Corporate Governance

Foreword

Fiat Group adheres to the Corporate Governance Code for Italian Listed Companies issued in December 2011, with modifications that take into account the specific characteristics of the Group. During February 2012, the Board of Directors, at the proposal of the Compensation Committee, formulated a Compensation Policy which incorporates the recommendations of the Corporate Governance Code and regulations issued by Consob that took effect on 31 December 2011. The Policy (which, in accordance with statute, forms the first section of the Compensation Report) was submitted to the non-binding vote of shareholders who voted in favor at the General Meeting of 4 April 2012.

In addition, with support from the respective Committees, the Board undertook a comparative review of the principles and criteria in the Corporate Governance Code that have been amended or revised and their effective implementation by the Group. On the basis of that review, at the General Meeting called for approval of the 2011 financial statements and election of the new Boards of Directors and Statutory Auditors, Shareholders were asked to consider the benefits of gender diversity in determining the composition of the new Board of Directors and, accordingly, they voted to elect two women, resulting in early application of the legal requirements that will apply from 2015. The Board also introduced changes to the Guidelines for the Internal Control and Risk Management System, including redefinition of the role of the Internal Control Committee (which was renamed Internal Control and Risk Committee) and other entities and individuals having an involvement.

In accordance with legal and regulatory requirements, the Company prepares an “Annual Report on Corporate Governance” which provides a general description of the Group’s corporate governance system together with information on ownership structure and adherence to the Corporate Governance Code, including key governance practices and the principal characteristics of the system
of internal control and risk management, including with reference to financial reporting. The Report, which is available in the Corporate Governance section of the Group website (www.fiatspa.com), is divided into four sections: the first contains a description of the governance structure; the second gives information on the ownership structure; the third provides an analysis of implementation of specific recommendations of the Corporate Governance Code and describes the principal characteristics of the system of internal control and risk management, including with reference to financial reporting and key governance practices; and, the fourth includes tables summarizing Fiat’s ownership and Board structure, a side-by-side comparison illustrating how Fiat has applied the principles and criteria of the revised Code, as well as the principal corporate governance related documents. This section provides a summary of aspects relevant to the Report on Operations. The Corporate Governance Code is available on the website of Borsa Italiana S.p.A. (www.borsaitaliana.it).

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