The Board ensures that shareholders and investors receive relevant information regarding L’Oréal’s strategy, particularly during meetings with major investors in accordance with the principles of stock market ethics and equal access to information. In 2021, the Chief Financial Officer presented the Board with a comprehensive assessment of “shareholder relations” (roadshows, conferences, events and meetings onspecific topics, particularly CSR issues, and e-meetings with the Individual Shareholder Consultation Committee). He provided details of changes in the expectations and focus of investors before and after the publication of results.
In 2021, the Board determined that ordinary contracts entered into under normal terms and conditions fulfill the ordinary conditions criteria, in accordance with the procedure implemented in 2020.
Based on the extensive work by and recommendations from the Human Resources and Remuneration Committee, the Board deliberated on the rules relating to the remuneration policy for directors and corporate officers for 2021, specifically the policy for the Chairman of the Board of Directors and the Chief Executive Officer. It determined the amount to be paid as annual variable remuneration in 2020 to the Chairman and Chief Executive Officer, in accordance with the remuneration policy adopted by the Annual General Meeting on 30 June 2020.
It approved the Performance shares award plan of 7 October 2021. On 7 October 2021, it approved the principle of increasing the Company’s capital reserved for employees in accordance with the 13th resolution approved by the Annual General Meeting of 30 June 2020 and the 20th and 21st resolutions approved by the Annual General Meeting of 20 April 2021, in view of the launch in 2022 of a third Employee Shareholding plan.
In October 2021, the Board interviewed the Chief Human Relations Officer on the Group’s Human Resources policy. In particular, the Board was updated on the diversity and gender balance policy deployed in the Company, specifically with regard to the gender parity in management bodies. The Chief Human Relations Officer stated that women made up 32% of the Company’s governing bodies, including the Executive Committee, and 48% of the Top 300 (strategic positions). On the proposal of General Management, the Board defined objectives for gender balance within management bodies. The goal is to maintain gender parity within the governing bodies each year, ensuring that employees of each gender do not represent less than 40%. The Board will be informed annually of the results obtained. The results for 2021 are also presented in section 4.3.2.6. “Promoting Diversity, Equity and Inclusion” of this document.
The Board of Directors defines the strategic orientations taking social and environmental needs into consideration. It also considers L’Oréal’s raison d’être, which it approved in February 2020.
The chart showing the L’Oréal business model can be found in section 1.2. “Business model: economic and corporate excellence to create lasting value for all” of this document.
The systematic and in-depth review, at each meeting, of the Group’s activities and results and net sales generated by Division, geographic zones, brand, and e-commerce, as well as an analysis of market share gains, enables the Directors to be immersed in the Company’s realities and to be continually informed of the problems faced by L’Oréal.
The Board is also informed throughout the year of the evolutions in the cosmetics market, the results of competitors and the Group’s relative positioning.
The Board was kept regularly informed of the consequences of the Covid-19 health crisis, particularly with regard to retail activity and the opening of outlets worldwide. The measures to support and assist employees were reported to the Board, with a special focus on the organisation of home working.
The Board regularly meets with the Group’s main executives and thus benefits from in-depth knowledge of the challenges specific to each business segment. It is able to forge a clear, independent opinion of the opportunities for the Group’s development over the next few years.
In February 2021, the Chief Ethics, Risk and Compliance Officer presented the Group’s ethical policy. He reiterated the importance of having an ethics policy, in particular with regard to Human Rights and the risks of corruption. He explained how these issues were perceived in the various regions of the world. He detailed the organisational structure implemented in the Group (networks of ethics champions, training and self-evaluation tools, charters, whistleblowing websites) and the roadmap for the current year.
The Chief Corporate Responsibility Officer presented L’Oréal’s CSR policy in April 2021. She presented the review of the Sharing Beauty with All 2013-2020 programme. She presented the Group’s new objectives of the L’Oréal for the Future programme for 2030 and the Directors were able to discuss the importance of these new commitments.
The Board meeting dedicated to the strategic seminar of June 2021 was designed to meet the needs expressed by Directors as part of the self-evaluation of the work of the Board conducted at the end of 2020. The first part of the meeting was devoted to an “e-visit” of three countries, i.e. China, India and the United States, as well as the Sub-Saharan Africa Zone. The second part reflected on Beauty 2030 (Strategic Consultation of June 2019) and Post-Covid Beauty (presentation by Nicolas Hieronimus in July 2020).
The Board also contributes to the development of strategy, by analysing the interest of acquisitions and the conclusion of licensing contracts. It studies their impact on the Company’s financial structure and its long-term development capabilities. In 2021, the Directors examined new projects, including the acquisition of the Japanese company Takami Co and an agreement to purchase Youth to the People, a US skin care brand based in California.
In July 2021, the Chief Financial Officer presented a review of acquisitions made over the past 10 years, particularly in terms of compliance with their original business plan. The Directors discussed the contribution of acquisitions to the Group’s growth and the increase in its operating profit. The qualitative contribution of these acquisitions (for example, the discovery of new models and technological innovations) was also analysed.
