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Board committees

The Board has established three sub-committees: the Audit and Accounts Committee, the Appointments and Governance Committee, and the Remuneration Committee.

Audit and Accounts Committee

Siân Herbert-Jones (Chairman), Thierry Peugeot and Sin Leng Low (the 3 members are independent)

Composition and purpose as defined in the internal regulations.

The Audit and Accounts Committee must comprise three to five members of the Board of Directors and at least two-thirds of its members must be independent.

Tasks

“The purpose of the Committee is to prepare the decisions to be taken by the Board of Directors by examining the following issues and reporting on them to the Board:

By receiving reports:

Jointly and separately, in order to compare and combine different points of view, from:

  • the Finance & Management Control and Legal Divisions;
  • the Internal Audit and Control Management;
  • the external auditors.

Concerning the following points:

  • existing organization and procedures in the Group;
  • their actual functioning;
  • how the financial statements and the accounts are drawn up.

In order to reach:

  • by comparing and combining the points of view collected and using their business judgment based on professional experience, a reasonable judgment concerning:

    1. accounts and accounting principles used (their conformity in relation to the reference standards, a fair and complete reflection of the Group’s situation, transparency, readability, consistency over time);
    2. existence and functioning of control organizations and control procedures adapted to the Group, making it reasonably possible to identify and manage the risks incurred and to report on them;
    3. organization of the internal audit function, the plans for assignments and actions in the internal audit field, the findings of these assignments and actions and the recommendations and ensuing measures taken;
    4. choice and renewal of the external auditors, review of the tendering process, opinion on the selection of external auditors and the rotation of audit partners, review of proposed fees, information on the overall fees paid indicating the amount of fees paid for non-audit services.

The Committee:

  1. Collects the observations of the Executive Management on these various issues. It hears the Chief Executive Officer or Senior Executive Vice-Presidents at the Committee’s request or at the request of the persons concerned;
  2. Reports to the Board of Directors on its work, informing it of any problems that may be encountered, observations made to the Executive Management and progress made in relation to these observations.”

The Committee meets at least three times a year, and always before the Board meetings during which the annual or interim financial statements are reviewed.

An initial verbal report is given to the Board by the Committee Chairman. Written minutes of the meeting, approved by the Committee members, are transmitted to the Directors. The Committee may ask to convene Group employees. It may meet the Statutory Auditors or members of the Group Control Department in person. It may call on external experts for assistance. The Chairman and Chief Executive Officer does not attend meetings of the Audit and Accounts Committee.

Appointments and Governance Committee

Thierry Desmarest (Chairman, Lead Director), Karen Katen and Jean-Paul Agon (three members are independent).

Composition and purpose as defined in the Company’s internal regulations

The Appointments and Governance Committee must comprise three to five members of the Board of Directors and the majority of its members must be independent, according to the criteria adopted by the Board. The Chairman and Chief Executive Officer attends Committee meetings and is closely involved in its discussions. However, he may not be present for any discussions of the Committee relating to him personally. The Committee meets at least three times a year. The conclusions of Committee meetings are presented by the Committee Chairman for discussion and decision-making at the next Board of Directors’ meeting.

Tasks

Pursuant to the internal regulations, the tasks of the Appointments and Governance Committee are as follows:

