SCH2017_DRF_EN_Livre.indb

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Corporate governance report Board committees (composition, operating procedures and activities)

Human Resources and CSR committee

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Composition in 2017 The internal regulations and procedures of the board of directors stipulate that the Human Resources and CSR committee must have at least 3 members. This committee is composed of 5 members: Ms. Linda Knoll, Chairperson, Mr. Willy Kissling, Ms. Cathy Kopp, Ms. Xiaoyun Ma (since April 25, 2017), and Mr. Henri Lachmann. As of December 31, 2017, 67% of the Human Resources and CSR committee consists of independent directors (employee director and non-voting member excluded as per the AFEP/MEDEF Corporate Governance Code). Operating procedures The committee meets at the initiative of its Chairman or at the request of the Chairman and CEO. The agenda is drawn up by the Chairman, after consulting with the Chairman and CEO. The committee shall meet at least 3 times a year. The committee may seek advice from any person it feels will help it with its work. The Group Human Resources Director, Mr. Olivier Blum is the secretary of the committee. Responsibilities The committee develops proposals to the board of directors on: E the establishment of stock purchase or subscription options plans, the allocation of free/performance shares, and the monetary value of options or shares allocated to all of the eligible corporate officers, included executive corporate officers. The committee shall formulate projects on proposals made by general management on: E compensation for members of the Executive Committee; E principles and conditions for determining the compensation of Group executives.

The committee shall be informed of any nomination of members of the Executive Committee and of main Group executives. It shall examine succession plans for key Group executives. The committee prepares for the board of directors’ deliberations on (i) employee shareholder development, (ii) reviews made by the board on social and financial impacts of major re-organization projects and major Human Resource policies, (iii) monitoring management of risks related to Human Resources and (iv) examining the different aspects of the Group’s CSR policy, including the policy on the equal treatment of men and women. Activities in 2017 The committee met 3 times in 2017. The attendance rate of directors who are members of the committee was 93%. It drew up proposals for the board of directors on: E the 2017 annual long-term incentive plan and the implementation of an annual performance share plan for the newcomers; E the 2018 long-term incentive plan; E the launch in 2018 of a new Group employee share issue (Wesop 2018). The committee also reported to the board on: E the review of the compensation, performance and succession plans of Executive Committee members; E the review of the Talent attracting and retaining policy; E the review of gender diversity and pay equity policy; E the CSR performance including the new Planet & Society Barometer. It reported on its work to the board’s meetings of February 15, October 25 and December 14, 2017.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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