The balance of powers on the Board of Directors principally rests on its coherent and harmonious composition and on the qualities of its Directors.
At 31 December 2021, the Board of Directors is made up of the Chairman and Chief Executive Officer, three Directors (one of whom is Vice-Chairman of the Board) from the Bettencourt Meyers family, two Directors (one of whom is Vice-Chairman of the Board) linked to Nestlé, seven independent Directors and two Directors representing the employees.
Thus 50% of the Board are independent Directors, who are highly committed and fully play their role given their backgrounds and experience. They all hold responsibilities at the highest level in major international groups, which allows them to understand all the dimensions of L’Oréal’s operations, clarify Board discussions and interact effectively with General Management.
All Board members participate in the discussions and are a driving force for ideas in terms of the smooth running of the Board. The diversity and complementarity of the Directors’ experience and expertise (entrepreneurial, financial, extra-financial, including human resources and sustainable development, industrial, digital, etc.) enable them to quickly and thoroughly understand the development issues facing the L’Oréal Group, the leader in the highly competitive, globalised cosmetics market in which the requirement to innovate and adapt is very high.
The establishment of Board Committees, their composition and responsibilities contribute to a good balance of power and are a point of attention for the Board of Directors. In fact, the Board has set up specialised committees to help all Directors carry out their main duties collectively. The term of office, composition and operating procedures of the Board are defined in its Internal Rules, which are published by the Board of Directors (see section 2.3.3. “Activities of the Board Committees” of this document).
All Committees have a high number of independent Directors: 60% for the Audit Committee and the Human Resources and Remuneration Committee, and 50% for the Nominations and Governance Committee. The Chairman of each of these Committees is independent. Only the Strategy and Sustainability Committee, the organisation of which is not regulated, is chaired by a non-independent Director within the meaning of the AFEP-MEDEF Code. Two Directors representing employees sit on two of the Board committees: one is a member of the Human Resources and Remuneration Committee and the other is a member of the Audit Committee. The Chairman of the Board of Directors is a member of, and chairs, the Strategy and Sustainability Committee. The Chief Executive Officer is not a member of any Committee.
These committees are completely free to draw up their respective agendas. They report on their work to the Board of Directors, whose meetings they prepare and to which they make proposals.
As part of its review of its activities at the end of 2021, the Board again emphasised the quality of the work and recommendations of its Committees, which helped to inform its decisions.
Since 2019, the Board of Directors has met in executive sessions, at one or two meetings per year.
The Board considers that these meetings, which are not attended by any corporate officers or any employees of the Group, contribute to good governance. Initially, the Chairman of the Board of Directors is asked to attend these meetings; after this, they may be held without his or her attendance.
As part of the annual assessment of the way the Board operates, each year Directors set themselves new objectives to improve the quality of their organisation. They seek to achieve optimum effectiveness and ensure that they have the necessary assets to carry out their duties successfully and with complete freedom to act.
