L'Oréal - 2018 Registration Document

Corporate Governance PREAMBLE

Preamble The Board of Directors of L’Oréal (“the Company”) is a collegial body which is mandated by all the shareholders. It has the authority given to it by law to act in all circumstances in the best interests of the Company. By exercising its legal prerogatives, the Board of Directors (“the Board”) fulfills the following main duties: it validates the Company’s strategic orientations, appoints the corporate officers given responsibility for managing the Company within the scope of this strategy, chooses the method of organisation of General Management (combination or separation of the roles of Chairman and Chief Executive Officer), oversees management and ensures the quality of the financial and extra-financial information provided to the shareholders and to the markets. The organisation of the Board’s work and its composition is adapted to the specificities of L’Oréal and is in line with an approach of constant progress. The Board’s main responsibility is to adopt the method of organisation and the modus operandi which enable it to perform its duties to the best of its ability. Its organisation and its modus operandi are described in these Internal Rules which it draws up, and which are published in full on L’Oréal’s website and in the Registration Document. The Board’s actions are carried out within the framework of the AFEP-MEDEF Code. The Corporate Governance Report provides more detail on the Board’s composition and on the way in which the Board’s work is prepared and organised, and explains, where applicable, the recommendations that have not been adopted in light of the Company’s specificities. These Rules apply to all the Directors, both current and future, whether they are appointed by the Annual General Meeting or the employees, and are intended to complement the legal, regulatory and statutory rules and those under the Articles of Association in order to state accurately the modus operandi of the Board of Directors and its committees.

time in the year, the Board carries out the controls and verifications it deems appropriate. The Board ensures, as appropriate, that a mechanism for the prevention and detection of corruption and influence-peddling is in place. The Board also ensures that the executive officers implement a policy of non-discrimination and diversity as regards the balance of women and men in management bodies. The Corporate Governance Report relays the Board’s activity. The Board prepares for and convenes General Shareholders’ Meetings and sets the agenda. It puts the parent company and consolidated financial statements to the vote and presents to the meeting its Management Report to which is attached the Corporate Governance Report. The Board sets the remuneration of the Directors and executive officers. It reports on its policy and decisions in its Management Report and in the Corporate Governance Report. The Annual General Meeting is consulted every year on the components of remuneration due or allocated to each corporate officer for the past financial year. The Board is a collegial body which is legally unable to delegate its authority, except to the General Management in those cases expressly provided for by law. Within the scope of its work, it may decide to set up Committees which do not have decision-making powers but have the task of providing all useful information for the discussions and decisions which it is called upon to make. The Board decides on the composition of the Committees and the rules with regard to their modus operandi. The Board may ask one or more of its members or third parties to carry out special assignments or projects aimed in particular at studying one of more specific topics. General Management of the Company is carried out, under his responsibility, by either the Chairman of the Board of Directors (the Chairman and Chief Executive Officer) or by another individual with the position of Chief Executive Officer. Leaving the possibility to choose between the separation or combination of roles, the law does not give preference to any form and gives the Board authority to choose between the two methods of organisation of the General Management in light of the specificities of the Company. Whether the General Management is carried out by a Chairman and Chief Executive Officer or a Chief Executive Officer, the Board has the same prerogatives. It may in particular take all specific measures aimed at ensuring the continued balance of powers. Relations between General Management and the Board Form of General Management 1.2.1. 1.2

2

1.

REMIT AND AUTHORITY OF BOARD OF DIRECTORS

General powers of the Board 1.1 The Board of Directors determines the Company’s business strategy, in consideration of social and environmental issues, and oversees the implementation thereof. Subject to the powers expressly conferred to Annual General Meetings and within the limit of the Company’s purpose, the Board deals with all matters regarding the smooth running of the Company and settles issues concerning the Company by virtue of its decisions. At any

REGISTRATION DOCUMENT / L'ORÉAL 2018

79