EDF / 2018 Reference document

CORPORATE GOVERNANCE Members and functioning of the Board of Directors

coherent and inseparable industrial programmes of investments or works on ■ existing assets, by the Company or one of its subsidiaries, exceeding €350 million per programme; real estate transactions, carried out by the Company or one of its subsidiaries, ■ exceeding €200 million; certain financial transactions (long-term borrowings, debt management, ■ securitisation or hedging transactions) whenever they exceed €5 billion (or the equivalent in any other currency); contracts and agreements (supplies, work or services) entered into by the ■ Company involving amounts, including any necessary subsequent amendments, equal to or exceeding €350 million, or between €200 million and €350 million if these contracts relate to a new strategic direction or a new business line for the Group; long-term contracts for the purchase or sale of energy, CO 2 emission credits and ■ quotas, by the Company or by one of its subsidiaries, for annual volumes or amounts in excess of 10TWh for electricity, 20TWh for gas (detailed information must also be provided on long-term gas purchase or sale agreements greater than 5TWh and less than 20TWh at the meeting of the Board of Directors following their signing) and €250 million for coal, fuel oil, and CO 2 emission credits and quotas;

strategic agreements to be entered into by the Company constituting firm and ■ irrevocable commitments relating to cooperation or partnerships with one or more foreign partners, in the nuclear industry involving significant transfers of intellectual property or technologies on the Group’s part and constituting major challenges for the Group. The Board of Directors sets the framework of the policy for the constitution, management and risk management of assets for hedging EDF’s nuclear commitments, specifically ruling on asset/liability management and asset allocation strategy. If the Nuclear Commitments Monitoring Committee issues a negative opinion on a plan to invest in unlisted assets for dedicated assets, the Board has sole authority to authorise the aforementioned plan (see section 4.2.3.2 “Nuclear Commitments Monitoring Committee”). In accordance with the provisions of Article L. 225-37-1 of the French Commercial Code, the Board of Directors reviews the Company’s policy in terms of equal access to employment and equal pay on an annual basis and it ensures that the Company implements a policy of non-discrimination and diversity, particularly in terms of the balanced representation of women and men in the executive bodies. Finally, it defines the strategic objectives of the Company subject to EDF's Central Works Council in accordance with Article L. 2323-10 of the French Labour Code.

4.

Evaluation of director independence 4.2.2.4

Total number of directors

18

Number of independent directors Percentage of independent directors*

5

41.7%

Excluding directors representing the employees. *

The AFEP-MEDEF Corporate Governance Code recommends that, in companies with a controlling shareholder, the proportion of independent directors should be at least one third of the Board of Directors and specifies that directors representing employees are not taken into account to calculate the proportion of independent directors. The table below recalls the independence criteria stated by the AFEP-MEDEF Code:

Independence criteria Criterion 1: Employee or corporate officer in the previous five years

Not be or not to have been during the last five years an employee or executive corporate officer of the Company, employee, executive corporate officer or director of a company consolidated by the Company, or employee, executive corporate officer or director of the parent company of the Company or of a company consolidated by this parent company. Criterion 2: Cross directorships Not be an executive corporate officer of a company in which the Company holds directly or indirectly a directorship or in which an employee appointed as such or an executive corporate officer of the Company (current or having been one less than 5 years ago) holds a directorship. Criterion 3: Important business relationships Not be a customer, supplier, business banker, financing banker, important consultant of the Company or its Group, or for which the Company or its Group represents a major part of the business. The assessment of the significant or non significant character of the relation maintained with the Company or its Group is debated by the Board and the quantitative and qualitative criteria that led to this assessment are explained in the annual report. Criterion 4: Family relationships Not have any close family relationship with a corporate officer. Criterion 5: Statutory Auditor Not have been a Statutory Auditor of the Company during the last 5 years. Criterion 6: Term of office of more than 12 years Not be director of the Company for more than 12 years, the loss of the status of independent director occurs upon expiry of the term of office of 12 years. Criterion 7: Variable compensation or performance-based compensation Not receive variable compensation in cash or securities or any compensation related to the performance of the Company or the Group. Criterion 8: Important shareholders A director representing an important shareholder of the Company or its parent company can be considered independent as soon as this shareholder ceases to participate in the control of the Company. However, beyond a threshold of 10% of capital or voting rights, the Board shall systematically review the qualification of independence while taking into account the share ownership of the Company and the existence of a potential conflict of interest.

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EDF I Reference Document 2018