HERMES_REGISTRATION_DOCUMENT_2017

3

CORPORATE GOVERNANCE

SUPERVISORY BOARD’S REPORT ON CORPORATE GOVERNANCE

Attendance The Supervisory Board’s rules of procedure (Article 1.1.3.8.) note that the members of the Supervisory Board shall regularly and diligently take part in meetings of the Board and its Committees to which they belong. The principles governing the distribution of directors’ fees and compen- sation adopted by the Board include a variable component in proportion to attendance at meetings currently equal to 64.53% for the Supervisory Board and 60% for the Committees.

s by the Supervisory Board’s rules of procedure which absorbed the rest of the old ethics charter. A summary of the Hermès Group Code of Market Ethics is provided on page 308 and each update is made available online at http://finance. hermes.com/en/Corporate-Governance/Management-Bodies/ The-Supervisory-Board. The Code of Market Ethics was updated on 25 July 2017 and 1 January 2018 mainly to incorporate regulatory changes (ESMA clarifi- cations, CNIL exemption, amendment of the AMF General Regulation).

In 2017 the Supervisory Board met seven times with an almost 100% rate of attendance as shown in the table below:

Attendance at Supervisory Board meetings

Attendance at Compensation, Appointments and Governance Committee meetings

Attendance at Audit Committee meetings

2017

Average attendance

96.70% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 85.71% 71.43%

100.00%

86.67%

Éric de Seynes (Chairman)

n/a n/a

n/a

Monique Cohen (Vice-Chairwoman) Dominique Senequier (Vice-Chairwoman) Frédéric Afriat (Employee representative) Dorothée Altmayer (from 06/06/2017)

100.00%

100.00%

n/a n/a n/a n/a n/a n/a n/a

n/a n/a n/a n/a n/a n/a

Charles-Éric Bauer Matthieu Dumas Blaise Guerrand

100.00%

100.00%

Julie Guerrand

Olympia Guerrand (from 06/06/2017)

Sharon MacBeath Renaud Momméja Robert Peugeot

100.00%

83.33% 83.33% 66.67%

n/a

100.00%

n/a: not applicable.

Conflicts of interest – Business relationships – Service contracts with benefits Article 1.1.3.6 of the Supervisory Board’s rules of procedure states that: “Members of the Supervisory Board shall endeavour to avoid any pos- sible conflict between their moral and material interests and those of the Company. They shall inform the Supervisory Board of any conflicts of interest in which they might be involved. In cases where a conflict of interest cannot be avoided, they shall refrain from taking part in any discussions or decisions related to the matters concerned. Each member of the Supervisory Board must also draw up a statutory declaration stating whether or not there is a conflict of interest, even a potential one: s every year when the registration document is prepared.” The declaration describes all possible situations, with precise examples, inviting the members of the Board to declare all situations that could represent a potential conflict of interest. s at the time of his or her appointment;

The declaration serves as a basis to assess the material nature of business relationships that could affect the independence of a Board member as required by recommendation 8.5.3 of the AFEP-MEDEF Code. The assessment criteria are quantitative (amount of sales or reve- nue generated during the financial year and the percentage represented by those amounts in relation to the counterparty’s total sales or revenue) and qualitative (nature of existing business relationships). As regards the quantitative criteria, the Supervisory Board did not consi- der it appropriate, given the diversity of possible situations, to set a threshold below which a business relationship would be deemed imma- terial. The assessment is made on a case-by-case basis. Monique Cohen, Sharon MacBeath and Robert Peugeot declared no business relationships with the company. Dominique Senequier declared a non-significant business relationship described on page 235 under related party transactions.

144

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL