimplemented by Rexel (the “Company”) within the groupfor which it is the ultimate parent company (the “Group”).This report has been drawn up by the Chairman of theSupervisory Board in collaboration with the Group InternalAudit Department as well as the Group Legal Department.This report by the Chairman of the Supervisory Board hasbeen reviewed by the Audit Committee and approved bythe Supervisory Board.The Company is a French société anonyme with aManagement Board and Supervisory Board, therebyseparating managerial powers from supervisory powers.1. Conditions under which the work of the Supervisory Board hasbeen prepared and organized1.1 Applicable rules and principlesThe Supervisory Board is organized and carries outthe duties entrusted to it in accordance with applicablelegal provisions, the Company’s by-laws and its Rules ofProcedure.1.1.1 Rules of Procedure of the Supervisory BoardThe Rules of Procedure of the Supervisory Board, whichwere adopted on February 13, 2007 and modified on June5, 2008, aim at supplementing and precising the legal andregulatory rules as well as the provisions of the by-laws ofthe Company governing the organization and functioning ofthe Supervisory Board as well as the rights and duties of itsmembers. They include provisions relating to the SupervisoryBoard’s authority, the organization of Supervisory Boardmeetings, the composition of the Supervisory Board, theethics of the Supervisory Board, and the compensation forthe members, independent members and observer(s) of theSupervisory Board or Supervisory Board Committees.On June 5, 2008, the Supervisory Board modified its Rulesof Procedure so as to:− comply with the May 20, 2008 extraordinary shareholders’meeting decision modifying the age limit for one third ofthe members of the Supervisory Board increasing it from65 to 70 years old; and− change the maximum number of members of the Strategicand Compensation Committees from four members, oneof whom being an independent member to five members,two of whom being independent members.The Rules of Procedure of the Supervisory Board areavailable on the Company’s website (www.rexel.com).1.1.2 Corporate governance guidelinesThe code of corporate governance of the “AssociationFrançaise des Entreprises Privées” (AFEP) and the“Mouvement des Entreprises de France” (MEDEF) asamended by the AFEP and MEDEF recommendations ofOctober 2008 relating to the compensation of corporatePAGE 262 | REXEL 2008