Loreal 2011 Annual Report Download - page 47

45REGISTRATION DOCUMENT − L’ORÉAL 2011
Corporate governance
2
The Board’s composition and the way in which theBoard’s work is prepared andorganised
the implementation of a procedure for the preparation of
succession plans for the executive officers in the event of an
unforeseen vacancy and conducting the reflection process
with regard to the committees that are in charge of preparing
the Board’s work and preparing for the Board’s decisions with
regard to the updating of its Internal Rules.
Three Directors are members of this committee: Mr.Xavier
Fontanet (who joined the committee in May2011), an
independent D irector and Chairman of the committee, Mr.Jean-
Pierre Meyers and Mr.Peter Brabeck- Letmathe. These Directors
actively participate in c ommittee meetings, with complete
freedom of judgment and in the interest of all the shareholders.
The provision of the AFEP-MEDEF Code that recommends that a
majority of the Directors should be independent has not been
adopted inasmuch as the Company is controlled by two main
shareholders.
In2011, the c ommittee met four times in the presence of all its
members. The Chairman and Chief Executive Officer can attend
c ommittee meetings except with regard to any matters on the
agenda that concern him directly. The committee examined
certain aspects of the organisation and
modus operandi of the
Board of Directors. It looked at the legal situation of Mrs.Liliane
Bettencourt in light of her tenure as Director.
When, in2011, Sir Lindsay Owen-Jones, Chairman of the Board
of Directors since 2006 after holding the post of Chairman and
Chief Executive Officer from 1988 to 2006, confirmed that he
no longer wished to hold this office as from March18th, the
committee recommended to the Board that it reunify the duties
of Chairman with those of Chief Executive Officer, as all the
conditions were once again met to revert to reunified duties,
a governance model which is specifically adapted to L’Oréal
and its shareholder structure. The committee proposed to the
Board that it appoint Mr.Jean-Paul Agon as Chairman and
Chief Executive Officer and the Board decided to do so. It also
suggested to the Board to give Sir Lindsay Owen-Jones the
position of Honorary Chairman.
The Appointments and Governance Committee once again
drew the attention of the Board of Directors to the need to make
sure that its composition in2017 would be in line with the French
Law of January27th,2011 requiring the balanced representation
of women and men, namely a proportion of 40% of Directors of
the same gender. The Board of Directors is already in advance
of this law which provides for a proportion of 20% of women
members to be reached by 2014 and is doing everything it can
to gradually appoint more female Directors. Candidacies are
submitted to the Board to be included on the agenda for the
Annual General Meeting when the time comes.
The committee considered and proposed the conditions in
which the continuity of L’Oréal’s General Management would
be ensured if the Chief Executive Officer is unable to act.
As it does every year, the committee examined the independence
of L’Oréal’s Directors and made proposals to the Board in
connection with the publication of such information in the 2011
Registration Document. On the committee’s recommendation,
the Board of Directors considered that the Board had six
independent D irectors out of fourteen members. In the case
of Mr.Marc Ladreit de Lacharrière, who has been a Director
of L’Oréal for over 12years, it considered that his professional
experience and his freedom of judgment, combined with his
good knowledge of the Company, make a big contribution to
the Board’s discussions and decisions.
At the Board of Directors’ request, the committee also reflected
on the composition of the Board’s c ommittees and increasing
the presence of independent D irectors on several of them.
The committee reported to the Board on all its work.
The Human Resources and Remuneration Committee
The main remits of the Human Resources and Remuneration
Committee are in particular to make proposals with regard to
the remuneration of the Chairman of the Board of Directors
and that of the Chief Executive Officer, the total amount of
the attendance fees to be submitted to the Annual General
Meeting and their method of distribution, the implementation
of long-term incentive schemes such as for example, stock
option plans or plans for free grants of shares. The committee’s
role has been enlarged to include all the components of the
Human Resources policy such as, for example, labour relations,
recruitment, diversity, talent management and fostering
employee loyalty. The committee also makes sure that the rules
of ethical conduct, as set out in a Code of Conduct, and the
Group’s strong values, such as respect and integrity, are widely
disseminated, known and put into practice.
In2011, Mr.Charles-Henri Filippi, an independent D irector, was
appointed to the committee. Four Directors are now members
of the committee: Mr.Bernard Kasriel, an independent D irector
and Chairman of the committee, Mr.Jean-Pierre Meyers,
Mr.PeterBrabeck- Letmathe and Mr.Charles-Henri Filippi.
These Directors actively participate in c ommittee meetings,
with complete freedom of judgment and in the interest of all
the shareholders.
The provision of the AFEP-MEDEF Code which recommends that
a majority of the Directors should be independent has not been
adopted inasmuch as the Company is controlled by two main
shareholders. However, the Board of Directors decided to have
the composition of this committee evolve by appointing an
additional independent D irector as a member in2011, such
that half its members are independent.
In2011, the committee met four times in the presence of all its
members. The Chairman and Chief Executive Officer can attend
c ommittee meetings except with regard to any matters on the
agenda that concern him directly.
The committee made new proposals to the Board with regard to
the remuneration of the corporate officers, particularly after the
appointment of a Chairman and Chief Executive Officer (see
the section2.3. page53 ) and proposed to the Board to grant
stock options and to implement a plan for the conditional grant
of shares to employees. The grants are made after the closing
of the annual financial statements, they associate those who
have made big contributions with the future evolution of the
Group’s results and help to instil a Group spirit by fostering the
loyalty of employees. The stock options and free shares depend
on the fulfilment of performance conditions.