The rules of procedure of the Supervisory Board provide that the Audit Committee, first set up in 2000, has a minimum of three and a maximum of five members chosen by the Supervisory Board from among its own members, including at least two thirds of independent members.
All members of the Audit Committee have the appropriate accounting, financial and auditing expertise, as evidenced by their past or current professional positions.
Its members are the following:
|Members of Audit committee||Date of first appointment||Expiry date of appointment|
|Nicolas Houzé *, Chairman||19 April 2018||2022|
|Elmar Heggen, Member||22 November 2006||2020|
|Mouna Sepehri *, Member
||19 December 2013||2020|
* Independent Member
The Audit Committee meets at least twice a year and has the following responsibilities:
• In relation to the financial statements:
– to review the annual financial statements prior to their submission to the Board;
– to monitor the relevance and consistency of the accounting principles and rules used for the preparation of the financial statements and to prevent any potential violation of these rules;
– to review the preliminary and interim results as well as the accompanying notes, prior to their publication,
– to monitor the financial reporting process and, if applicable, issue recommendations to safeguard its integrity and ensure the quality of the processes enables compliance with stock market regulations.
– as part of its review of the financial statements, to examine the scope of consolidation and, where relevant, the reasons for which companies are excluded from the scope.
• In relation to the external control of the Company:
– to issue a recommendation on the Statutory Auditors proposed for appointment by the general meeting to the Board. This recommendation is issued to the Supervisory Board. It also issues its recommendation on the renewal of the statutory auditor’s or auditors’ appointment;
– to monitor the completion by the Statutory Auditors of their assignment, taking into account the observations and findings of the H3C (French Statutory Auditors’ Supervisory Body) following the audits performed pursuant to Articles L. 821-9 and subsequent of the Commercial Code;
– to ensure compliance by the Statutory Auditors with the principles of independence, and to take all steps required to apply article 4-3 of Regulation (EU) No. 537/2014 (economic independence) and ensure compliance with the conditions of article 6 of this regulation.
• In relation to the internal control of the Company:
– to assess the Company’s and its subsidiaries’ internal control systems with internal control officers;
– to review with them the response and action plans in the field of internal control, the findings of these responses and measures, and the action that is required of them;
– to monitor the efficiency of internal control and risk management systems, as well as of the internal audit where applicable, regarding the procedures related to the preparation and processing of accounting and financial information, without it affecting its independence.
• In relation to risks:
– regularly review with the Executive Board of the Company the main risks to which the business is exposed as well as the significant off balance sheet commitments.
• In relation to conflicts of interests:
– to review and check the rules of procedure applicable to conflicts of interest, to the expenses of the management team members and to the identification and measurement of the main financial risks, as well as their application, and submit its assessment annually to the Board;
– during the review of the financial statements, probe any material transactions that could have generated conflict of interest.
• In relation to non-audit services provided by the Statutory Auditors:
– approve the service.
The Committee met 3 times in 2019. Its work included:
- the review of the parent company and consolidated financial statements;
- the review of the interim consolidated financial statements at 30 June and quarterly financial position at 31 March and 30 September;
- the review of off-balance sheet commitments;
- the 2020 budget;
- the review of the financial parts of the Registration Document;
- the review of the Group’s Sustainable Development Report;
- the monitoring of the treasury position and the working capital requirements of the Group;
- a follow-up of the year’s internal control assignments;
- the cyber-attack suffered on 12 October 2019.
- a review of the risk-mapping, including risks of a social and environmental nature;
- la revue des assurances du Groupe ;
- 2019 assignments and fees of the Statutory Auditors and the 2019-2020 audit plan;
- the tender process initiated ahead of the expiry of the terms of office of the two Statutory Auditors;
- the follow-up of financial reporting.
The Committee reported on its work to the Supervisory Board, which was duly noted. Minutes of every meeting are prepared and approved at the following meeting.
The attendance rate of its members was 80% in 2019.
