Composition of the Board

As of the Shareholders’ Meeting of May 31, 2005, WENDEL  became a “Société Anonyme” with an Executive Board and a Supervisory Board.
As of June 09, 2008, the Supervisory Board was comprised of eleven members and the Executive Board of two

Members of the Supervisory Board
>> Ernest-Antoine Seillière
>>  Nicolas Celier
>>  Didier Cherpitel
>>  Béatrice Dautresme
>>  Jean-Marc Janodet
>>  Frédéric Lemoine
>>  Edouard de l’Espée
>>  François de Mitry
>>  Grégoire Olivier
>>  François de Wendel
>>  Guy de Wouters

Members of the Executive Board
>>  Jean-Bernard Lafonta
>>  Bernard Gautier


Rules of operation

The Executive Board is collectively responsible for managing the Company. To this end, it has extensive management and decision-making powers.

Pursuant to the Company’s by-laws, the Supervisory Board exercises ongoing oversight of the Executive Board’s management of the Company. The Executive Board presents a detailed report to the Supervisory Board at least once a quarter on the Company’s situation and prospects. In particular, it presents the performance of the subsidiaries in the investment portfolio (net sales, key income statement ratios and principal balance sheet items), projected or executed financial transactions and all other transactions that might affect the Company.

Every quarter, the Executive Board also presents the change in net asset value per share, indicating the value created by the Company, share price performance, as well as items indicating the Company’s performance relative to its peers and to the principal equity market indices.

The Executive Board also informs the Supervisory Board every quarter about changes in the share capital and voting rights, about the Company’s proposed acquisitions or divestments and any other plans that might have a material impact on the financial condition of the Company. The Executive Board must obtain the Supervisory Board’s approval for such plans. Similarly, the Supervisory Board must approve any significant acquisition or divestment of subsidiaries.

The Supervisory Board may conduct any verification it deems appropriate. The Executive Board presents the annual parent company and consolidated financial statements to the Supervisory Board, which presents its report and observations on the financial statements and on the Executive Board’s detailed report to shareholders at their Annual Meeting. The Supervisory Board is responsible for the appointment and revocation of members of the Executive Board. It also sets, on the basis of proposals from its Governance Committee, the policy regarding the compensation and bonuses paid to members of the Executive Board. It also renders its opinion, based on the recommendations of the Executive Board on proposed profit-sharing and other performance-based awards.

In addition to the responsibilities conferred by law, the Company’s by-laws require the Supervisory Board to approve amendments to the by-laws and any transaction that changes, directly or indirectly, the share capital of the Company. It must also approve any decision to appropriate earnings or pay dividends.

To discharge its responsibilities, the Supervisory Board may create specialized committees composed of its members to monitor certain activities of its choosing.

In addition, at every meeting of the Supervisory Board, the Executive Board reports on its strategy and on the situation of the Company and other Group companies.

The Supervisory Board meets regularly and at least four times per year. In 2007 and through March 2008, the Supervisory Board met 15 times (vs. eleven times in the previous year). Average attendance was 90% for Supervisory Board meetings and no member of the Board was absent more than three times. The average length of Supervisory Board meetings was more than two hours.

To discharge its responsibilities under optimal conditions, the Board’s charter stipulates that its discussions shall be prepared in certain fields by specialized committees. There are two such committees: the Audit Committee and the Governance Committee.

Once a year, the Board meeting includes a discussion of how the Supervisory Board’s working sessions were prepared and organized. At each meeting, the situation of the Company and other Group companies is examined, as are investment, divestment and financing proposals.

Relations between members of the Board and the Company and independence

The Supervisory Board uses the Bouton report’s defi nition of “independent member”: “A director is independent when he has no relationship of any kind with the company, its group or its management.” As it did last year, the Supervisory Board examined the situation of each of its members to ensure that they:
• were not employees or corporate offi cers of the Company, its parent company or a consolidated company; either currently or during the last fi ve years;
• did not act as the Company’s investment or commercial banker;
• did not have family ties with a member of the Board;
• have not been a paid director of a Group subsidiary;
• have not been a member of the Board for more than 12 years.

