HERMES_REGISTRATION_DOCUMENT_2017

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CORPORATE GOVERNANCE

SUPERVISORY BOARD’S REPORT ON CORPORATE GOVERNANCE

Corporate Social Responsibility – CSR A presentation of CSR challenges has regularly been 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 itsmeetings to a site visit to improve its understanding of one of the Group’s subsidiaries. In 2017 the Board: s attended a presentation on the strategy of La Montre Hermès; s attended a presentation on the Company’s property strategy; s visited JL & Co in Northampton where it was given a presentation of the subsidiary’s business and results andmade a factory inspection. 3.1.3.10 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 questionnaire-based self-assessment only once every three years while maintaining an annual discussion on the workings of the Board to be included in the Board meeting agenda. To avoid making the CAG Committee’s three-year self-assessment pro- cess 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.

An anonymous and overall presentation of the analysis of the responses to questionnaires is given by the Chairman of the RNG 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 assessment the Supervisory Board deemed its workings to be very satisfactory overall. The CAG Committee considered it undesirable to call on an outside firm to conduct a formal assessment of the Board for the following reasons: s privacy concerns raised by giving information on the Board to a third party; s the relative absence of weak signals raised in response to previous assessments; s progress in terms of governance over the last six years; s the relatively low value added expected from an outside firm. At the end of 2017 the CAG Committee reviewed the workings of the Supervisory Board at one of its meetings and examined the areas of improvement identified by the Board in 2016. 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 – were implemented (see table below).

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2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL