Hermès - Registration Document 2016

2016 REGISTRATION DOCUMENT

HERMÈS INTERNATIONAL

122

CORPORATE GOVERNANCE

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

With respect to corporate governance

to recommend revisions to corporate governance rules, as needed;

to periodically ascertain that independent Supervisory Board

members meet the criteria pertaining to independence and

objectiveness set out in the Supervisory Board rules of procedure;

to review the composition of the specialised committees;

to oversee the annual assessment of Supervisory Board practices;

to ascertain that the management bodies apply the Supervisory

Board rules of procedure and the recommendations of the AFEP-

MEDEF Corporate Governance Code in force in their operations,

inter alia.

analysis of the individual situation of Supervisory Board members

(independence, conflicts of interest, plurality of offices, number of shares)

and of the Committee members (special skills with regard to finance or

accounting);

self-assessment of the CAG Committee;

update and distribution of Supervisory Board documents (master file, rules of

procedure, 2016 calendar of blackout periods);

review of the report from the Chairman of the Supervisory Board on

corporate governance principles applied by the Company, with regard

to the composition of the Board and the application of the principle of

balanced representation between women and men within the Board,

the conditions for the preparation and organisation of the Supervisory

Board’s work, and the internal control and risk management procedures

set up by the Company;

proposal to amend the rules of procedure of the Audit Committee (to

adapt them to the new legal provisions related to the reform of audit

assignments that came into force on 17 June 2016);

triennial formal assessment of the Supervisory Board to be performed

in 2016 (decision to be taken on whether or not to call on an outside

firm, process and assessment questionnaire, launch of the evaluation,

summary and analysis of results, areas of improvement);

RCMS (Responsabilité Civile des Mandataires Sociaux, senior

management civil liability) insurance of members of the Supervisory

Board and members of the Audit Committee after the reform of the

statutory audit and the new responsibilities arising therefrom.

Some of these issues are further discussed in this report.

The CAG Committee reviewed current events in matters of governance:

AMF – Recommendation 2012-02 (updated 22 December 2015):

Corporate governance and compensation of company Senior Executives

with reference to the AFEP-MEDEF Code – Consolidated presentation of

the recommendations contained in the AMF annual reports;

HGCE – Application guide for the AFEP-MEDEF Corporate Governance

Code for listed companies of June 2013, published in December 2015 by

the HCGE (Corporate Governance High Committee);

OECD – Corporate Governance Principles (revised September 2015);

AMF – Report on the Chairman’s report on internal control and risk

management procedures (February 2016);

AFEP – Table of voting policies of investors and proxy advisory agencies;

AMF – Study on the reports of Chairmen on internal control and risk

management procedures in respect of 2014 (February 2016);

Your director – Governance and life of the business: feedback from Senior

Executives and directors (February 2016);

HCE|fh – Interim evaluation report on the implementation of the laws of

27 January 2011 and 12 March 2012 (February 2016);

AFG – Recommendations on Corporate Governance (January 2016);

AMF – Comparative study of corporate governance codes in 10 European

countries (30 March 2016);

Spencer Stuart – Study on assessing the contribution of individual

directors (April 2016);

AFEP – Appraisal of the 2016 General Meetings;

AFEP-MEDEF – Study on the application of the corporate governance code

by Hermès International;

HGCE – 2016 Annual Report;

Spencer Stuart – France Board Index 2016;

EY Labrador – Governance Panorama 2016;

Russell Reynolds – 2016 study of the governance of the CAC 40

companies;

AFEP – Employee representation on Boards;

BP2S – Review of AGMs, 2016.

The work and operation of the CAG Committee were assessed in 2016 as

part of the triennial formal self-assessment of the Supervisory Board, and

were deemed very satisfactory overall.