EDF / 2018 Reference document

4.

CORPORATE GOVERNANCE Members and functioning of the Board of Directors

Evaluation of director independence The Board of Directors annually reviews the individual situation of the directors with regard to the independence criteria stated by the AFEP-MEDEF Code. It may also be called upon to make a decision during the year in the event of a change in the status of a director justifying a review of his or her independence. In 2018, the joint meeting of the Governance and Corporate Social Responsibility Committee and the Appointments and Compensation Committee held on 29 November 2018 reviewed the situation of Laurence Parisot with regard to the independence criteria specified by the AFEP-MEDEF Code, in view of her new responsibilities in Citi bank. The Board of Directors meeting held on 14 December 2018 took note, based on the opinion of the Committees, of the absence of any change in the individual situation of Ms Parisot that could question her qualification of independent director. With particular regard to the business relationship between Citi bank, in which Ms Parisot is Chairwoman and Managing Director, and the EDF group, the Board of Directors found that the cross analysis of the nature and volume of business between the EDF group and Citigroup revealed that there were no significant business relationships between EDF and Citi bank, nor any dependence or exclusivity in the business relations between the two groups. In addition, arrangements were made within Citibank so that Ms Parisot does not participate in any reflection, discussion or work of any kind related to EDF. At a joint meeting on 7 February 2019, the Governance and Corporate Social Responsibility Committee and the Appointments and Compensation Committee conducted an annual review of the individual situations of directors appointed by the Shareholders' Meeting, taking into account the independence criteria provided for by the AFEP-MEDEF Code. The Committees noted that Jean-Bernard Lévy, due to his capacity as Executive Corporate Officer cannot be considered as independent director (criterion no. 1). The directors appointed on the recommendation of the French State in accordance with Article 6 of order no. 2014-948 of 20 August 2014 on the governance and equity transactions of companies with a public shareholding “represents”, by virtue of this text, “the interests of the French State as shareholder”. In view of the criteria set by the AFEP-MEDEF Code, these directors cannot be considered as independent (criterion no. 8). The same holds true for the Representative of the French State appointed pursuant to the provisions of Article 2 of the order of 20 August 2014, in his capacity as representative of EDF's majority shareholder (criterion no. 8).

Finally, directors representing employees are not subject to an assessment, in accordance with the recommendations of the AFEP-MEDEF Code. With respect to business relationships, the Governance and Corporate Social Responsibility Committee and the Appointments and Compensation Committee reviewed the situation of Ms Lewiner, Ms Parisot and Ms Pedini and Mr Crouzet and Mr Lafont with regard to criterion no. 3 provided for by the AFEP-MEDEF Code. Upon recommendation from these Committees, at its meeting on 14 February 2019, the Board made an annual evaluation of the independence of the directors and confirmed Ms Lewiner, Ms Parisot and Ms Pedini and Mr Crouzet and Mr Lafont as having the status of independent directors, as the Board deemed that these directors had no relations with the Company, its Group or its Management that might compromise the exercise of their freedom of judgement. In particular, the Committees examined any business ties that might exist between the Company and companies at which these directors hold offices or management posts, as well as groups to which they belong, on a quantitative level, via the importance of any business relations existing between the Company and these companies (and their groups) and sales between them recorded in the course of the 2018, and on a qualitative level (director’s position in the companies in question, any economic dependence, exclusivity, etc.). Based on their findings, none of the companies at which the directors hold offices or management posts, nor any of the groups to which they belong, could be classified as a significant Group client, supplier, business banker, financing banker or important consultant of the EDF group, nor could EDF be considered a significant client or supplier of these companies or their groups. Following this analysis, the Board concluded that there were no significant business ties involving the directors that it classified as independent. On the date of this Reference Document, the Company’s Board of Directors therefore features five independent directors out of the twelve taken into account to make the calculation in accordance with the AFEP-MEDEF Code, i.e. a proportion of independent directors of 41.7%, (excluding directors representing employees) higher than the recommendations of the code (see section 4.2.1 “Members of the Board of Directors”). The table below presents the situation of the administrators classified as independent stated by the AFEP-MEDEF Code of Corporate Governance:

Criterion no. 1

Criterion no. 2

Criterion no. 3

Criterion no. 4

Criterion no. 5

Criterion no. 6

Criterion no. 7

Criterion no. 8

Classification considered Independent Independent Independent Independent Independent

Philippe Crouzet

x

x x x x x

x x x x x

x x x x x

x x x x x

x x x x x

x x x x x

x x x x x

Bruno Lafont

Colette Lewiner Laurence Parisot

x x x

Claire Pedini

x: means that the criterion is met.

2016 Three-yearly evaluation The 2016 evaluation was conducted by a specialised external firm, selected following a call for tenders, under the supervision of the Governance and Corporate Social Responsibility Committee. The evaluation was conducted, at the end of 2016 and the start of 2017. Accordingly, an analysis of the individual contribution of each director to the Board’s work was conducted. This involved individual and confidential meetings arranged by the external firm with each director. The findings of the evaluation were reviewed at a meeting of the Governance and Corporate Social Responsibility Committee and presented to the Board of Directors. The Board of Directors then met during the second half of 2017 for a special working session to explore the areas of improvement identified and to discuss in more detail the expectations expressed by the directors in the triennial evaluation.

Evaluation of the functioning of the 4.2.2.5 Board of Directors and its Committees In accordance with the provisions of the AFEP-MEDEF Code, the Board’s internal rules of procedure state that the Governance and Corporate Social Responsibility Committee supervises annually an evaluation of the functioning of the Board of Directors and propose areas for improvement. Once a year, therefore, the Board dedicates one item on its agenda to this evaluation and holds a discussion on its functioning and that of its Committees in order to improve its efficiency and ensure that important issues are appropriately prepared and discussed. Every three years, this evaluation is conducted by an external consultant under the supervision of the Governance and Corporate Social Responsibility Committee.

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EDF I Reference Document 2018