In summary, on 31 December 2023, seven members of the Board of Directors out of 14 (excluding the Directors representing the employees in accordance with the AFEP MEDEF Code) qualify as independent (i.e. 50% of the Board of Directors). It is specified that the following are not considered to be independent: Mr Jean Paul Agon (former executive corporate officer for less than five years and Director since 2006); Mr Nicolas Hieronimus (executive corporate officer); Ms Françoise Bettencourt Meyers, Mr Jean Victor Meyers and Mr Nicolas Meyers (Bettencourt Meyers family holding 34.73% of the share capital); Mr Paul Bulcke and Ms Béatrice Guillaume Grabisch (Nestlé holding 20.13% of the share capital).
Within the scope of French law and the rights and obligations of the Directors as defined in the Internal Rules of the Board of Directors of L’Oréal, and in accordance with the AFEP‑MEDEF Code, Directors are subject to compliance with the rules in force with regard to conflicts of interest and stock market ethics upon their appointment as a Director and throughout their term of office.
Directors are appointed, subject to approval from the Annual General Meeting, following a selection process. This process determines the Director profiles required by the Company in terms of skills, qualifications and experience needed to complement those of the Directors already appointed. Issues such as candidates’ availability, numbers of directorships held and independence are also considered (see 2.2.1.2.). Particular attention is also paid to directorships held in other companies; Directors are required to devote the necessary time and attention to their duties and limit the number of their directorships to ensure their availability (article 3.3. of the Internal Rules of the Board).
When joining the Board of Directors, each Director receives a copy of the Internal Rules of the Board and the Articles of Association of L’Oréal, the Stock Market Code of Ethics, the Code of Ethics etc. These codes adopted by the Company serve as a frame of reference for Directors in terms of the standards required by L’Oréal in this area. As soon as they take up their office, Directors will also receive support in the form of dedicated meetings with, in particular, the Chairman of the Board, the Chief Executive Officer, the Secretary of the Board and the Chairman of the Nominations and Governance Committee.
Members of the Board of Directors require the necessary objectivity to make an independent judgement on the conduct of the Company’s business. The balance of powers established within the Board allows its members to exercise independent judgement. The Board is composed of:
To maintain a high standard, the Board of Directors, based on the work of the Nominations and Governance Committee, shall ensure that, throughout their term of office, Directors are able to act in the best interests of the Company, with all the due diligence and care required and subject to a strict confidentiality and loyalty obligation.
Directors must keep the Board informed of the directorships they hold in other companies, including any involvement in Board Committees of such French or foreign companies. They are required to notify the Board of any situation that may constitute a conflict of interest, even if such conflict is only potential, and must refrain from participating in the corresponding deliberations.
In addition, each year all Directors must issue a declaration relating to potential conflicts of interest between their duties to L’Oréal and their private or professional interests, specifically with regard to other directorships and roles. Any relevant information disclosed in this way is made public. Based on these declarations, the Board of Directors has not identified any conflict of interests on the date these declarations were issued pursuant to Delegated European Regulation No. 2019/980 supplementing Regulation No. 2017/1129, known as “Prospectus 3”.
The Nominations and Governance Committee conducts an annual review of the summary table prepared by the Company of the financial flows that occurred during the financial year between L’Oréal and interested parties as defined by regulations in order to report to the Board of Directors as part of the regular procedure to evaluate current agreements signed under normal terms pursuant to Article L. 22-10-12 of the French Commercial Code. In case of doubts about the classification of an agreement, the Committee must verify that the transactions have been concluded in ordinary course of business and under normal conditions, so that the Board of Directors can implement the procedure for related-party agreements when necessary. In this case, the persons directly or indirectly interested in this agreement do not participate in the assessment. In accordance with the AFEP-MEDEF Code and the recommendations of the French financial markets authority (Autorité des marchés financiers – AMF), the Board of Directors, based on the work carried out by the Nominations and Governance Committee, also analyses each year any possible business relationships between L’Oréal and companies in which independent Directors hold directorships or perform functions, to ensure these relationships are not significant (see 2.2.1.4).
