Operations and Assessment

Board operations

The Board of Directors met 12 times during 2010 and was regularly informed of developments through business reports from the Chief Executive Officer, including rolling forecasts as well as strategic and operational plans. The average attendance rate at such meetings was 80%.

Throughout 2010, the Board of Directors monitored the progress of significant aircraft programmes, such as the A350 XWB, A380, NH90 and the Tiger helicopter. It was kept informed about the A380 Qantas engine incident and reviewed the status of the programme management improvement initiative throughout the Group. The Board of Directors approved the launch of the A320 with a new engine option (neo), as well as the US tanker bid. It was also involved in the A400M contract negotiations.

Along with the objectives set forth in the Vision 2020, the Board also focused on cash management, the savings from improvement and efficiency programmes, compliance in key business processes and last but not least, employee engagement.

The Board of Directors also addressed: EADS’ strategy (including the competitive environment), the Group’s financial results and forecasts, a thorough review of the Enterprise Risk Management results and system, Investor Relations and financial communication policy, as well as legal risks. The Board of Directors approved a change in the company’s Executives remuneration structure and system. It also focused on succession planning.

Finally, it decided to replace the 2010 employee share ownership plan by a free share plan for every eligible EADS employee, in celebration of EADS’ 10th anniversary.

Assessment of performance of the Board of Directors

The Board of Directors carries out a yearly self-assessment of its performance, with an assessment also conducted by independent consultants every three years (as was the case in early 2010). A thorough discussion of the findings takes place at a subsequent meeting of the Board of Directors.

The Corporate Secretary conducted the most recent self-assessment in early 2011, which explored the role of the Board of Directors, its operations, how well it fulfils its mission, and the documentation and processes that influence its performance. The Directors concluded that as the Board gains in maturity its work as a team has grown increasingly efficient, allowing it to explore new domains and tackle relevant matters in the best interest of the Group.

The Directors consider the frequency and length of meetings adequate to cover all issues, although the addition of several unscheduled meetings for specific decisions makes EADS Board Membership demanding. Supporting documentation has improved and is better focused to support decision-making, while remaining quite detailed. Information provided at meetings remains comprehensive due to the complexity of the business; the proportion of debate versus information delivery during meetings has improved.

With regard to teamwork, Directors unanimously find that discussions are uninhibited and that differing views are both encouraged and constructive. Moreover, the working relationship between the Board of Directors and the members of the Executive Committee is considered productive.

The Directors feel that the Board agenda is flexibly managed and allows them to fulfil their duty; attention to compliance permeates the work of the Board of Directors. They find that the Board of Directors is given more time to address longer term questions than in the past. The Board of Directors devoted a full day meeting to strategy for the second time in 2010, on an industrial site. This practice is considered beneficial and will be continued. Other meetings of the Board of Directors in 2010 related to, among others: discussing key programmes, particularly the A400M contract re-negotiation and A380 stabilisation; overhauling the executive remuneration system; adapting the business model of certain segments; launching new products and making business portfolio decisions.

Overall, the Board of Directors considers that it assembles a very international and varied set of skills, with competencies centred on business and finance; it believes that its renewal in 2012 will be an opportunity to fine-tune its composition, which may improve gender diversity.
With regard to Committees, their work is very thorough and professional, and the interaction of the Audit Committee and the Remuneration and Nomination Committee with the rest of the Board of Directors is satisfactory. Nevertheless, Committee meetings — which are increasingly held on different dates from Board meetings — should focus even further on special and technical issues before presentation to the full Board of Directors, to avoid repetition of work.

Finally, the Chairmanships of the Board of Directors and the Committees are recognised as very competent and dedicated. Since the last assessment, in 2010, the time and quality of strategic reviews (including the competitive landscape), the discussion of financial strategy, and the ability to anticipate and respond to significant questions are widely recognised improvements. There should be further focus on issues such as succession planning and talent development, organisation and the role of support functions and the methodology of the globalisation effort, and effectiveness of governance.