Every year, the Board carries out the formal evaluation provided for by the AFEP-MEDEF Code of its composition, its organisation and its modus operandi, in particular in order to verify that, under these conditions, the agenda for its work duly covers the scope of its remits, that important questions have been appropriately prepared for and discussed and to measure the contribution made by each member to the Board’s work.
This evaluation is carried out within the framework of the AFEP‑MEDEF Code, to which the Company refers and market recommendations like those of the AMF.
The evaluation procedure for 2021 was reviewed by the Nominations and Governance Committee.
It was carried out with the help of a thematic interview guide, which was updated in October 2021 and sets out the principles stipulated in the AFEP-MEDEF Code and identifies the Board’s practices and market expectations. It enables each Director to ask questions about the operation of the Board and their personal contribution to its work and decisions. This guide was accompanied by a questionnaire prepared in 2020 with the assistance of the Spencer Stuart firm.
These documents, approved by the Nominations and Governance Committee before they were sent to each Director, served as a basis for the individual interviews arranged between the Directors and the Secretary of the Board.
These interviews concerned the Board’s composition, its organisation and its modus operandi.
The Directors were called upon to reconsider key governance issues, specifically: General Management structure, appointment of a Lead Director, the executive sessions organised without the presence of Executive Directors, and relations with shareholders in connection to Corporate Governance issues.
Committee activities were reviewed, in particular the procedure for evaluating current agreements, analysing the independence of Directors and any conflicts of interest.
The Directors expressed their opinion more specifically with regard to the quality and relevance of the information provided to them and on the agendas for the Board meeting, and gave their points of view on the Board’s involvement in the definition of L’Oréal’s strategy.
They formulated suggestions for improvements and submitted proposals on strategic issues that they would like to discuss in further detail in 2022.
The summary of these interviews, carried out by the Secretary of the Board, was submitted first to the Nominations and Governance Committee meeting on 6 December 2021, and, the next day, to the Board of Directors, followed by a debate between the Directors and decisions for 2022.
Firstly, with regard to the Board’s composition, the Directors considered it completely satisfactory and balanced. In 2021, the Board welcomed Mr Alexandre Ricard, Chairman and Chief Executive Officer of Pernod Ricard, and Nicolas Hieronimus, Chief Executive Officer of L’Oréal (see section 2.2.3 “Changes in corporate offices and directorships of Directors” of this document). The number of Independent Directors – who represent 50% of the Board - was deemed appropriate, given their profile and considerable freedom of expression. The Board is sufficiently diversified in terms of the age, profile and experience of Directors. The genders are represented equally. The Board has the required expertise and the Directors’ skillsets are complementary – particularly in terms of experience managing large companies. The international experience of Directors was highlighted. This diversity of profiles and experience corresponds to the requirements defined by the Board (see section 2.2.1.2. “Diversity policy applied to the Board of Directors: experienced Directors who complement one another” of this document). This diversity allows the Board to actively discuss the strategic issues facing the Group with the Chief Executive Officer, who sits on the Board, and to make decisions independently.
The Board considers that the procedure for onboarding new Directors is satisfactory (in particular in relation to the transfer of all necessary information documents, meetings with the Board Secretary, and the organisation of interviews with members of the Group’s Executive Committee). It allows new members to rapidly familiarise themselves with the strategic issues of the Company. At the Board’s request, a meeting with the Chief Ethics, Risk and Compliance Officer will be systematically included in the onboarding process.
