1.2.1. Forms of General Management
General Management of the Company is carried out under the responsibility of either the Chairman and Chief Executive Officer, or by another individual with the position of Chief Executive Officer where the two roles are separate. French law does stipulate whether the positions of Chairman of the Board and Chief Executive Officer must be one role or two separate roles, meaning the Board is free to choose between either organisational structure for its General Management, depending on which is better suited. Whether General Management is carried out by a Chairman and Chief Executive Officer or a Chief Executive Officer, the Board has the same prerogatives. It may in particular take all specific measures aimed at ensuring an ongoing balance of power.
1.2.2. Powers of General Management
General Management, which may be carried out by the Chairman and Chief Executive Officer or by a Chief Executive Officer, is granted the broadest powers to act in the name of the Company in any circumstances. It must exercise these powers within the limit of the Company’s corporate purpose subject to the powers expressly granted by French law to General Shareholders’ Meetings and the Board of Directors.
The Board has the possibility limit the powers of General Management. Thus, transactions which may materially impact the scope of consolidation of the Company, in particular, transactions involving an amount in excess of €250,000,000 and all new transactions which are outside the normal course of business for an amount in excess of €50,000,000, must be submitted to the Board. In any event, the Board of Directors must be informed of the conclusion and implementation of all transactions.
General Management represents the Company in its dealings with third parties.
Upon a proposal by the Chief Executive Officer, the Board may appoint one or more individuals responsible for assisting the Chief Executive Officer, who will hold the corporate office of Deputy Chief Executive Officer(s).
1.2.3. Duties of General Management
Whatever the form of organisation chosen (Chairman and Chief Executive Officer or Chief Executive Officer), General Management is required to provide each Director with all the documents and information they require to carry out their duties.
More specifically, General Management provides Board members with information that may prove useful as they prepare meetings, or whenever the importance or urgency of the information so requires. This provision of ongoing information also includes any relevant information concerning the Company, and in particular press articles and reports containing financial analysis.
General Management allows Board and its Committees to meet with senior managers at L’Oréal, within the strict framework of their duties. In consultation with General Management, the Board and the Committees may use external consultants if they consider it necessary.
The Board is informed of the Company’s financial position and cash position at the close of the annual financial statements and the review of the interim financial statements, or at any other time it is necessary to do so.
The Directors of the Company:
This freedom of judgement enables them in particular to participate, completely freely, in the decisions and work of the Board, and, where applicable, its Committees.
2.1.1. Independence
The Board reviews the independence of each of its members every year, after obtaining the opinion of the Nominations and Governance Committee, in particular in light of the independence criteria in the AFEP-MEDEF Code and taking L’Oréal's specific needs into account. The findings of this evaluation are reported to the shareholders and made available to the general public.
2.1.2. Diversity
The Board focuses closely on its targets in terms of composition, for both itself and for its Committees, in particular in terms of gender equality, nationalities and a diverse range of skills. The objectives, terms and conditions, and results of its policy in this area are made public in the Corporate Governance Report and included in the Universal Registration Document.
2.1.3. Terms of office
The length of the term of office of Directors is four years. However, terms of office are staggered in order to avoid renewing too many Directors at once and instead renew Directors harmoniously.
In principle, it is agreed by the Board members that Directors are to resign from the Board before the Annual General Meeting following their 73rd birthday and that they not stand for re-appointment if this means they will not be able to carry out their duties for at least two years.
In any event, in accordance with French law and the Articles of Association, the total number of Directors who are over 70 years of age may not exceed one-third of the Directors in office.
The Board of Directors must elect a Chairman from among its members.
The Chairman of the Board organises and oversees the Board’s work and reports thereon to the Annual General Meeting.
The Chairman sets the dates and the agenda for Board meetings and leads the discussions.
The Chairman is actively involved in defining the Company’s growth strategy and encourages and strengthens, inter alia, links between the Company and the main market players.
