In October 2021, the Directors welcomed the Chief Digital and Marketing Officer of L’Oréal. She provided an overview of the Group’s digital transformation, which began in 2010. She explained the consequences of the Covid-19 health crisis, which has ramped up digitalisation worldwide. The Directors were able to discuss the strategic challenges related to this revolution and the development prospects for the Group that will arise from those challenges.
Lastly, in December 2021, the Board heard from the Deputy Chief Executive Officer. She reviewed the activities of the Values Committee, which was set up in 2021 at the request of the Board of Directors. The Chief Executive Officer, Deputy Chief Executive Officer in charge of Research, Innovation & Technology, Chief Ethics, Risk and Compliance Officer, Chief Corporate Sustainability Officer, Chief Human Relations Officer and Chief Corporate Affairs and Engagement Officer all sit on this committee. The following Values were restated, namely: integrity and ethics, human and social progress, diversity and inclusion, corporate social responsibility and championing the cause of women. The Group’s policies were reviewed and discussed with regard to how they reflect its values.
The Board of Directors of L’Oréal met on 5 November 2021, without the presence of the Directors linked to Nestlé and to the Bettencourt Meyers family, to determine its position in the event that L’Oréal were to receive an offer to repurchase Company shares held by Nestlé. Consequently, the Board set up an ad-hoc committee and, based on the recommendations of the said committee, voluntarily appointed an independent expert (Ledouble firm), in line with governance best practice and AMF guidance relating to such transactions (i.e. Nestlé’s potential decision to reduce its shareholding in the Company’s capital and offer L’Oréal the possibility to repurchase these shares).
The ad-hoc committee was composed of four members (of which three were Independent Directors) and met four times between 5 November and 7 December 2021. The remit of its first meeting was to recommend the appointment of an independent expert to the Board; at subsequent meetings, its role was to monitor the satisfactory progress of the work and to report to and assist the Board in assessing the merits of any potential project.
At the meeting of L’Oréal’s Board of Directors on 7 December 2021, after reading the conclusions of the independent expert, the Directors unanimously approved a strategic transaction consisting of the repurchase by L’Oréal, as part of its share buyback programme, of 22.26 million of its own shares – representing 4% of its capital – from Nestlé. Board members linked to Nestlé and from the Bettencourt Meyers family did not take part in the discussions or votes.
The Board considered that the Nestlé transaction was in the best interest of L’Oréal and all of its shareholders. It constitutes a new strategic milestone in reinforcing the shareholder stability of L’Oréal. (see section 7.3.2. “Changes in allocation of the share capital and voting rights over the last three years” of this document).
The financial position and the cash position are reviewed at least twice a year at a Board meeting, when the annual financial statements are approved and when the interim financial statements are reviewed, or at any other time if necessary. The balance sheet structure is solid.
Every year, it reviews the agreements concluded and authorised during previous financial years and which continued in force.
As attested to by the preparatory work of its Committees (see below), the Board also analyses other aspects of strategy, the Group’s economic and financial management and the Company’s commitments in terms of corporate social responsibility. The Committees’ work systematically gives rise to a report presented by their Chairman/Chairwoman at Board meetings.
The Board’s debates and decisions are assisted by the work performed by its Committees, which report to it after each of their meetings. The remits of each Committee are described in detail in the Internal Rules of the Board of Directors.
The Board’s Committees act strictly within the framework of the remits given to them by the Board. They actively prepare for its work and make proposals but they do not have any decision-making powers. All the Directors who are members of a Committee participate in Committee meetings with complete freedom of judgement and in the interest of all the shareholders.
In 2021, the Committees were once again tasked with preparing the Board’s deliberations. The composition of these Committees, their remits and their work in 2021 are described in detail below.
