EDF_REGISTRATION_DOCUMENT_2017

4.

CORPORATE GOVERNANCE Members and functioning of the Board of Directors

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 for investment in unlisted assets for dedicated assets, the Board of Directors has sole authority to authorise the aforementioned plan (see section 4.2.3.2 “Nuclear Commitments Monitoring Committee”). Furthermore, in accordance with the provisions of Article L. 225-37-1 of the French Commercial Code, the Board of Directors reviews annually on the Company’s policy in terms of equal access to employment and equal pay and defines the Company’s strategic aims, which are submitted every year to the EDF Central Works Council in accordance with Article L. 2323-10 of the French Labour Code.

Evaluation of director independence 4.2.2.4

Total number of directors

18

Number of independent directors Percentage of independent directors* * Excluding directors representing employees.

5

41.7%

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. Given the specific legal framework applicable to the Company, the Board of Directors has, out of a total of eighteen members, one representative of the French State who cannot meet the independence criteria defined by the AFEP-MEDEF Code, as well as six directors representing the employees who are not taken into account to calculate the proportion of independent directors. Likewise, the Chairman and Chief Executive Officer in his capacity as Executive Officer cannot be considered as independent as regards the criteria defined by the AFEP-MEDEF Code. At a joint meeting on 15 January 2018, the Governance and Corporate Social Responsibility Committee and the Appointments & Remuneration Committee examined the individual situations of directors appointed by the Shareholders’ Meeting. Upon recommendation from these Committees, at its meeting on 24 January 2018, the Board of Directors conducted the annual evaluation of the independence of the directors based on the criteria defined by the AFEP-MEDEF Corporate Governance Code, and classified Colette Lewiner, Laurence Parisot and Claire Pedini, as well as Philippe Crouzet and Bruno Lafont as 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 Governance and Corporate Social Responsibility Committee and the Appointments & Remuneration Committee examined any business ties that might exist between the Company and companies at which the directors hold offices, 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 2017 fiscal year, 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, nor any of the groups to which they belong, could be classified as a significant Group client or supplier nor could EDF be considered a significant client or supplier of these companies or of 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%, higher than the recommendations of the code (see section 4.2.1 “Members of the Board of Directors”).

Evaluation of the functioning of the Board of Directors and its Committees 4.2.2.5 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.

and the start of 2017. It involved in-depth interviews with each of the directors based on a questionnaire and an interview guide prepared by the specialist firm with the Chair of the Governance and Corporate Social Responsibility Committee. Accordingly, an analysis of the individual contribution of each director to the Board’s work was also conducted. This involved individual and confidential meetings arranged by the external firm with each director. The results of this evaluation showed that the directors considered that the quality of the work carried out by the Board of Directors and its Committees had improved over recent years and that the Board was capable of dealing with key strategic company issues in 2016. The directors were satisfied with the composition of the Board and felt that its members possessed a varied range of skills adapted to their needs. Among the areas of improvement identified, the Board expressed its desire for more dialogue and collegiality, to strengthen the collective identity and improve

Every three years, this evaluation is conducted by an external consultant under the supervision of the Governance and Corporate Social Responsibility Committee. 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

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EDF I Reference Document 2017