HERMÈS - 2019 Universal Registration Document

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CORPORATE GOVERNANCE SUPERVISORY BOARD'S' REPORT ON CORPORATE GOVERNANCE

2019 evaluation of the Audit and Risk Committee

CAG-CSR Committee devote at least two meetings per year to the in-depth examination of s CSR issues. Audit and Risk Committee organise training on foreign exchange and on the new IFRS standards s for committee members wishing to benefit; take advantage of the presentation of the risk mapping to the Audit s and Risk Committee to draw up action plans on a major risk. At the end of 2019, the CAG-CSR Committee reviewed the functioning of the Supervisory Board at one of its meetings and examined the areas of improvement identified by the Board in late 2018. All areas of improvements – which mainly consisted of fine-tuning the text for the “corporate governance” section of the Universal registration document to include the latest recommendations in matters of governance – had been implemented. OTHER AREAS FOR IMPROVEMENT IDENTIFIED 3.4.9.4

The functioning and work of the Audit and Risk Committee is generally very satisfactory. Since the last evaluation, two new members have joined the Committee (Ms Estelle Brachlianoff and Mr Alexandre Viros in 2019). The analysis of the evaluation results showed: the organisation and work of the Committee is highly efficient; s progress has been made since the last evaluation s In view of the findings of the above analysis, the Supervisory Board deemed its functioning and that of its Committees to be very satisfactory overall. The Board’s next formal self-evaluation will take place in 2022.

AREAS OF IMPROVEMENT IDENTIFIED

3.4.9.3

FOLLOWING THE FORMAL EVALUATION IN 2019

Some members would like to changes on the following points, which the Board, on the proposal of the CAG-CSR Committee, has decided to adopt as areas for improvement for the future: Supervisory Board improve Board members’ access to support materials for s presentations given during meetings.

CHANGE SINCE THE LAST EVALUATION

3.4.9.5

The conditions, detailed procedures and areas for improvement identified during the last formal three-year self-evaluation in 2016 are described in the 2016 registration document (pages 118 and 119). During this formal evaluation the Supervisory Board deemed its functioning to be very satisfactory overall.

Areas for improvement identified in the formal evaluation in 2016

Initiatives taken from 2016 to 2019

Composition of the Board in view of the Group’s international footprint, nationality of Board members

Appointment in 2017 of Ms Dorothée Altmayer (experience in human resources and psychology) and Ms Olympia Guerrand (international experience and dual nationality). Appointment in 2019 of Ms Estelle Brachlianoff to the Board, the Audit and Risk Committee, and the CAG-CSR Committee (experience as a senior manager in a group with an international dimension, steering structures undergoing transformation, CSR skills). Appointment in 2019 of Mr Alexandre Viros to the Board and the Audit and Risk Committee (expertise in the e-commerce and retailing universe, knowledge of customer relations, aptitude to work in industries undergoing profound transformation and seeing the emergence of disruptive models). A succession plan for the Executive Management has been drawn up and submitted to the CAG-CSR Committee. A succession plan for the Chairman of the Supervisory Board has been drawn up and submitted to the CAG-CSR Committee. New procedures for the allocation of directors’ fees were approved by the Board at its meeting of 6 June 2017 to: take market practices into account; s acknowledge days devoted to site visits; s acknowledge new responsibilities; s acknowledge the role of the Chairmen (a function requiring greater commitment); s acknowledge the results obtained over the last 10 years. s

The CAG Committee is not sufficiently informed about management succession plans

The variable component of directors’ fees is insufficient

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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