Core principles

The Board is responsible for Gemalto’s corporate governance structure and for compliance with the amended Dutch corporate governance code dated December 10, 2008, as applicable during the 2009 financial year. The Company complies with the principles and best practice provisions of the Dutch corporate governance code with the exception of the best practice provisions listed here.

Board compliance statement

The Board compliance statement for purposes of compliance with the amended Dutch corporate governance code and in accordance with the implemented European Union Transparency Directive, can be found here.

Board structure

The Company has a one-tier Board comprising:

• One Executive Board member, the CEO.
• Non-executive Chairman.
• Eight further Non-executive Board members.

The Board held nine meetings during 2009, five in person and four by conference call.

The Board has ultimate responsibility for the management, general affairs, direction and performance of the business as a whole. The CEO conducts the day-to-day management of the Company.

The CEO is supported by the senior management team that consists of ten Executive Vice-Presidents, including the Chief Financial Officer.

Board committees

The Board committees are:

• Audit committee – held eight meetings during 2009.
• Compensation committee – held six meetings during 2009.
• Nomination and Governance committee – held five meetings during 2009.
• Strategy and M&A committee – held six meetings during 2009.

Board composition

The members of the Board can be found can be found in 'The Board and the management' section. Board member changes can be found here.

Report of the Non-executive Board members

The report of the Non-executive Board members describes the activities of the Board and the different Board committees during 2009. The report can be found here.

For more information on Corporate Governance, click here.

Core principles

The principal aim of Gemalto’s internal risk management structure and control systems is to manage business risks, with a view to enhancing the value of shareholders’ investments and safeguarding assets. Management has put in place a number of key policies, processes and independent controls to provide assurance to the Board as to the integrity of Gemalto’s reporting and effectiveness of its systems of internal control and risk management.

Risk assessment

In 2007, Gemalto initiated an enterprise risk assessment and subsequently issued a risk map together with action plans to mitigate the key risks. An update of these action plans was presented to the Audit committee and twice to the Board in 2009. For a detailed description, click here.

Internal control

Gemalto’s management regards internal control as a responsibility that is shared by all managers and that is met by implementing a set of processes and procedures within Gemalto intended to provide reasonable assurance that risks are mitigated, financial reporting is reliable, applicable laws and regulations are complied with, and that the objectives of the Board can be attained (click here).

For more information on Internal risk management and control systems, click here.

2009 Remuneration Report of the Board

The 2009 Remuneration Report of the Board, as drawn up by the Compensation committee, contains an account of the manner in which the Remuneration Policy for the CEO was implemented in 2009, and is scheduled to be implemented in 2010 (see Remuneration).

Remuneration Policy for the CEO

The Remuneration Policy for the CEO was adopted by the AGM on May 11, 2005 and was most recently amended by the AGM of May 14, 2008. The Remuneration Policy is published on Gemalto’s web site. The Remuneration Policy also serves as a guidance to establish the senior management remuneration (not addressed in this report).

The objectives of the Remuneration Policy and the remuneration policy for the management are to attract, retain and reward talented staff and management, by offering compensation that is competitive in the industry, motivates management to surpass the Company’s business objectives and aligns the interests of management with the interests of the shareholders.

Remuneration of the CEO, including his function as Executive Board member

The General Meeting, upon the proposal of the Board, determines the Remuneration Policy for the CEO, including for his function as Executive Board member. The remuneration of the CEO shall, with due observance of the Remuneration Policy, be determined by the Board. For details on the compensation of the CEO for the financial year 2009, see Compensation package of the CEO.

Remuneration of the Non-executive Board members

The remuneration of the Non-executive Board members, including the remuneration of the Chairman of the Board and the members of the Board committees is determined by the General Meeting. The remuneration is reviewed annually by the Compensation committee. For details on the remuneration structure for the Non-executive Board members, click here.

Long-term incentive plans – Global Equity Incentive Plan

Gemalto has established a Global Equity Incentive Plan enabling the Board to grant options, restricted shares units and/or share appreciation rights to eligible employees (see Long-term incentive plans).

Long-term incentive plans – Global Employee Share Purchase Plan

Gemalto has established a Global Employee Share Purchase Plan enabling the Board to offer the opportunity to eligible employees to purchase shares in the Company at a discount to the prevailing market price (see Long-term incentive plans).

For more information on Remuneration, click here.