2023 universal registration document

2.1. Framework for the implementation of corporate governance principles

2.1.1. AFEP-MEDEF Code: the reference Code

The Code of Corporate Governance to which the Company refers is the AFEP-MEDEF Code. This chapter includes ⁽¹⁾ In accordance with the provisions of Article L. 225-37, section 6 of the French Commercial Code.a specific section of the Management Report on corporate governance and reports on the following, in particular:

• the Board’s composition and application of the principle of balanced gender representation on the Board;
• the ways in which the Board’s work is prepared and organised;
• the compensation policy for directors and corporate officers;
• information relating to the remuneration and benefits of any kind for directors and corporate officers during the previous financial year pursuant to Article L. 22-10-9 of the French Commercial Code; and
• limitations placed by the Board of Directors on the powers of the Chief Executive Officer.

The other information included in the particular section of the Management Report dedicated to corporate governance is published in chapter 7, specifically:

• the table summarising the authorisations in force granted by the Annual General Meeting (see subsection 7.2.2.);
• the special rules for shareholder participation in the Annual General Meeting or the provisions of the Articles of Association providing for these rules (see subsection 7.1.4.); and
• the elements with the potential to have an impact in the event of a public offer for the purchase or exchange of the Company’s securities (see section 7.3.).

In accordance with the recommendations of the AFEP‑MEDEF Code, this chapter identifies, in a summary table, those provisions of this Code which were not applied and explains the reasons for that choice (see section 2.5.).

2.1.2. Balance of power within the Board of Directors

2.1.2.1. General Management procedures: Separation of the functions of Chairman of the Board and Chief Executive Officer

L’Oréal has a method of corporate governance that is suited to its specificities and is part of a constant quest for progress. The procedures for exercising the General Management of L’Oréal have always been decided in the best interest of the Company and with the constant concern that the mode of governance chosen will make it possible to optimise the Group’s performance and to create the most favourable conditions for its long-term development.

Between 2006 and 2011, the duties of Chairman of the Board of Directors and those of Chief Executive Officer were separated, with Sir Lindsay Owen Jones assuming the functions of Chairman and Mr Jean-Paul Agon those of Chief Executive Officer. In 2011. The Board of Directors decided to merge these positions and to appoint Mr Jean Paul Agon as Chairman of the Board of Directors responsible for the Company’s General Management (Chairman and Chief Executive Officer of L’Oréal), roles that he held until 30 April 2021.

The Board of Directors decided to separate the functions from 1 May 2021, appoint Mr Nicolas Hieronimus as Chief Executive Officer and renew Mr Jean Paul Agon’s mandate as Chairman. The Board reiterated this decision on 21 April 2022 on the occasion of the renewal of term of office as a Director of Jean-Paul Agon.

Mr Nicolas Hieronimus joined L’Oréal 36 years ago. He held various positions in marketing before being named to General Management (L’Oréal Paris France, L’Oréal Paris World and L’Oréal Mexico). In 2008, he was appointed General Manager of the Professional Products Division and joined the Executive Committee. In January 2011, he was appointed Chief Executive Officer of L’Oréal Luxe, a role that he held until the end of 2018. In 2013, he became President of the Selective Divisions (Luxe, Active Cosmetics, Professional Products). He was named Deputy CEO in charge of Divisions in May 2017.

This structure seeks to ensure the sustainability of the Group’s performance, values and commitments, as well as the quality of its governance.