2023 universal registration document

1. Presentation of the Group – Integrated Report

ACTIVITIES OF THE BOARD AND ITS COMMITTEES IN 2023

The Board of Directors fully assumes its role in defining the Group’s strategic orientations.

Thanks to an open and constructive dialogue with the General Management and regular meetings with management, the Directors are completely up-to-date with L’Oréal’s economic reality and fully informed of all the Company’s activities, its performances and the challenges it faces. They examine the main areas and opportunities for long-term development and acquisitions in particular.

The Directors make sure that the decisions taken contribute to implementation of the strategy.

Wishing to continually enhance its role to reflect on issues and drive strategic decision-making, in 2023, the Board carried out an evaluation of its modus operandi and organisation, as it has done every year since 1996 (see subsection 2.3.5.).

BOARD OF DIRECTORS
8 meetings in 2023 – 96.1% attendance rate
MAIN WORK IN 2023
BOARD OF DIRECTORS
  • Corporate governance:
    • Changes in the composition of the Board and Committees, preparation of draft resolutions on the renewal of terms of office;
    • Dialogue with shareholders, investors and proxy advisors;
    • Evaluation of the modus operandi of the Board and executive session.
  • Remuneration policy, Human Resources, gender balance within the management bodies: discussion of the compensation policy for directors and corporate officers for 2023; determination of the compensation for directors and corporate officers for 2022 and evaluation of the performance of the Chief Executive Officer; determination of the performance share award plan of 12 October 2023 and decision to initiate a fourth worldwide employee shareholding plan; information and discussion on the Group’s Human Resources policy, including the remuneration policy, diversity policy and the setting of targets for gender balance within strategic positions.
  • Business activity and results: definition of the strategic orientations, taking into account social and environmental challenges; systematic review of the Group’s results and analysis of changes in the cosmetics market; analysis of proposed acquisitions, including the decision to acquire Aēsop; decision on the proposed partial contribution of assets, particularly with a view to spinning off some operating activities to L'Oréal France and L'Oréal International Distribution (see paragraph 1.3.4).
  • Strategic themes reviewed in 2023: CSR, Ethics Policy, Operations, Human Resources Policy, Digital (including AI), United States.
  • Strategic seminar held in June 2023: Geopolitical/geostrategic outlook for the next 10 years, China and South-East Asia, the situation in emerging markets, challenges of the metaverse. 
STRATEGY AND SUSTAINABILITY COMMITTEE AUDIT COMMITTEE NOMINATIONS AND GOVERNANCE COMMITTEE HUMAN RESOURCES AND REMUNERATION COMMITTEE
5 meetings – 96.7% attendance rate 5 meetings – 100% attendance rate 4 meetings – 93.7% attendance rate 4 meetings – 91.7% attendance rate
2023 MAIN ACTIVITIES 2023 MAIN ACTIVITIES 2023 MAIN ACTIVITIES 2023 MAIN ACTIVITIES
STRATEGY AND SUSTAINABILITY COMMITTEE
  • Health and geopolitical situation: situation in Russia/ Ukraine
  • Strategy:
    • Analysis of sales, update on business activities, market trends and competition, analysis of the performance of the latest product launches.
    • Review of proposed acquisitions and partnership projects.
    • Review of the Group’s strategic development prospects.
  • Sustainability:
    • Review of recent initiatives (L’Oréal for the Future programme), including the L’Oréal Climate Emergency Fund, the launch of the e-commerce environmental score for Garnier in France, refillable packaging initiatives and the digital sobriety plan.
    • Review of the plan to reduce carbon intensity in line with the SBTi "Net Zero" trajectory
 AUDIT COMMITTEE
  • Monitoring the process for preparation of financial information:
    • Review of annual and interim results, analysis of operating income by Division and Zone.
    • Treasury and financing.
    • Review of Statutory Auditors’ Reports.
    • Review of the Statutory Auditors’ audit plan for 2023.
  • Internal control, risks and compliance:
    • Review of the internal control systems.
    • Monitoring Internal Audit activities, including CSR and cyber security.
    • Risk mapping.
    • Update on legal risks, review of product quality and safety risks.
    • Monitoring the business plan for acquisitions, goodwill and impairment.
  • Monitoring the process for preparation of non‑financial information and non-financial risks:
    • Update on sustainability reporting regulations.
    •  Appointment of sustainability auditors.
    • Financial management procedures for commitments under the L’Oréal for the Future programme.
 NOMINATIONS AND GOVERNANCE COMMITTEE
  • Composition of the Board:
    • Reflection on the composition of the Board and its Committees in the short and medium term, and definition of the profiles sought.
    • Reflection on the skills matrix for directors.
  • Governance:
    • Analysis of 2023 voting policies for investors and proxy advisors.
    • Review of the independence of Directors.
    • Review of the results of the Board’s self-assessment.
    • Review of the executive session held in December 2022.
    • Values Committee: 2023 report.
  • Succession plans and emergency plans: annual review.
  • Regulatory updates and knowledge of market practices and expectations:
    • Review of “Say on Climate” resolutions in 2023.
    • Analysis of stakeholders’ expectations regarding the profile of independent directors.
 HUMAN RESOURCES AND REMUNERATION COMMITTEE
  • Remuneration of corporate officers:
    • Analysis of the voting policies of investors and proxy advisors concerning remuneration.
    • Remuneration of corporate officers in 2022 and 2023: analysis of 2022 performance, setting objectives and weightings for 2023 for the Chief Executive Officer.
    • Recommendations on corporate officer remuneration policies for financial year 2024.
    • Say on Pay: draft resolutions.
    • Pay ratios
  • Remuneration of Directors: Breakdown for 2023 and policy for 2024.
  • Annual review of ongoing regulated agreements.
  • Human Resources policy: Recruitment policy, senior employee policy, L’Oréal for All Generations programme, policy on diversity and equality in management bodies.
  • Long-term incentives policy:
    • Recording of performance relating to the ACAs Plan of 2019.
    • Preparation of the 2023 ACAs Plan.
    • Draft ACAs resolution for the 2024 AGM, including non‑financial performance criteria.