Hermès - Registration Document 2016

2016 REGISTRATION DOCUMENT

HERMÈS INTERNATIONAL

118

CORPORATE GOVERNANCE

REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CORPORATE GOVERNANCE PRINCIPLES

discussed the Company’s policy with regard to professional andwage

equality;

approved the wording of the prudential rules applicable by the subsi-

diaries, together with updated lists of the authorised signatories and

banks of Hermès International;

recalled the responsibility inherent to holding inside information as

well as the stock market ethics charter;

examined anti-corruption procedures within the Group;

authorised bank guarantees;

approved the update of the rules of procedure of the Supervisory

Board, the CAG Committee and the Audit Committee;

approved the update of the Supervisory Board’s ethics charter;

established a collaborative platform for the Supervisory Board.

Governance – Appointments – Compensation

In 2016, the Supervisory Board:

examinedand/or approvedCAGCommittee reports andwork, as des-

cribed on pages 121 and 122, including the summary of the triennial

formal assessment of the Board’s work;

set the compensation of the Chairman of the Supervisory Board;

decided upon the distribution and payment of compensation and

directors’ fees for members of the Board and the committees;

decided upon the composition of the Audit Committee and the CAG

Committee after the General Meeting;

welcomed the new member of the Supervisory Board representing

employees and allocated the time necessary for him to perform his

duties.

At each meeting, the CAG Committee informed the Supervisory Board

of current events relating to governance (AMF reports, AFEP-MEDEF

reports, HCGE implementation guides, IFA studies, etc.).

Corporate Social Responsibility – CSR

A presentation of CSR challenges is regularly made to the Board

since 2015.

Major annual topics – Site visits

Every year, at least one detailed presentation on a specific or general

topic regarding the Group’s activities is provided by the relevant mana-

gement team. Since 2011, the Board has devoted one of its meetings

to a site visit in order to enhance its knowledge of one of the Group’s

subsidiaries.

In 2016, the Board:

attended a presentation devoted to digital technology and the

Group’s digital strategy;

attended a presentation devoted to shareholders and institutional

investors;

attended a presentation devoted to improvementsmade in respect of

customer service and price trends by geographical area;

visited the subsidiary Comptoir Nouveau de la Parfumerie, where

it was given a presentation of the activity and the results from

the Hermès Parfums division, and inspected the manufacturing

workshop;

visited the Maroquinerie de Normandie building site, where it was

given an overview of the architectural project.

3.2.2.7

Assessment of the Supervisory Board

Given the progress made by the Company in recent years in terms of

governance, the Supervisory Board decided in 2011 to carry out a ques-

tionnaire-based self-assessment only once every three years, while

maintaining an annual discussion on the functioning of the Board to be

included in the Board meeting agenda.

At the end of 2016, the CAG Committee conducted the triennial formal

self-assessment of the Supervisory Board after having added new ques-

tions to the assessment questionnaire.

One question concerns the actual contribution of each member to the

Board. In the questionnaire, Board members who so wish are further

given the opportunity to meet the Chairman of the CAG Committee for an

individual interview more conducive to dialogue and also to add to some

answers provided in the questionnaire. In 2016, the CAG Committee

received proposals from four firms specialising in governance and Board

assessments. The CAG Committee deemed that it was not desirable to

call on an outside firm to conduct a formal assessment of the Board for

the following reasons:

privacy issues raised by the need to provide information on the Board

to a third party;

the relative absence of weak signals raised in response to previous

assessments;

progress in terms of governance over the last six years;

the small amount of value added expected from an outside firm.

In 2013, the Supervisory Board expressed the view that the assessment

questionnaire was mature. To avoid making the CAG Committee’s trien-

nial self-assessment repetitive and tedious, it was decided to change

the process as follows:

submit the full questionnaire used in 2013 (including new questions)

to the new Board members who were not in office at the time of the

2013 assessment (Monique Cohen and Sharon MacBeath);

submit an “abridged” questionnaire to other members, covering:

•

questions that in 2013 improved the Board’s operations,

•

general questions about the quality of the assessment and the

various points,