LEGRAND / 2018 Registration document

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INTERNAL CONTROL AND RISK MANAGEMENT RISK FACTORS AND CONTROL MECHANISMS IN PLACE

R 3.6.2.2 MANAGEMENT OF TALENT, SKILLS ANDWELL-BEING ATWORK In general, Legrand’s key employees are long-standing employees of the Group. They have built up excellent knowledge of Legrand and its activities and of the entire sector in general. The loss of any one of these key employees could lead to a loss of know-how or product or market expertise, and could result in Legrand’s competitors being able to obtain sensitive information. The loss of key employees could also adversely affect the Group’s ability to retain its most important distributors, continue the development of its products or implement its strategy. The Group’s internal and external development is also partly dependent on its ability to hire, train, motivate, promote and retain new talent in all regions in which it operates. Well-being at work makes employees more engaged and therefore more effective in their activities. Employee dissatisfaction could cause them to become disengaged and therefore less effective, and in the most serious cases could lead to strikes or resignations. Legrand has a Human Resources policy to attract, retain and develop the expertise, talents and skills it requires to conduct its business worldwide. The human resources function is present in all countries, either at the local or regional level. In particular, Legrand has rolled out programs to motivate and retain its key staff, and skills and talent management is one of the priorities of the Group’s CSR roadmap. The main mechanisms are training, annual performance reviews (the CAPP – Competency Appraisal Performance & Perspective – process), the talent management process (identification, succession plan, mobility committees) and manager retention arrangements. Moreover, the Group has introduced several major initiatives since 2017, including a highly selective corporate training program, a mobility platform to encourage international transfers, and strong local development policies (Mexico, USA) to strengthen the employer brand and retain key talents. To anticipate and manage potential risks, the Group has introduced monthly reports which allow it to prepare consolidated quantitative and qualitative data with a broad scope (almost 90% of the workforce). This reporting covers labor risks and the related trend analysis, along with the employee retention rate. The employee- related indicators summarized in section 4.7.2 of this registration document are consolidated in an annual report on human resources data.

In 2017, Legrand carried out its first engagement survey covering all of its employees. Overall, 78% of employees took part in the survey. It gave all employees the opportunity to comment on matters such as how proud they are to belong to the company, their working conditions and their confidence in management. In 2018, the Group worked on devising action plans based on that survey, in order to improve employee satisfaction. Notification systems are also in place to alert the Group rapidly if key talent leaves. Internal communication, too, is important in motivating staff and creating a sense of belonging, by providing regular information on the Group’s strategy and objectives. A range of media are used, all conveying the Group’s core values embodied in the Charter of Fundamental Principles: W onboarding seminars (“Welcome Days” for new hires) to share the Group’s vision, strategy, culture and values; W information resources, such as the Group Dialeg intranet and local Dialeg intranets, and the online magazine. R 3.6.2.3 INTELLECTUAL PROPERTY The Group’s future success depends in part on developing and protecting its intellectual property rights, particularly the Legrand and Bticino brands. Legrand could also incur significant expenses in monitoring, protecting and enforcing its rights. If Legrand failed to adequately protect or enforce its intellectual property rights, its competitive position could suffer, which could have an adverse effect on its business, results and financial position. Furthermore, in spite of precautions taken, Legrand cannot fully guarantee that its activities will not infringe the rights of third parties. If this were to happen, Legrand could be subject to claims for damages and might be prevented from using the disputed intellectual property rights. To minimize this risk, Legrand pays particular attention to managing its intellectual property, and relies on a dedicated team in its Innovation and Systems Department. This team is in charge of monitoring patents, designs, trademarks and domain names, and for tackling counterfeiting. It also takes joint action with other major market players within professional organizations such as Gimélec, IGNES, and ASEC. It draws on input from intellectual property representatives in each of the Group’s SBUs in France and in key foreign subsidiaries. The primary role of these representatives is to inform the Group about the SBUs position in all strategic decisions relating to intellectual property, such as decisions to file for and extend rights and to waive title. This approach is monitored via a standardization committee. Finally, Legrand also uses external consulting firms to assist it in drafting its patents or to deal with certain matters in defense of its rights, working in close collaboration with the Group’s Legal Department and external counsel.

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LEGRAND

REGISTRATION DOCUMENT 2018