HERMÈS - 2018 Registration document

Corporate Governance

Supervisory Board’s report on corporate governance

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 itsmeetings to a site visit to improve its understanding of one of the Group’s subsidiaries. In 2018 the Board: s s attended a presentation on the Group Disability Agreement; s s attended a presentation on the Group’s health and well-being at work initiative; s s visited the John Lobb bespoke workshops in Mogador; s s visited the Ateliers de tissages de Bussières et de Challes and the Ateliers d’Ennoblissement d’Irigny, where it was given a presentation on the business, the results of these companies and the Silk division and a visit of the workshops. Evaluation 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-evaluation only once every three years, while main- taining a discussion on the functioning of the Board every year. To avoid making the CAG-CSR Committee’s three-year self-evaluation process repetitive and tedious, it was decided in 2016 to change it by giving the full questionnaire to new Board members and an abridged version to existing Board members. One question bears on the effective contribution of each member to the work of the Board. In this questionnaire, Board members who wish are invited tomeet individually with the Chairman of the CAG-CSRCommittee for more in-depth discussions and also to provide further information in relation to the questionnaire. An anonymous and overall presentation of the analysis of the responses to questionnaires is given by the Chairman of the CAG-CSR Committee to the Supervisory Board. The conditions, detailed procedures and areas for improvement identi- fied during the last formal three-year self-assessment in 2016 are des- cribed in the 2016 registration document (pages 118 and 119). During this formal evaluation the Supervisory Board deemed its functioning to be very satisfactory overall. The CAG-CSR Committee considered it undesirable to call on an out- side firm to conduct a formal assessment of the Board for the following reasons: s s confidentiality concerns raised by giving information on the Board to a third party; s s the relativeabsenceof weak signals raisedby previousassessments; 3.1.4.10 Evaluation of the Supervisory Board and Committees

In 2018 the Supervisory Board: s s approved the strengthening of the corruption prevention plan in com- pliance with law 2016-1691 of 9 December 2016, known as “ Sapin II”, within the Group; s s formally noted the appointment of a Group Data Protection Officer; s s conducted the annual review of anti-corruption procedures within the Group. In early 2019, the Director of Legal Compliance and Public Affairs pre- sentedtotheSupervisoryBoard,theethicsandcomplianceprogrammes / compliance action plan: s s professional alert procedure and Ethics Committee; s s strengthening of the corruption prevention plan in compliance with law 2016-1691 of 9 December 2016, known as “ Sapin II” law, on transparency, the fight against corruption and the modernisation of economic life: s s monitoring by the French Anti-corruption Agency, s s corruption risk mapping, s s 2019 Action plan: anti-corruption code of conduct, alert system, trai- ning, tools for assessment of third parties, audits, s s roll-out of the vigilance plan in accordance with law 2017-399 of 27 March 2017 concerning the duty of care of parent companies and contractors, s s anti money-laundering, international sanctions and embargoes, s s presentation of the new code of business conduct. Corporate social responsibility – CSR A presentation of CSR challenges has been made to the Board regularly since 2015. The Supervisory Board’s rules of procedure were updated on 11 September 2018 in particular to include new duties relating to CSR issues (§ 1.2.4.2.) in accordance with the new provisions of the AFEP- MEDEF Code revised in June 2018. On 16 November 2018, the Supervisory Board decided to rename the “Compensation, Appointments and Governance Committee” as the “CAG-CSR Committee”. The CAG-CSR Committee was assigned new duties relating to social and environmental responsibility: s s assist the Supervisory Board in monitoring issues relating to CSR so that the Hermès Group can better foresee and tackle opportunities, challenges and the related risks; s s assist theSupervisory Board inmonitoring theHermèsGroup’s social policy and the non-discrimination and diversity policy. In 2018 the Supervisory Board: s s attended a presentation on product recycling; s s formally noted the Group’s challenges in terms of sustainable deve- lopment and CSR.

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2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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