The Audit Committee carries out an assessment of its own operation on an annual basis by filling out the Supervisory Board’s assessment questionnaire provided to all Board members, a section of which is reserved for the Audit Committee.
The 2019 assessment highlighted that:
– the composition of the Committee is appropriate;
– the Committee meets at sufficiently frequent intervals and the duration of the meetings is appropriate;
– the members of the committee receive appropriate information prior to each meeting.
The rules of procedure of the Supervisory Board provide that the Remuneration and Appointments Committee, first set up in 2000, must be made up of a minimum of two and a maximum of five members, selected from the members of the Supervisory Board, of whom more than half are selected from the independent members. The member who represents employees is not counted in this percentage.
The members of the Remuneration and Appointments Committee are the following:
|Nomination and Remuneration Committee members||Date of first appointment||Expiry date of appointment|
|Marie Cheval *, Chairwoman||19 April 2018||2022|
|Elmar Heggen, Member||19 April 2018
|Nicolas Houzé *, Member||25 April 2019||2022|
|Sophie de Bourgues**, Member
||5 November 2018
* Independant Member
** Member representing employees
As defined in the rules of procedure, the Remuneration and Appointments Committee meets at least once a year and has the following responsibilities:
- to propose recommendations to the Board on all components of remuneration, including the pension and benefits plan, benefits in kind and various financial entitlements of the Chairman and Vice Chair of the Board, the other Members of the Board and the members of the Executive Board. With respect to the latter two categories of personnel, it makes recommendations on the granting of stock options of the Company and the allocation of performance shares;
- to issue a recommendation on the total budget and terms and conditions of apportionment of attendance fees to be allocated to Board members for their terms of office;
- to ensure compliance with the Group’s individual and collective principles, values and code of conduct, applicable to all staff;
- to consider every candidate for appointment or replacement of any member of the Supervisory Board or the Executive Board;
- to prepare a succession plan for members of the Executive Board and the Chairman of the Supervisory Board;
- discuss the independence of Supervisory Board members;
- review the balance of the composition of the Supervisory Board in particular in accordance with the shareholding and gender distribution;
- annually evaluate the Board’s work in order to help draft the report on corporate governance;
- ensure the prevention of conflicts of interest that could arise within the course of corporate life.
The Remuneration and Appointments Committee also regularly reviews succession issues relating to Executive Board members in order to be able to propose solutions to the Supervisory Board in the event of a vacancy.
The Committee reviews these issues at the end of each three-year term of office of the Executive Board, and more specifically in the year that precedes it. Given that the current term of office expired on 20 February 2020, in 2019 the Committee reviewed the conditions for reappointing or changing the members.
In early 2019, as part of its preparatory work for the renewal of the Executive Board, the Remuneration and Appointments Committee recommended that the Executive Board propose to the Combined General Meeting of 25 April 2019 an amendment to the Bylaws to raise the age limit for Board members from 70 to 72, in order to give the Group greater flexibility in the implementation of the various scenarios envisaged regarding the replacement of the members and Chairman of the Executive Board.
This amendment to the Bylaws was 99.92% approved by said Meeting.
The Committee met four times in 2019 and ruled on:
- the calculation of the Executive Board members’ variable remuneration for 2018;
- the definition of objectives for the calculation of Executive Board members’ variable remuneration for 2019;
- the achievement of performance conditions for releasing the performance share allocation plan of 2017, with delivery on 28 July 2019, and 2018, with delivery on 26 July 2020;
- the fulfilment of the performance conditions for the LTIPs which require the attainment of a value creation target over a cumulative three-year period;
- the conditions for the annual allocation of performance shares;
- the actual fulfilment of performance conditions required for the payment of severance pay to Christopher BALDELLI;
- the co-option of new members of the Supervisory Board;
- approval of the method for breaking down the fixed remuneration amount allocated to members of the Supervisory Board.
The Committee reported on its work to the Supervisory Board, which took note of it and followed all of the Committee’s recommendations.