L'Oréal - 2018 Registration Document

Corporate Governance COMPOSITION OF THE BOARD OF DIRECTORS

Ms Eileen Naughton’s situation was closely scrutinized. Concerning the relations between L’Oréal and Google, of which Ms Eileen Naughton is a senior management executive, following a review thereof, the Board considers that they are not significant, either in terms of total purchases by the L’Oréal Group or in terms of its total media purchases. Google is a significant digital provider for L’Oréal, without however having any exclusive relationship. Moreover, Google’s relationship with L’Oréal remains extremely marginal in Google’s sales. Furthermore, in light of the Human Resources position she holds at Google, Ms Eileen Naughton does not have any decision-making power with regard to the contracts that constitute the business relationship with L’Oréal. Finally, Ms Naughton has undertaken not to take part in any discussion or decision that could concern the business relationships between either of the companies. The business relations with Google are therefore unlikely to affect Ms Naughton’s independence. (2) Based on the work conducted by the Appointments and Governance Committee, the Board of Directors carefully examined the situation of Mr Bernard Kasriel, whose term in office, which was renewed by 98.49% on 20 April 2016, has exceeded 12 years. The Board of Directors took into account the objectivity that this latter has always shown at the time of the debates and decisions of the Board, and his ability to express his convictions from specific and different angles and provide a balanced judgement under all circumstances during Board discussions, notably, with regard to General Management. He has consistently shown, thanks to his experience as a senior management executive at the very highest level of a large international group, a remarkable independent spirit, perspective, and freedom to speak, enabling him to simultaneously challenge and support General Management in defining the Group’s strategy. These qualities, combined with a deep understanding of the Group, enable them to understand the challenges facing the Company in order to make an effective contribution to the work of the Board in the sole interest of the Company and to provide perspective on its decisions while ensuring the continuity of the Board’s debates. In light of these assessment elements, which were analysed with great care, the Board of Directors considered that the 12-year criterion, defined by the AFEP-MEDEF Code, among five other criteria, was not sufficient in and of itself for Mr Bernard Kasriel to automatically lose his status as independent Director.

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private interests or other duties, specifically with regard to his or her other offices and functions. Based on these reports, the Board has not identified any conflict of interests at the date of their preparation. Whatever the case, pursuant to the Internal Rules of the Board of Directors of L’Oréal, “all Directors are obliged to notify the Board of any situation that may constitute a conflict of interest, or potential conflict of interest, and must refrain from participating in the corresponding deliberation” . Finally, the situation of the Directors in light of the independence criteria set out in the AFEP-MEDEF Code is examined every year by the Board of Directors and described in section 2.2.1.4. The information pursuant to Annex I of European Regulation No. 809/2004 set out hereafter contains additional details in this respect. Information relating to corporate officers pursuant to Annex I of European regulation No. 809/2004 Family links existing between the corporate officers (Article 14.1 of the Annex) Ms Françoise Bettencourt Meyers is Mr Jean-Pierre Meyers’ wife and the mother of Mr Jean-Victor Meyers. Mr Jean-Pierre Meyers is the husband of Ms Françoise Bettencourt Meyers and the father of Mr Jean-Victor Meyers. Mr Jean-Victor Meyers is the son of Ms Françoise Bettencourt Meyers and of Mr Jean-Pierre Meyers.

In summary, on 31 December 2018, 7 members of the Board of Directors out of 13 (excluding the Directors representing the employees) qualify as independent ( i.e. 53.8% of the Board of Directors):

Ms Sophie Bellon s Mr Patrice Caine s Mr Axel Dumas s Ms Belén Garijo s Mr Bernard Kasriel s Ms Virginie Morgon s Ms Eileen Naughton s

Responsible Directors 2.2.1.5 Within the scope of the law and the rights and obligations of the Directors as defined in the Internal Rules of the Board of Directors of L’Oréal, and in accordance with the AFEP-MEDEF Code, the Directors are subject to compliance with the rules in force with regard to conflicts of interest and stock market ethics.

Handling of conflicts of interest

Concerning the potential conflicts between the duties of Directors and their private interests, which are to be reported by virtue of European Regulation n° 809/2004, each Director prepares a report each year about any potential conflicts of interest between his or her duties to L’Oréal and his or her

REGISTRATION DOCUMENT / L'ORÉAL 2018

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