  1. “Concerning the Board of Directors:
    • make proposals to the Board of Directors for renewal and appointment of Directors. This Committee looks for new members on the basis of its evaluation of the needs and developments expressed by the Board of Directors, and taking into consideration, in particular, the principle of attempting to achieve balanced representation of men and women on the Board of Directors;
    • make proposals to the Board of Directors for the creation and composition of Board Committees;
    • periodically evaluate the structure, size and composition of the Board of Directors and submit to it recommendations regarding any potential change;
    • the Committee periodically reviews the criteria applied by the Board to classify a Director as independent; once a year, it examines, on a case-by-case basis, the situation of each Director or each candidate for the duties of Director in light of the criteria applied and makes proposals to the Board of Directors.
  2. Concerning the Chairman and Chief Executive Officer or the Chief Executive Officer, as the case may be:
    • examine, as necessary and, in particular at the time of expiry of the term of office concerned, the renewal of the term of office of the Chairman and Chief Executive Officer, or the terms of office of both the Chairman and of the Chief Executive Officer;
    • examine the changes in these duties and provide for solutions for their renewal, where applicable;
    • examine the succession plan for members of the Executive Management applicable in particular in the case of an unforeseen vacancy;
    • examine periodically developments with regard to the Senior Executive Vice-Presidents, hear the Chairman and Chief Executive Officer (or the Chief Executive Officer) on the needs and the potential proposals for their replacement;
    • more generally, ensure that it is kept informed by the Chairman and Chief Executive Officer (or the Chief Executive Officer) of planned changes in Executive Management resources (and, in particular, the Executive Committee).
  3. Concerning governance:
    • examine, at the time of renewal of the term of office of the Chairman and Chief Executive Officer or of the terms of office of the Chairman and of the Chief Executive Officer, or when a request in that respect is made by Directors within the framework of the evaluation of the Board, whether it is appropriate to continue to combine these roles (or separate them);
    • monitor the changes in the rules of corporate governance, in particular within the scope of the code to which the Company refers and inform the Board of Directors of its conclusions; follow up on the application of the rules of corporate governance defined by the Board of Directors and make sure of the information given to the shareholders on this topic;
    • prepare the evaluation of the way the Board operates provided for by the internal regulations;
    • examine issues of ethics that the Audit and Accounts Committee, the Board of Directors or its Chairman may decide to refer to it;
    • ensure the proper functioning of the governance bodies and in particular the transmission of information requested by independent Directors;
    • assist, at their request, the Chairman and the Chief Executive Officer in their dealings with independent Directors, and be the instrument of dialogue aimed at preventing potential situations of conflict on the Board.

The Committee can request the assistance of outside experts if necessary. The Company shall provide the Committee in such a case with the corresponding funding.

The Lead Director, upon delegation from the Chairman of the Committee when he is not the Chairman of the Committee himself, conducts the Committee’s work concerning the above-mentioned points of governance: the Lead Director can formulate all proposals and make any suggestions that he considers to be necessary in this field. More particularly, the Lead Director coordinates, within the Committee, the implementation of the procedures aimed at identifying and analysing potential situations of conflicts of interest on the Board; he draws the attention of the Chairman of the Board of Directors to potential situations of conflicts of interest identified in this manner.

He reports on these matters to the Board of Directors.”

The powers and tasks of the Lead Director are described in the section on “Combination of the roles of Chairman and Chief Executive Officer” above.

Remuneration Committee

Jean-Paul Agon (Chairman), Thierry Desmarest and Annette Winkler (three members are independent).

Composition and purpose as defined in the internal regulations

The Remuneration Committee must comprise three to five members of the Board of Directors and the majority of its members must be independent. The Chairman and Chief Executive Officer may not be present for any deliberations of the Committee relating to him personally. The Committee meets at least three times a year. The conclusions of Committee meetings are presented by the Committee Chairman for discussion and decision-making at the next Board of Directors’ meeting.

Tasks

Pursuant to the internal regulations, the tasks of the Remuneration Committee are as follows:

  • “examine the performance and all the components of remuneration including stock options, or other forms of deferred remuneration, pension plans and, in general, the conditions of employment of the Chairman and Chief Executive Officer or both the Chairman and the Chief Executive Officer as well as the Senior Executive Vice-Presidents and make the corresponding recommendations to the Board of Directors;
  • propose, where applicable, the remuneration of the Vice Chairman or Vice Chairmen;
  • examine the remuneration and retirement policy applied to Executive Management and in particular to the Executive Committee;
  • examine the proposals by the Executive Management concerning the granting of stock options and other incentive systems related to the share price to other Group employees and propose their granting to the Board of Directors;
  • examine and propose to the Board of Directors the allocation of Directors’ fees among Board members.

The Committee can request the assistance of outside experts if necessary. The Company shall provide the Committee in such a case with the corresponding funding.”