LEGRAND_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE

Administration and management of the company

actual or potential conflict of interest which he/she may detect independently. No actual or potential conflict of interest was reported to the Lead Director or to the Board of Directors. As far as the Company is aware, no conflict of interest currently exists. Furthermore, the Company’s Chairman of the Board of Directors has undertaken to inform the Chairman of the Nominating and Governance Committee of any intention to take on another directorship, and must ask the Board for its opinion before accepting any new directorship in a listed company. Definition of Independent Director and applicable criteria A Director is considered to be independent if he or she has no relationship with the Company, its management or the Group which might compromise such Director’s free judgment or create a conflict of interest with the Company, its management or the Group. In this regard, the internal rules of the Company’s Board of Directors lists the independence criteria set forth in the Code of Corporate Governance. Pursuant to the provisions of the Board’s internal rules and those of the Code of Corporate Governance, an independent director must not: W be or have been in the past five years: Independent Directors W an employee, executive officer or director of a company consolidated within the Company, W an employee, executive officer or director of the Company’s parent company or of a company consolidated by that parent company; W be an executive officer of a company in which the Company directly or indirectly holds a directorship or in which an employee appointed as such or an executive officer of the Company (currently in office or having held such office during the last past five previous years) is a director; W be a customer, supplier, commercial banker or investment banker: The evaluation of the significant or non-significant relationship with the Company or its Group must be debated by the Board and the qualitative and quantitative criteria that lead to the evaluation (continuity, economic dependence, exclusivity, etc.) must be explicitly stated in the annual report; W be related by close family ties to a company officer of the Company or Group; W have been a statutory auditor for the Company or a Group company in the course of the five previous years; W that is material to the Company or its Group, W or for a significant part of whose business the Company or its Group accounts. W an employee or executive officer of the Company or Group,

W have been a director of the Company for more than 12 years. Loss of the status of independent director occurs on the date at which this period of twelve years is reached; W be a non-executive officer and receive variable compensation in cash or in the form of shares or any compensation linked to the performance of the Company or Group, other than directors’ fees, with the exception of attendance fees. Directors representing major shareholders of the Company may be considered as being independent, provided that these shareholders do not take part in control of the Company. However, when a director represents a shareholder of the Company directly or indirectly holding more than 10% of the Company’s capital or voting rights, the Board of Directors, after receiving a report from the Nominating and Governance Committee, must systematically review his or her status as an independent director, with due regard for the Company’s share ownership structure and the potential for conflicts of interest. In accordance with the internal rules of the Company’s Board of Directors, the qualifications for independent directorships are discussed by the Nominating and Governance Committee with regard to the independence criteria defined above, and are approved by the Board of Directors when a director is appointed and annually for all directors. The findings of the Board’s review are made available to shareholders. Findings of the review conducted by the Nominating and Governance Committee and the Board on the criterion of business dealings between the Company and its directors During the annual review of the qualification criteria for independent directors, the Nominating and Governance Committee and then the Board of Directors at their meetings of February 7 and March 20, 2018 analyzed the business dealings that could exist between the Group on the one hand, and each director or companies with which they are associated (as a customer, supplier, investment banker or financing banker) on the other hand. To prepare its assessment, the Nominating and Governance Committee asked directors to complete an independence questionnaire. The Committee then analyzed the position of each W and where applicable, assess whether or not this relationship was significant by applying qualitative criteria (context, background and structure of the relationship, and parties’ respective powers) as well as quantitative criteria (material significance of the relationship to the parties). The tests showed that none of the directors had business dealings with the Company, except for Mr. Dongsheng Li. Procedure for the review of the status of independent Directors director based on the responses given in order to: W determine the existence of a business relationship;

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REGISTRATION DOCUMENT 2017 - LEGRAND