This structure will ensure the sustainability of the Group’s performance, values and commitments, as well as the quality of its governance.
The Board of Directors and Mr Nicolas Hieronimus benefit from Mr Jean-Paul Agon’s successful and recognised experience in both positions. The Board of Directors can count on his expertise in matters of governance to meet the growing expectations of the Group’s stakeholders.
Mr Nicolas Hieronimus will provide his expertise in the cosmetics market and his intimate knowledge of L’Oréal, as well as his vision of the future of Beauty, to implement the strategic orientations of years to come, take advantage of all the opportunities offered by a fast-changing world, adapt the Group and reinvent it in keeping with its values, commitments and purpose (raison d’être) to “Create the beauty that moves the world”.
The balance of powers on the Board of Directors principally rests on its coherent and harmonious composition and on the qualities of its Directors.
At 31 December 2022, the Board of Directors is made up of the Chairman and Chief Executive Officer, three Directors (one of whom is Vice-Chairman of the Board) from the Bettencourt Meyers family, two Directors (one of whom is Vice-Chairman of the Board) linked to Nestlé, seven independent Directors and two Directors representing the employees.
Thus 50%(1) of the Board are independent Directors, who are highly committed and fully play their role given their backgrounds and experience. They all hold responsibilities at the highest level in major international groups, which allows them to understand all the dimensions of L’Oréal’s operations, clarify Board discussions and interact effectively with General Management.
All Board members participate in the discussions and area driving force for ideas. The diversity and complementarity of the Directors’ experience and expertise (entrepreneurial, financial, non-financial, including CSR and HR/labour relations, industrial, digital etc.) enable them to quickly and thoroughly understand the development issues facing the L’Oréal Group, the leader in the highly competitive, globalised cosmetics market in which the requirement to innovate and adapt is very high.
The establishment of Board Committees, their composition and responsibilities contribute to a good balance of power and are a point of attention for the Board of Directors. In fact, the Board has set up specialised committees to help all Directors carry out their main duties collectively. The term of office, composition and operating procedures of the Board are defined in its Internal Rules, which are published by the Board of Directors (see 2.3.3.).
All Committees have a high number of independent Directors:60% for the Audit Committee and the Human Resources and Remuneration Committee, and 50% for the Nominations and Governance Committee. The Chairman of each of these Committees is independent. Only the Strategy and Sustainability Committee, the organisation of which is not regulated, is chaired by a non-independent Director within the meaning of the AFEP-MEDEF Code: the Chairman of the Board of Directors. The Chief Executive Officer is not a member of any Committee.
These committees are completely free to draw up their respective agendas. They report on their work to the Board of Directors, whose meetings they prepare and to which they make proposals.
As part of its review of its activities at the end of 2022, the Board again emphasised the quality of the work and recommendations of its Committees, which helped to in form its decisions.
Since 2019, the Board of Directors has met in executive sessions, at one or two meetings per year.
The Board considers that these meetings, which are not attended by any corporate officers or any employees of the Group, contribute to good governance. Initially attended by the Chairman of the Board, executive sessions then continue without him.
As part of the annual assessment of the way the Board operates, each year Directors set themselves new objectives to improve the quality of their organisation. They seek to achieve optimum effectiveness and ensure that they have the necessary assets to carry out their duties successfully and with complete freedom to act.
The Directors are required to act in all circumstances in the interest of the Company and of all its shareholders. Every year, the Board of Directors assesses the situation of the Directors using the conflict of interest prevention process. Each Director has the obligation to report potential conflicts of interest which could concern him/her and, in any event, must abstain from participating in the corresponding debates and deliberations.
The Internal Rules of the Board of Directors stipulate that the Chief Executive Officer is vested with the broadest powers to act in all circumstances in the name of the Company, in compliance with the limits set by the Board; however, transactions of a significant amount or falling outside the Company’s normal course of business are submitted to the Board of Directors (see article 1.2.2. of the Board’s Internal Rules).
Mr Nicolas Hieronimus exercises these powers within the limit of the Company’s purpose subject to the powers expressly granted by French law to Annual General Meetings and the Board of Directors. He represents the Company in its dealings with third parties.
(1) Excluding Directors representing the employees.
