Board Work

The Board of Directors plays a central role in Luxottica’s corporate governance.
It has the power and responsibility to direct and manage the Company with the objective of maximizing value for shareholders.
To this end, the Board of Directors deliberates and resolves on the necessary actions to achieve the Company’s business purpose, other than those matters which, in accordance with the applicable law or the Company by-laws, are expressly reserved for the Shareholders’ Meeting.
Pursuant to art. 23, paragraph 5, of the Company by-laws, the Board of Directors has sole responsibility to resolve upon the following matters:

1. a framework for the general development and investment programs for the Company and the Group
2. Company and Group objectives;
3. preparation of forecasts;
4. a framework for the financial plans and the approval of the incurrence of indebtedness for terms exceeding 18 months; and
5. approval of strategic transactions.

The Board of Directors resolved that the following are to be considered “strategic transactions” and therefore be submitted for approval to the Board itself:

1. those agreements that may have a significant impact on the future prospects of the Company and/or the Group; and
2. those transactions, which require a public announcement pursuant to art. 114 of Legislative Decree 58/1998 due to the possibility that they will impact the value of Luxottica Group S.p.A.’s stock.

The Board of Directors also resolved to reserve for its review and approval:

1. all agreements having a significant economic value, defined as those agreements with a value equal to or higher than EUR 30 million; and
2. all agreements binding the Company and/or its subsidiaries for a term exceeding 3 years, with the exception where the same are ordinary or recurrent agreements.

The Board of Directors annually evaluates, through the results of a questionnaire completed by its Directors, its size, composition and performance as well as that of its Committees. Through the responses from the questionnaire, improvement initiatives are also identified. In particular, the analysis focuses on: the adequacy of the number of members on the Board of Directors, the composition of the Board of Directors, the organisation of its meetings, the information provided to the Directors and the decision making processes. The same is also reviewed with respect to the Board Committees. At the meeting on February 17, 2009, the Board of Directors acknowledged the satisfactory composition of the Board of Directors and its Committees in terms of the number of the Directors, the professionals represented thereon and of the well functioning information flow between the Board of Directors and the Executive Directors.
During fiscal year 2008, the Board of Directors of Luxottica met seven times and the average length of the meetings was approximately two hours. Where the Board of Directors deemed it appropriate in order to deliberate on certain items on the agenda in more detail, Senior Executives of the Company and of the Group were invited to participate in the relevant part of such meetings. To prepare for its meetings, the Directors were provided with relevant documents and information sufficiently in advance of the meetings to enable them to make the decisions for which the Board is competent.