HERMES_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE

SUPERVISORY BOARD’S REPORT ON CORPORATE GOVERNANCE

Expense reimbursements Supervisory Board members are reimbursed for travel, accommodation and restaurant expenses incurred thereby to attend the Supervisory Board meetings, upon presentation of substantiating documents or receipts. These reimbursements are capped (see rules of procedure, page 172) and based on the rules applicable to Group employees. Directors’ fees and compensation Information relating to directors’ fees and compensation of the Supervisory Board is presented in § 3.1.4.3 on page 156.

s conducted the annual review of anticorruption procedures within the Group; s renewed (overall limit given to Management in favour of subsidiaries) or authorised (special authorisations) the sureties, endorsements or guarantees granted by Hermès International; s conducted the first annual review of all sureties, endorsements and guarantees still in force; s approved the updated rules of procedure of the Supervisory Board and the Audit Committee; s approved the renewal of the Hermès Corporate Foundation; s drewup responses where applicable to the opinion of theworks coun- cil on the Company’s strategic orientations; s reviewedand/orapprovedthereportsandworkoftheCAGCommittee described on pages 151 and 152; s set the minimum number of Hermès International shares (1,000) that Executive Chairmen must hold pursuant to Article 22 of the November 2016 AFEP-MEDEF Code; s set the allocation and payment of compensation and directors’ fees for 2016 to Board and Committee members; s decided on a newmethod of distributing directors’ fees and compen- sation to the members of the Supervisory Board for 2017; s kept itself informed at each meeting of all transactions carried out by the Executive Chairmen pursuant to the AMF’s position-recommen- dation set out in DOC-2016-08 “Guide to permanent information and managing inside information”; s reappointed the Chairman of the Supervisory Board and decided on the composition of the Audit Committee and CAG Committee after the General Meeting; s set out the training programme to be followed from 2017 to 2019 by the Employee Representative on the Supervisory Board; s acquainted itself with new obligations arising from law 2017-399 of 27 March 2017 on the duty of care of parent companies and contractors. At each meeting the CAG Committee informed the Supervisory Board of current events relating to governance (e.g. AMF reports, AFEP-MEDEF reports, HCGE implementation guides, IFA studies). s approved the updated Code of Market Ethics. Governance – Appointments – Compensation In 2017 the Supervisory Board:

Work of the Supervisory Board

3.1.3.9

Group activity and finance In 2017 the Supervisory Board was informed of the Group’s activities at each of its meetings and in particular: s was given a presentation by the ExecutiveManagement on the parent company and consolidated financial statements;

3

examined the 2017 budget;

s

s reviewed documents on forecasting and planning;

s determined the allocation of earnings to be put to the General Meeting of 6 June 2017;

s reviewed the situation of certain equity investments;

s formally noted proposals for acquisitions, disposals and equity investments;

s formally noted investment proposals;

s examined the reports and work of the Audit Committee described on page 154. Recommendations, authorisations and other items In 2017, the Supervisory Board: s authorised and reclassified related-party agreements and reviewed those for which the effects are ongoing (see the Supervisory Board’s report to the General Meeting on page 338); s approved the resolutions put to the Combined General Meeting of 6 June 2017 and acquainted itself with the reports drawn up by Executive Management; s formally noted the summary statement of services provided by Hermès International to Émile Hermès SARL in 2016 and projections for 2017; s discussed the Company’s policy with regard to gender equality and equal pay for equal work; s approved the wording of the prudential rules applicable by subsi- diaries together with updated lists of the authorised signatories and banks of Hermès International; s approved the new system of market abuse prevention within the Group, in particular the Code of Market Ethics and the new list of Permanent Insiders which includes the members of the Supervisory Board;

s noted the responsibility inherent to inside information;

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

147