HERMÈS - 2019 Universal Registration Document

CORPORATE GOVERNANCE SUPERVISORY BOARD'S' REPORT ON CORPORATE GOVERNANCE

AUDIT AND RISK COMMITTEE

Activities of the CAG-CSR Committee in 2019 In 2019, as in the previous year, the CAG-CSR Committee used a dashboard to plan and prepare its work in a balanced way over the year. The CAG-CSR Committee was required to examine and/or make recommendations on many subjects, and in particular: to review compliance with the Afep-Medef Code revised in June 2018 s of the components of compensation potentially due in the event of the departure of an Executive Chairman; the plan to introduce variable compensation for the Executive s Management based on CSR criteria; to present company policy regarding gender equality and equal pay; s to review compensation for 2019 of the Hermès International s Executive Chairmen and the press release to be put up on the financial website; to review compensation in respect of 2019, bonuses paid in respect s of 2018 and target bonuses in respect of 2019 for Executive Committee members; to evaluate changes in the composition of the Board and examine the s candidatures of members of the Supervisory Board; setting by the Board of diversity targets for the composition of the s Board; three-year formal evaluation of the Supervisory Board to be carried s out in 2019 (decision to be taken on whether or not to use an external firm, evaluation process and questionnaire, launch of the evaluation, summary and analysis of findings, areas for improvement); annual review of the succession plan for the Executive Management s and the Chairman of the Supervisory Board (in the presence of CAG-CSR Committee members only); annual presentation of sustainable development and corporate social s and responsibility issues; non-financial evaluation agencies; s end of product life (unsold goods and recycling). s The functioning and work of the CAG-CSR Committee were evaluated in 2019 as part of the three-year formal self-evaluation of the Supervisory Board (see page 247).

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Composition and functioning of the Audit and Risk Committee at 31 December 2019 The composition rules, duties and operating provisions of the Audit and Risk Committee are described in detail in the rules of procedure approved by the Supervisory Board, which have existed since 24 March 2010. These rules of procedure are revised on a regular basis to be in line with revisions and updates of the Afep-Medef Code and developments in the regulatory environment. The Audit and Risk Committee’s rules of procedure were updated on 19 March 2019 to rename it the “Audit and Risk Committee”. The fifth version of the rules of procedure dated 19 March 2019 is set out in full on page 284 and each update is made available online at https://finance.hermes.com/en/Corporate-Governance/Management- Bodies/The-Specialized-Committees-of-the-Supervisory-Board. These rules of procedure provide that at least half of the members of the Audit and Risk Committee must, at the time of their appointment and for the term this office, be qualified as independent under the Supervisory Board’s rules of procedure. This is currently the case. Before each Audit and Risk Committee meeting, Audit and Risk Committee members are sent, in good time, with reasonable lead time and subject to confidentiality requirements, a file containing documentation on items on the agenda requiring prior analysis and review. The main areas of expertise and experience of the members of the Audit and Risk Committee are presented in the fact sheet concerning them on pages 217 and seq .

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2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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