At its March 26, 2008 meeting, the Supervisory Board examined the independent character of its members, as defi ned by the Bouton report, and considered that as of January 1, 2008 the following three members satisfied the criteria: Béatrice Dautresme, Didier Cherpitel and Grégoire Olivier and that Frédéric Lemoine, if appointed by shareholders’ at their Annual Meeting, would also fall into this category. Under these conditions, the Supervisory Board will have a composition in accordance with the recommendations of the Bouton report. This report recommends that one third of the directors of the companies controlled should be independent, and Wendel would have four out of eleven independent directors. Conversely, the following members belong to the families descended from François de Wendel: Ernest-Antoine Seillière, Guy de Wouters, Nicolas Celier, Édouard de l’Espée, François de Mitry and François de Wendel.

In addition, over the last fi ve years, none of the members of the Supervisory Board has been convicted of fraud, has been party to a bankruptcy or court-ordered liquidation or has been prevented by law from exercising the functions of corporate officer.


Trading in Company shares and market transparency

The rules applicable to members of the Supervisory Board and insiders, established in December 2006, were strengthened in July 2007, in connection with work carried out within AFEP: henceforth, members of the Supervisory and Executive Boards must not trade any Wendel shares in the market during a period beginning 30 calendar days preceding the publication of semiannual and annual results and ending two days after their publication. Similarly, blackout periods may be established outside these two periods, when members of the Supervisory Board and permanent insiders are likely to be in possession of inside information.
Thus, in 2007, the whole period prior to the IPO of Bureau Veritas was considered as a blackout period. Similarly, the new rules forbid any hedging transaction of less than one year on Wendel shares.
The Supervisory Board has also decided to prohibit its members from holding shares in listed companies of which the Group is a shareholder. This prohibition also directed at any listed or unlisted company in which Wendel might be considering an investment. The same rule applies for Wendel employees by decision of the Executive Board, which has decided to impose, if necessary, restrictions or prohibitions on the exercise of stock options followed by sale of the shares, on the acquisition or sale of Wendel shares within the Company savings plan and the sale of bonus shares.
The Code of Conduct complies with the recommendation of the Autorité des marchés financiers (AMF) concerning the disclosure of transactions by corporate offi cers. It recommends that Board members hold their shares in nominative form and disclose all transactions they execute directly, that are executed by a family member or by a company they control.
Since January 1, 2005, pursuant to article L. 621-18-2 of the Financial and Monetary Code, the Company must publish, via press release, financial instrument transactions disclosed by executives. This information must be furnished on an individual and nominative basis within five trading days from the date the Company receives disclosure of the transactions. The Company has also decided, in an effort to increase transparency, to publish all of these transactions since 2006 on its Website. In 2007, corporate officers carried out the following 19 transactions.

Apportionment of directors' fees

At the Shareholders’ Meeting of May 29, 2006, the total annual amount of directors’ fees was set at €700,000. The breakdown on an annual basis, which was modifi ed in April 2007 on a proposal from the Governance Committee to take account of the increasing frequency of meetings of the Board and Committees and the duration of each meeting, is henceforth as follows:
Basic director’s fee: €35,000
(€32,000 (previously) ;
Additional fee for committee membership: €15,000
(previously €10,000) ;
Fee paid to the Chairman of each committee: €60,000
(previously €48,000).

The Chairman of the Supervisory Board receives compensation for his position as Chairman, pursuant to article L. 225-81 of the French Commercial Code, now set at €105,000 (previously €128,000). He also receives a payment equal to twice the basic director’s fee (up to now it was the basic director’s fee). Finally, members of the Board may be reimbursed for their travel expenses outside the Paris region. Directors’ fees are not adjusted according to attendance.
The Company pays no director’s fees to members of the Executive Board. Director’s fees paid to them by the Group’s subsidiaries are deducted from their annual compensation.

Compensation policy

Wendel Investissement complies with the AFEP/MEDEF recommendations of January 2007. This subject is addressed in more detail in this report under the heading “Supplemental information” (page 204). The compensation policy was submitted to the Supervisory Board for approval at its meeting of March 28, 2007, after approval of the Governance Committee.

The Executive Board met 25 times in 2007 (13 times in 2006) with an attendance rate of 100%.