| A vigilant and balanced Board of Directors
Vigilance and balance inspire L’Oréal’s governance. The Board of Directors constantly ensures that its organisation is adapted to changes in the group. The separation of roles between Chairman and Chief Executive Officer, decided in 2006, is proving satisfactory. At the end of 2007, the Board decided to split the “Management and Remuneration”
Committee into two separate committees, one to select new Board members and corporate officers for appointment by the Board, and the other to determine the remuneration of general management. This organisation ensures the harmonious development of the group.
 Responsible and experienced directors
The L’Oréal Board has 14 members. Drawing on their commitment, diversity and highly complementary professional experience, the directors take an active part in debates, have complete freedom of judgement and great availability. All directors have the same fiduciary duty to act with due care and attention, and to strictly respect the collegial nature of the decisions made by the Board.
There are six members from the majority shareholders, three of whom represent Mrs Bettencourt and her family and three represent Nestlé. The two Vice-Chairmen of the Board respectively represent the two parties. Alongside the Chairman and the Chief Executive Officer, six other directors meet the independence criteria advocated by the recommendations in force, and one of them has been a director for over 12 years.
Composition
Systematic self-evaluation
Each year the Board carries out an assessment of its composition, organisation and modus operandi. It considers new avenues of possible progress and makes any improvements it considers appropriate.
In 2007, the Board met five times with an average attendance rate of 91%. Many of the directors also attended the Annual General Meeting. In 2007, the Board of Directors firstly expressed satisfaction with its organisation, with the separation of the roles of Chairman and Chief Executive Officer, and the content of its meetings, as it considers that these have continued to improve in quality. It takes a more wide-ranging look at strategy, and the directors take the view that they have a better knowledge of businesses, markets and competition.
In accordance with its wishes, the Board was provided in 2007 with regular and reliable information about the group’s business activities. The directors however still want to improve the quality and broaden the scope of their debates even further, by receiving prior information which is targeted and relevant in view of the decisions that the Board is being asked to take.
Ensuring strict confidentiality
The directors, who have permanent insider status, apply strict rules to themselves with regard to the confidential information in their possession. In this respect, they meet the requirements of the law and comply with the preventive measures taken by L’Oréal in relation to its employees, particularly within the scope of the Insider Trading Rules and the Internal Control procedures.
The improper use and transmission of insider information must be prevented, and investments in the company’s shares must be carried out within a secure framework.
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