2024 universal registration document

2.1 Framework for the implementation of corporate governance principles

2. Corporate governance

2.1 Framework for the implementation of corporate governance principles

This chapter details the conditions under which the Board of Directors’ work is prepared and organised and includes a summary of how the Board's organisation ensures a balance of powers. The Internal Rules of the Board of Directors are appended to this chapter in full. It includes the components of the remuneration of corporate officers as well as all trading in L’Oréal shares reported by corporate officers in 2024 together with the remuneration policy, pursuant to Article L. 22-10-8 of the French Commercial Code (Code de commerce).

2.1 Framework for the implementation of corporate governance principles

2.1.1 AFEP-MEDEF corporate governance code

The Company uses the AFEP-MEDEF Code as its corporate governance code of reference.

This chapter includes(1) the corporate governance section of the Management Report and sets out the following:

  • the composition of the Board of Directors, including how gender balance is ensured;
  • the conditions under which the Board of Director’s work is prepared and organised;
  • the remuneration policy for corporate officers;
  • information relating to the remuneration and benefits of any kind for corporate officers during the previous financial year, pursuant to Article L. 22-10-9 of the French Commercial Code; and
  • restrictions imposed on the powers of the Chief Executive Officer by the Board of Directors.

The other information included in the corporate governance section of the Management Report can be found in chapter 7(2), in particular:

  • the summary table of authorisations in force granted by the Annual General Meeting (see section 7.2.2);
  • the rules for shareholder participation in Annual General Meetings, or the provisions of the Articles of Association providing for these rules (see section 7.1.4); and
  • factors that could have an impact in the event of a public tender or exchange offer for the Company’s securities (see section 7.3).

In accordance with the recommendations of the AFEP‑MEDEF Code, a summary table in this chapter identifies the provisions of the Code which were not applied and outlines why this was the case (see section 2.5).

This chapter also includes information about the work carried out by the Board of Directors and the Board Committees on sustainability (see section 2.3.4). Information about the Board of Directors’ oversight of sustainability disclosures is also provided in the Sustainability Report in chapter 4 of this Universal Registration Document, particularly in section 4.1.1.

2.1.2 Balance of powers within the Board of Directors

2.1.2.1 General Management procedures: separation of the roles of Chairman of the Board and Chief Executive Officer

L’Oréal's corporate governance structure that is suited to the Group's specificities and is part of a continuous progress approach. L’Oréal's General Management procedures have always been decided in the best interests of the Company, and attention is constantly focused on ensuring that the governance structure chosen optimises the Group’s performance and creates the most favourable conditions for its long-term development.

Between 2006 and 2011, the roles of Chairman of the Board of Directors and Chief Executive Officer were separated, with Sir Lindsay Owen-Jones holding the role of Chairman and Jean-Paul Agon the role of Chief Executive Officer. In 2011, the Board of Directors decided to combine these positions and appoint Jean-Paul Agon as Chairman of the Board of Directors and Chief Executive Officer of L’Oréal, a position that he held until 30 April 2021.

The Board of Directors decided to separate these positions from 1 May 2021, appointing Nicolas Hieronimus as Chief Executive Officer and renewing Jean-Paul Agon’s term of office as Chairman of the Board. The Board reiterated this decision on 21 April 2022 when Jean-Paul Agon was reappointed as a Director.