LEGRAND_REGISTRATION_DOCUMENT_2017

06

CORPORATE GOVERNANCE

Administration and management of the company

At the request of the Lead Director, the assessment of the Board’s operating procedures and those of its specialized committees regarding 2016 took place internally at the start of 2017 under the supervision of the Lead Director through a questionnaire given to directors. The results of this assessment are reported in the above section, “Areas of improvement for the operation of the Board of Directors further to the annual evaluation of the Board of Directors.” In accordance with the Board of Directors’ internal rules, the Lead Director presented a report of her activities in 2017 to the Board of Directors at its meeting on March 20, 2018. The Board of Directors approved the Lead Director’s activity report, at the time expressing its full satisfaction with the work she had done.

The Lead Director spoke at the Company’s General Meeting of Shareholders of May 31, 2017 and presented Mr. Gilles Schnepp’s compensation components as well as the Group’s governance. With regard to compensation, the Lead Director explained the underlying principles of the compensation policy, the compensation components paid to Mr. Gilles Schnepp for financial year 2016, and those that were allocated to him for his role as Chairman and Chief Executive Officer for financial year 2017, subject to approval by the shareholders. With regard to governance, were presented to shareholders: the composition of the Board of Directors and its evolution, with a focus on the varied and complementary competences of its members, as well as the formal assessment process of the Board of Directors and its specialized committees which contribute to improving their operation. In order to facilitate the work of the Board of Directors and the preparation of deliberations, there are specialized committees that examine topics within their respective areas of competence and submit opinions, proposals and recommendations to the Board of Directors. There are four permanent specialized committees: W the Audit Committee; W the Nominating and Governance Committee; W the Compensation Committee; and W the Strategy and Social Responsibility Committee. In addition to the permanent committees, the Board of Directors may at any time set up one or several ad hoc committees, which may or may not be temporary, and determine their membership and operation as it sees fit. Finally, the Chief Executive Officer may create an executive committee and determine its membership and scope. R 6.1.3.1 COMPOSITION OF THE BOARD OF DIRECTORS’ SPECIALIZED COMMITTEES Principles The Board of Directors appoints committee members on the recommendation of the Nominating and Governance Committee, for a term set by the Board of Directors and which may not exceed their term of office as Directors. The Board of Directors may remove committee members after consultation with the Nominating and Governance Committee.

6.1.3 –Board of Directors’ specialized committees

The Audit Committee may have a maximum of five members. Members of the Audit Committee may not be executive officers or managers holding salaried positions with the Company or any of its subsidiaries. Members of the Audit Committee should be competent in finance or accounting. The Chairman of the Audit Committee is chosen by the members of the Audit Committee at the proposal of the Nominating and Governance Committee, from among the independent members of the committee. The appointment of the Audit Committee’s Chairman should be specially reviewed by the Board of Directors. The same procedure shall apply for the extension of the term of office. The Nominating and Governance Committee may have a maximum of five members. The Nominating and Governance Committee should not include any executive officers. The Chairman of the Nominating and Governance Committee is chosen by the committee from among its independent members. The Compensation Committee may have a maximum of five members. The Nominating and Governance Committee should not include any executive officers. The Chairman of the Compensation Committee is chosen by the committee members from its independent members, on the recommendation of the Nominating and Governance Committee. With respect to the Strategy and Social Responsibility Committee , it has a maximum of five members. The Chairman of the Strategy and Social Responsibility Committee is chosen by the members of said committee from its membership, on the recommendation of the Nominating and Governance Committee.

178

REGISTRATION DOCUMENT 2017 - LEGRAND