The Directors who represent employees play an active role on the Board and committees on which they are members. They have proposed the creation of an in-house guide for new L’Oréal Directors representing employees to enable these new Board members to benefit from the experience and skills they have gained from eight years in office.
The composition of the Committees is considered appropriate, with the appropriate Directors serving on each committee.
With regard to the functioning of the Board, it was noted that all Directors are diligent, active and committed and that each Board member contributes fully. It operates as a collegial body. Independent Directors are deeply committed and fully assume their role by questioning General Management. Discussions are free and frank. and Directors can express themselves in a positive environment of mutual trust. The Chairman is open and transparent and encourages discussion and in-depth debate. The Chief Executive Officer communicates transparently, keeps Directors informed of the Company’s performance and provides in-depth answers to their questions. He highlights the accomplishment of his management team, which appears regularly at Board meetings, giving Directors the opportunity to get to know L’Oréal’s senior managers and appreciate their expertise in their areas of responsibility. The Board dynamic is positive and there is excellent interaction between the Directors, the Chairman of the Board and the Chief Executive Officer. Directors expressed a high level of confidence in the Chairman and the Chief Executive Officer.
The Board Committees work well and produce well thought-out documents. The Directors believe that issues are handled by these committees in a serious and sound manner. The reports to the Board are comprehensive and detailed. As a result, the Board is able to make its decisions with complete confidence on the basis of Committee recommendations.
The Strategy and Sustainability Committee works smoothly with good discussions. It is chaired by the Chairman of the Board, who conducts the work competently and objectively. The Chief Executive Officer is invited to each of its meetings and contributes actively to the quality of discussions. The Directors considered that they had all the necessary information to make the proper recommendations to the Board regarding strategy and the monitoring of its implementation. For example, the Group’s business activities, any planned acquisitions and the Group’s results and those of its competitors were examined in depth. CSR issues, which are an integral part of the L’Oréal strategy, are systematically discussed at each meeting with the Chief Corporate Responsibility Officer. These discussions are considered essential by the Committee members.
The Audit Committee is managed very well, with work that is unanimously praised. Directors understand the balance between compliance and business matters. Performance in relation to CSR topics and the monitoring of non-financial data is good but there is room for further improvement. The high level of professionalism and transparency of management was highlighted.
The Human Resources and Remuneration Committee is well-prepared, and the work is anticipated sufficiently well in advance. Committee members receive the right level of information to enable them to make the correct recommendations, particularly regarding the remuneration of directors and corporate officers. They were pleased that HR policy topics were regularly discussed at the Committee meetings and would like to further explore issues relating to diversity and upcoming changes in working practices.
The quality of the work undertaken by the Nominations and Governance Committee was recognised, particularly with regard to the selection of new Directors, which was anticipated sufficiently in advance. The separation between the functions of Chairman of the Board and Chief Executive Officer was implemented very smoothly. Emergency plans are reviewed and updated regularly. Annual information on the Top 100” executives is a good idea.
The organisation, duration and frequency of Board meetings are considered satisfactory. The confidential nature of discussions and decisions – of which attendees are reminded at the start of each meeting – is fully respected. Directors believe that an effort has been made to respect their schedules, but draw attention to the fact that this should not have a negative impact on presentations. Respecting the balance of agendas is considered to be essential. Meetings organised via videoconference (up to and including July 2021) due to the Covid-19 health crisis were a success. However, face-to-face meetings – if the health situation allows – remain the preferred option.
The Directors considered that the information provided by the Board was satisfactory, comprehensive, and sufficiently detailed. Making documentation available prior to Board or Committee meetings boosts the quality of the debates. Some Directors would like to receive presentations much earlier before the meetings to improve discussions and the decision-making process. Subject to the confidentiality requirements and deadline constraints to which the Company is subject, this wish will be taken into account in 2022. Expanding the use of the Nasdaq Boardvantage secure digital platform could assist in this area.
The agendas for the Board meetings are appropriate and cover all issues.
The Directors appreciate the Chief Executive Officer’s detailed presentation on sales, the markets and competition, e-commerce and Travel Retail at each Board meeting, as it enables Directors to be immersed in the operational business of the Company and monitor performance.
Presentations from L’Oréal managers were organised in order to meet the needs of Directors, as expressed during the self–evaluation of the modus operandi of the Board in 2020. Their presentations were of high quality, well-prepared, comprehensive and transparent. They provided an excellent insight into the vision and strategy of L’Oréal and facilitated discussions with the General Management. Directors stressed the importance of allowing sufficient time for questions and discussions.
The Board meeting dedicated to the strategic seminar in June 2021 was greatly appreciated and deemed extremely rewarding, as considerable information was shared during the process. Its agenda was drawn up in accordance with the wishes expressed by the Directors: presentations on the activities of three countries, China, India and the United States, and one geographic zone, Sub-Saharan Africa. There were also presentations on long-term transformations, particularly those brought about by the Covid-19 health crisis, to be achieved by 2030.
Concerning acquisitions, the Directors are satisfied with the way in which projects are presented and discussed. They are in line with the Group’s strategy. General Management listens to the opinions of the Directors. The monitoring of acquisitions by the Board and the Audit Committee was highly appreciated this year. Directors believe that this should become a regular occurrence.
The now-annual presentation of Digital issues by the Chief Digital and Marketing Officer is considered to be essential to obtain a better understanding of the Group’s strategic challenges.
