HERMÈS - 2018 Registration document

3

Corporate Governance

Supervisory Board’s report on corporate governance

s s progress in terms of governance over the last six years; s s the relatively low value added expected from an outside firm. In late 2018 and early 2019 the CAG-CSR Committee reviewed the func- tioning of the Supervisory Board at one of its meetings and examined the areas of improvement identified by the Board in late 2017.

All areas of improvements – which mainly consisted of refining the text for the “Corporate Governance” section of the registration document to include the latest recommendations in matters of governance – had been implemented (see table below).

Areas of improvement implemented in 2018 and early 2019

Text justifying improvement

The areas of improvement implemented before 12 April 2018 (date Registration Document filed with the AMF) are provided in the 2017 Registration Document on page 149. Corporate governance Specific information on the areas of expertise of Board members in the form of table / summary / chart s s These items are addressed in this Registration Document (see page 150). 2018 EY Labrador Rating

Recommendation to explain the decision-making process associated with its development of the succession plan of Executive Corporate Officers, including, for example, the role of the competent committee, the time horizon for which the plan has been developed, the frequency with which it is reviewed, and the procedures for potentially involving the Senior Executive in question. s s These items are addressed in this Registration Document (see page 139). Recommendation that the Board regularly review the components of compensation likely to be owed at the time of or after the departure of a Senior Executive and that it consider whether it is possible and advisable to comply with the new provisions of the code, particularly at the time of a reappointment. s s The CAG-CSR Committee carried out this review in early 2019 and concluded that no alignment was necessary (see page 136). Recommended that companies disclose the various benefits potentially granted depending on the departure scenario (voluntary departure, forced departure and retirement) in the Registration Document and compensation policy. s s These items are addressed in this Registration Document (see page 192). Recommendation that the corporate governance report and the Registration Document include a comprehensive multi-year view of implementation of the compensation policy, in addition to the policy itself and the prior-year compensation. s s These items are addressed in this Registration Document (see page 191). Recommendations that the review period for fixed compensation is stated. s s This item has been addressed in this Registration Document (see page 191). Recommended to follow the tables presented in Appendix 3 of the AFEP-MEDEF Code, in particular with a view to reporting on changes in the composition of the Board: departure, appointment, reappointment, stating in particular the changes that reflect diversification (in terms of representation of women, nationality and international experience). s s These items are addressed in this Registration Document (see page 149). Ethics and compliance Enhance communication on ethics/compliance s s These items are addressed in this Registration Document (see page 214 et seq. ). Internal control / Internal audit / Fraud prevention Transparency of information on internal control Internal audit system Fraud prevention system s s These items are addressed in this Registration Document (see page 42 et seq. and page 217).

2018 AMF report on corporate governance and Senior Executive compensation of listed companies

2018 AMF report on corporate governance and Senior Executive compensation of listed companies

2018 AMF report on corporate governance and Senior Executive compensation of listed companies

2018 AMF report on corporate governance and Senior Executive compensation of listed companies 2018 AMF report on corporate governance and Senior Executive compensation of listed companies

Recommendation AMF DOC 2012-02 amended on 30 November 2018 AFEP-MEDEF Code revised in June 2018

2018 EY Labrador Rating

2018 EY Labrador Rating

Assessment of the CAG-CSR Committee The CAG-CSR Committee carried out its self-assessment and concluded, as in previous years, that its functioning was satisfactory.

182

2018 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL