Loreal 2011 Annual Report Download - page 33

31REGISTRATION DOCUMENT − L’ORÉAL 2011
Corporate governance
2
The Board’s composition and the way in which theBoard’s work is prepared andorganised
Information relating to corporate officers pursuant
to AnnexI of European Regulation No.809/2004
Family relationships existing between the corporate
officers or Directors (Article14.1 of the Annex)
Mrs.Françoise Bettencourt Meyers is Mrs.Liliane Bettencourt’s
daughter and Mr.Jean-Pierre Meyers’ wife.
No conviction or incrimination of the corporate officers
and Directors (Article14.1 of the Annex)
To the Company’s knowledge, over the last five years, the
corporate officers and Directors have not been convicted
for fraud, associated with a bankruptcy, receivership or
liquidation, or the subject of any official public incrimination
or sanction imposed by statutory or regulatory authorities
(including designated professional bodies) or a decision by
a court disqualifying them from acting as a member of an
administrative, management or supervisory body or from acting
in the management or conduct of the business of any issuer.
Potential conflicts of interest between the duties
ofthe corporate officers and Directors with regard
toL’Oréal, and their private interests and/or other duties
(Articles14.2 and 18.3 of the Annex)
Paragraph 2.2.1.2. above reviews the situation of each of the
Directors with regard to the independence criteria provided
for in the AFEP-MEDEF Code. The method of organisation and
modus operandi adopted by the Board would allow it, where
applicable, to prevent any wrongful exercise of control by a
shareholder, in particular due to the presence of six independent
D irectors on the Board of Directors. See also the paragraph7.3.5.
page212 which concerns agreements relating to shares in the
Company’s capital.
Information on service contracts with members
oftheadministrative bodies (Article16.2 of the Annex)
No corporate officers or Directors have a service contract with
L’Oréal or any of its subsidiaries providing for the granting of
benefits upon termination of such contract.
Stock market ethics
The Board took cognizance of the rules to be applied to prevent
insider trading, in particular regarding the periods during which
it is prohibited to trade in shares. It decided to amend its Internal
Rules accordingly and issued recommendations to General
Management to update L’Oréal’s Stock Market Code of Ethics
and the Fundamentals of Internal Control.
On the basis of the legal provisions, regulations and
recommendations, this Code points out that inside information
must only be passed on and used for professional purposes.
Inside information is precise information of a non-public nature,
which, if made public, could have a significant influence on
the share price. Such inside information may, in particular,
fall into one of three main categories: strategic, linked to the
definition and application of the Group’s growth strategy;
recurring, linked to the annual schedule for production and
publication of annual and interim financial statements, regular
releases or periodic meetings devoted to financial information;
exceptional, linked to a specific programme, project or financial
transaction.
The Stock Market Code of Ethics states that any person in
possession of inside information must proceed with the greatest
caution when trading in or enabling others to trade in L’Oréal
shares, and emphasises that any misconduct in this area may
result in criminal proceedings. The Internal Rules of the Board
point out specifically that a Director, who has permanent insider
status, is requested to refrain from trading in L’Oréal shares in
certain periods and when he has access to inside information.
Lastly, Directors are required to notify the AMF (the French
financial markets authority) of each transaction carried out by
themselves or their close relatives and friends relating to L’Oréal
shares. The Company reminds them regularly of this obligation
(see Summary of trading by Directors and corporate officers in
L’Oréal shares in2011 in section 2.4. page59 ).
Corporate officers and directorships held
bycorporate officers
In accordance with the AFEP-MEDEF Code of Corporate
g overnance of April2010which provides that “The staggering
of the terms of office must be organised in order to avoid renewal
all at once and favour the harmonious renewal of the Directors”,
the Annual General Meetings held in April2009 and April2010
renewed the terms of office of eleven Directors. The terms of office
of Mr.Werner Bauer and Mr.Jean-Pierre Meyers were renewed
in April2009 for a period of three years, while the terms of office
of Mr.Charles-HenriFilippi and Mr.Francisco Castañer Basco
were renewed in April2010 for periods of one and two years
respectively. The other terms of office were renewed for a period
of four years. These periods comply with the Company’s Articles
of Association.
Renewal of tenures as Director in2011
In2011, the Annual General Meeting held on April22nd renewed
the terms of office of Mrs.Liliane Bettencourt, Mrs.Annette Roux
and Mr.Charles-Henri Filippi for a period of four years.
Liliane Bettencourt (age:89 ), daughter of Eugène Schueller,
L’Oréal’s founder, created the Bettencourt Schueller Foundation
in1987, which she chairs. Liliane Bettencourt has been a L’Oréal
Board member since 1995. Everyone is aware of her lifelong
attachment to L’Oréal, and her respect for the Company’s men
and women and all the shareholders. Her presence on the Board
is an incitement to pursue the task of helping L’Oréal to grow.
Annette Roux (age:69 ) became the head of the Bénéteau
family business in1964, and proved her ability to build an
international group, a leader in its market sector. She was the
Chairperson and Managing Director from1976 to2005, and
has been Vice-Chairperson of the Supervisory Board since that
time. Embodying one of the biggest success stories in French
industry, Annette Roux, as a member of the L’Oréal Board of
Directors since 2007, has strengthened and enriched the Board
with her skills, her experience and her independence. She is also
President of the Bénéteau Corporate Foundation.