HERMÈS - 2020 Universal registration document

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RISKS AND CONTROL RISK MANAGEMENT, INTERNAL CONTROL AND INTERNAL AUDIT

RISK MANAGEMENT, INTERNAL CONTROL AND INTERNAL AUDIT

4.3

CONTROL ENVIRONMENT 4.3.1 While Hermès has attained the stature of an international group, it has also retained its human dimension, with family ideals. The Company is dedicated to a culture and spirit of craftsmanship and seeks to cultivate strong values among its employees. At the forefront of these values is the demand for quality, the very essence of Hermès’ business. The Group’s commitment to quality applies not only to its products and services, but also to its management methods. Hermès attaches great importance to its Senior Executives’ managerial skills. The Hermès culture, which is propagated mainly through induction programmes for new managers and special training, imparts to each individual a thorough understanding of their role in the organisation and the need to abide by the Group’s code of conduct and rules of behaviour, as well as to comply with the internal control system. The demanding quality-oriented values and mentality shared by all employees serve as a solid foundation to underpin behaviours and observance of stringent internal control policies and procedures. The way in which these values work together and their balance are contingent, on the Company’s ingrained risk management and internal control culture, management style and corporate ethics values. With this in mind, to underpin the risk management culture promoted by the Group, a formal ethics charter was adopted and disseminated to its employees in 2009. 4.3.2 The Group’s risk management and internal control mechanisms are applicable to the parent company and to the controlled subsidiaries as presented in the notes to the consolidated financial statements.

In 2012, the code of business conduct was added, which sets out the behaviour expected from Group employees. These two documents, translated into 12 languages, were updated in 2016 and subsequently in 2018 and aim to enhance the dissemination of the rules of conduct that underpin the Hermès Group’s integrity and ethics: the ethics charter aims to promote compliance and to ensure the s proper application of applicable laws, regulations and key principles. It is intended as an instrument of progress and dialogue, and encourages employees to discuss with their line managers in cases where the principles are difficult to apply or are open to misunderstanding; the purpose of the code of business conduct is to raise employees’ s awareness about certain risks and to instil behavioural and alert reflexes. Moreover, an anti-corruption code of conduct was also rolled out for all employees in 2019 and translated into 17 languages (see section 2.8.2.3.2 on the corruption prevention system). These documents are available on the Company intranet under “Our Ethics” and on the website (https://finance.hermes.com./en/ethics- human-rights-and-diversity/), and are subject to formal acknowledgement of receipt when given to employees. Additional training sessions on anti-corruption laws have also been organised for operational staff.

PARTIES RESPONSIBLE FOR RISK MANAGEMENT AND INTERNAL CONTROL

SUPERVISORY BOARD

GROUP MANAGEMENT

AUDIT AND RISK MANAGEMENT DEPARTMENT

AUDIT AND RISK COMMITTEE

SPECIALISED COMMITTEES

THE GROUP’S OPERATIONAL STAFF

THE NETWORK OF INTERNAL CONTROL MANAGERS

344 2020 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL