LOREAL_Registration_Document_2017

2 Corporate governance *

ORGANISATION AND MODUS OPERANDI OF THE BOARD OF DIRECTORS

AUDIT COMMITTEE

COMPOSITION

Mrs. Virginie Morgon (Chairwoman) • Mrs. Sophie Bellon • Mr. Charles-Henri Filippi • Mrs. Béatrice Guillaume-Grabisch • Mr. Georges Liarokapis • Mr. Jean-Victor Meyers • The number of independent Directors is 3 out of 5, namely 60% (excluding the Director representing the employees). A Director representing the employees, Mr. Georges Liarokapis, is a member of this committee. The Audit Committee met four times in 2017, with an attendance rate of 100%. The committee is chaired by Mrs. Virginie Morgon, an independent Director who has recognised financial expertise. The members of the Audit Committee have the necessary financial and accounting skills due to their professional experience and their good knowledge of the Group’s accounting and financial procedures. The Statutory Auditors attend meetings, except for the deliberations that concern them. The committee meets at least twice a year without management presence, with the participation of the Statutory Auditors.

The committee did not deem it appropriate to call upon outside expert. The Chairman and Chief Executive Officer is not a committee member.

MAIN REMITS

2017 MAIN ACTIVITIES

Monitoring of the process for preparation of s financial information. Monitoring of the statutory audit of the annual s and consolidated accounts by the Statutory Auditors. Review of the audit plans and the Statutory s Auditors’ work programme and the results of independence. Approval of non-audit services. s Monitoring of the efficiency of the Internal s Control and risk management systems. Warning role with regard to the Chairman of the s Board in the event of detection of a substantial risk which in its view is not adequately taken into account. Task of monitoring the Group’s main risk s exposures and sensitivities. Review of the programme and objectives of the s Internal Audit Department and the Internal Control system methods and procedures used. Annual review of the section of the s Management Report on risk factors and Internal Control and risk management procedures. their audits. Monitoring of the Statutory Auditors’ s

Review of annual, interim results and balance sheet. s Review of Statutory Auditors’ Reports. s

Review of the Statutory Auditors' 2017 audit plan and the results of the audits carried out, their s recommendations and the follow-up actions taken, as part of the statutory audit of the accounts. Review of the audits carried out by the Statutory Auditors with regard to CSR information, s enlargement of the audit scope and improvement of data reliability making it possible to issue a voluntary reasonable assurance report. Approval by the Audit Committee of non-audit services. s Review of the update to the Internal Rules related to the missions of the Audit Committee s following European regulation (EU) No. 537-2014 and the order of 17 March 2016. Monitoring of Internal Audit activities, including CSR commitments. s Review by the Board of the measures taken to enhance Internal Control. s Review of the Vigilance plan (law No. 2017-399 on the duty to act with due care). s Review of the measures introduced to comply with the Sapin 2 law concerning transparency s and the fight against corruption. Monitoring of the project to comply with the European GDPR regulation (General Data s Protection Regulation). Review of the procedure for managing insider information (European Market Abuse s regulation). Review of legal risks and potential litigation and of major events that could have a significant s impact on L’Oréal’s financial situation and on its assets and liabilities.

Review of new payment methods. s Review of Digital performance. s

CHANGES PLANNED FOR 2018

Subject to a favourable vote by the Annual General Meeting of 17 April 2018 on appointments and renewals, the composition of the Audit Committee will be as follows: Mrs. Virginie Morgon (Chairwoman) • Mrs. Sophie Bellon • Mr. Axel Dumas • Mrs. Béatrice Guillaume-Grabisch • Mr. Georges Liarokapis* • Mr. Jean-Victor Meyers •

* The term of Mr Georges Liarokapis as Employee Director ends on 17 April 2018. It is up to CFE-CGC, the most representative union at L’Oréal in France, to renew the term of office of Mr Liarokapis or to appoint a new Employee Director for another term of four years.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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