2021 UNIVERSAL REGISTRATION DOCUMENT

1. Presentation of the Group integrated report

ACTIVITIES OF THE BOARD AND ITS COMMITTEES IN 2021

The Board of Directors fully assumes its role in defining the Group’s strategic orientations.

Thanks to an open and constructive dialogue with the General Management and regular meetings with management, the Directors are completely up-to-date with L’Oréal’s economic reality and fully informed of all the Company’s activities, its performances and the challenges it faces. They examine the main areas and opportunities for long-term development and acquisitions in particular.

The Directors make sure that the decisions taken contribute to implementation of the strategy.

Wishing to continually enhance its role to reflect on issues and drive strategic decision-making, in 2021, the Board carried out an evaluation of its modus operandi and organisation, as it has done every year since 1996 (see section 2.3.4. “Self-evaluation by the Board of Directors” of this document).

BOARD OF DIRECTORS

8 meetings in 2021

95% attendance rate

MAIN WORK IN 2021

  • Corporate governance:
    • Changes in the composition of the Board and Committees, preparation of draft resolutions on the renewal of terms of office and nominations; information on the expectations of investors and proxy advisors;
    • 2021 Annual General Meeting: monitoring the requirements for holding the meeting behind closed doors;
    • New governance structure from 1 May 2021: separation of the offices of Chairman and Chief Executive Officer;
    • Evaluation of the modus operandi of the Board; and executive sessions.
  • Strategic transaction approved by the Board of Directors: repurchase by L’Oréal of 4% of its own shares held by Nestlé.
  • Remuneration policy for executive corporate officers and Human Resources: definition of the remuneration policy applicable to the Chairman of the Board and the Chief Executive Officer; determination of the annual variable remuneration of Mr Jean-Paul Agon for 2020; Group employee remuneration policy; review of the diversity and gender balance policy and definition of objectives for gender balance within management bodies; report on the third worldwide shareholding plan.
  • Business activity and results: systematic review of sales by business segment, by zone and by brand; analysis of market share and competition; analysis of the development of e-commerce; regular update on the consequences of the Covid-19 health crisis and the actions taken.
  • Strategic issues in 2021: presentation of L’Oréal’s CSR policy for 2030; presentation of the Ethics policy and update on its roll-out within the Group; analysis of digital transformation and strategic challenges for L’Oréal; update on acquisitions conducted over the last 10 years; presentation on the activities of the Values Committee.
  • Strategic seminar held in June 2021: “e-visit” to three countries (China, India, United States) and the Sub-Saharan Africa zone. Continued reflection on beauty in 2030 and post-Covid beauty.

STRATEGY AND SUSTAINABILITY COMMITTEE

 AUDIT COMMITTEE NOMINATIONS AND GOVERNANCE COMMITTEE HUMAN RESOURCES AND REMUNERATION COMMITTEE
5 meetings – 100% attendance rate 4 meetings – 93% attendance rate 4 meetings – 100% attendance rate 4 meetings – 96% attendance rate
2021 MAIN ACTIVITIES 2021 MAIN ACTIVITIES 2021 MAIN ACTIVITIES  2021 MAIN ACTIVITIES

STRATEGY AND SUSTAINABILITY COMMITTEE
  • Analysis of sales, update on business activities, regular report on the consequences of the Covid-19 health crisis;
  • Update on changes in the markets and on competition;
  • Analysis of the performance of the latest product launches;
  • Review of the Group’s strategic development prospects;
  • Review of the latest sustainable development initiatives;
  • Review of the main acquisition projects, and review of recent acquisitions;
  • Review of the proposed credit line subject to ESG criteria;
  • Update on the brands.
 AUDIT COMMITTEE
  • Review of the accounts and financial position;
  • Risk review and monitoring;
  • Review of risk mapping and the changes in the Vigilance Plan and risk factors (URD);
  • Review of Internal Control and Internal Audit;
  • Monitoring of the business plan for acquisitions;
  • Approval of non-audit services;
  • Review of Statutory Auditors’ Reports;
  • Review of the transition plan following the expiry of the Statutory Auditors’ terms of office at the 2022 Annual General Meeting;
  • Data privacy: assessment of measures deployed;
  • Taxation: impact of the new international taxation system.
 NOMINATIONS AND GOVERNANCE COMMITTEE
  • Monitoring of implementation of General Management procedures from 1 May 2021: separation of the offices of Chairman and Chief Executive Officer;
  • Reflection on the composition of the Board and its Committees;
  • Review of succession and emergency plans;
  • Diversity policy applied to the Board of Directors: objectives and 2021 results;
  • Review of the independence of Directors;
  • Organisation and annual evaluation of the modus operandi of the Board;
  • Topical issues with regard to governance (Reports by the French Financial Markets Authority - AMF and the Haut Comité de Gouvernement d’Entreprise, etc.);
  • Review of the voting policies of the main investors and proxy advisors;
  • Implementation of the procedure for regular evaluation of current agreements concluded under normal terms;
  • Review of the Committees’ CSR obligations;
  • Presentation on the Values Committee.
 HUMAN RESOURCES AND REMUNERATION COMMITTEE
  • Analysis of the performance of the Chairman and Chief Executive Officer in 2020;
  • Recommendations on the 2021 remuneration policies, proposals concerning the variable remuneration structure and setting of objectives for 2021;
  • Recommendations on the 2022 remuneration policies for the Chairman of the Board and the Chief Executive Officer;
  • Analysis of the voting policies of the main investors and proxy advisors on remuneration issues;
  • Preparation of the Say On Pay resolutions (ex ante and ex post);
  • Long Term Incentive Policy (delivery of the 2017 Plan, preparation of the 2021 Plan, review of the draft resolution on performance shares for 2022);
  • Diversity: policy developed and results obtained;
  • Distribution of directors’ remuneration;
  • Review of the Group’s remuneration policy;
  • Project to launch the third global employee shareholding plan.