Attentive prevention of conflicts of interest
The Directors are required to act in all circumstances in the interest of the Company and of all its shareholders.
Every year, the Board of Directors assesses the situation of the Directors using the conflict of interest prevention process.
Each Director has the obligation to report potential conflicts of interest which could concern him/her and, in any event, must abstain from participating in the corresponding debates and deliberations.
The Internal Rules of the Board of Directors stipulate that the Chief Executive Officer is vested with the broadest powers to act in all circumstances in the name of the Company, in compliance with the limits set by the Board; however, transactions of a significant amount or falling outside the Company’s normal course of business are submitted to the Board of Directors (see section 1.2.2 of the Internal Rules of the Board of Directors).
Mr Nicolas Hieronimus exercises these powers within the limit of the Company’s purpose subject to the powers expressly granted by French law to Annual General Meetings and the Board of Directors.
He represents the Company in its dealings with third parties. The Chief Executive Officer communicates completely transparently with all the Directors and keeps them regularly informed of all aspects of the Company’s affairs and its performances. He is required to provide each Director with all documents and information required to perform their remit.
More specifically, the Chief Executive Officer provides the Board members with useful information in connection with the preparation of meetings, or at any time during the life of the Company if the importance or urgency of the information so requires. This provision of ongoing information also includes any relevant information concerning the Company, and in particular press articles and reports containing financial analysis.
The Chief Executive Officer gives the Board and its Committees the possibility to meet with the senior managers of L’Oréal within the strict framework of their remits and duties. In consultation with the Chief Executive Officer, the Board and the Committees may use external consultants if they consider it necessary.
The Board is informed, at the time of closing of the annual financial statements and the review of the interim financial statements or at any other time if necessary, of the Company’s financial position and cash position.
Thus, the Board has the resources it needs to manage, with complete freedom, the issues that concern it, in particular when this involves determining the strategic orientations of the company, ensuring and monitoring the implementation and overseeing the good management there of.
The Board provides the General Management with invaluable support for strategic decision-making through its reflections and the impetus it provides.
The Internal Rules of the Board stipulate the following duties of Mr Jean-Paul Agon, in his capacity as Chairman of the Board of Directors: “The Chairman of the Board of Directors organises and oversees the Board’s work and reports there on to the Annual General Meeting.
The Chairman sets the dates and the agenda for Board meetings and leads the discussions.
The Chairman is actively involved in defining the Company’s growth strategy and encourages and strengthens, inter alia, links between the Company and the main market players. The Chairman oversees the work of the Company’s bodies responsible for corporate governance and ensures, in particular, that the Directors are able to perform their duties. He may ask for the communication of any document or information that is likely to assist the Board of Directors in preparing for its meetings.
The Chairman of the Board must use his best efforts to promote the values and image of the Company at all times. He expresses his views in that capacity.
He is provided with the material resources required to perform his duties.
The Chairman of the Board takes care to develop and maintain a trustful and regular relationship between the Board and the General Management, in order to guarantee continuous, ongoing implementation by the General Management of the strategies defined by the Board.”
Taking into consideration Mr Jean-Paul Agon’s experience and expertise, as well as his in-depth knowledge of the Group and the beauty market, the Board decided to expand the duties entrusted to the Chairman. In all these specific missions, the Chairman acts in close collaboration with the Chief Executive Officer who alone directs and manages the Company’s operations.
Mr Jean-Paul Agon, as Chairman of the Board of Directors, provides his assistance and advice to the Chief Executive Officer, particularly in the implementation of the strategic orientations of the Company defined by the Board:
