Saint Gobain - Registration document 2016

6 CORPORATE GOVERNANCE

1. Composition and operation of the Board of Directors

1.1.2

Independence of the members of the Board of Directors, gender parity, employee shareholder representation and employee representation

The Board of Directors concluded from its review of Directors’ independence against the criteria set down by the AFEP-MEDEF code that, as of February 1, 2017, seven Directors out of 13 (i.e. 53.8%) completely satisfied the independence criteria, and were therefore considered to be independent Philippe Varin. In compliance with the recommendations of the AFEP-MEDEF Code, Jacques Pestre, representing employee Directors: Iêda Gomes Yell, Anne-Marie Idrac, Pamela Knapp, Agnès Lemarchand, Olivia Qiu, Jean-Dominique Senard and shareholders, and Alain Destrain and Pascal Laï, representing employees, were not included in calculating that proportion. recommendation of the AFEP-MEDEF Code (updated version of November 2015) recommending that a 40% ratio of fourteen members (35.7%), and thus differs since the General Shareholders’ Meeting of June 2, 2016 with the former women be represented on the Board by the end of that General Shareholders’ Meeting, due to the progressive At February 1, 2017, the Board includes five women among reduction of the size of the Board of Directors which counted 18 members at the end of 2014. As a result of the envisaged continuing reduction of its size, at the time of the General Shareholders’ Meeting to be held on June 8, 2017 (see chapter 6, section 1.1.4), the Board should include, as from that date, five women among twelve members (41.7%), i.e., more than 40% of women, in compliance with the recommendations of the Law of January 27, 2011 on gender parity on boards of directors, and this in respect of the required deadline. Pursuant to the recommendations of the AFEP-MEDEF Code, Jacques Pestre, representative of employee shareholders, is counted in calculating this proportion, unlike Alain Destrain and Pascal Diversity and complementarity of the skills of the Directors As of February 1, 2017, three members of the Board of Directors out of thirteen (i.e., 23%) are of foreign nationality (excluding employee Directors). Further, the majority of Directors have, or have had, very strong international (see chapter 6, section 1.1.1). exposure, managing groups with a significant proportion of their activities abroad or exercising significant duties abroad As part of its assessment carried out during 2016 with a Board of Directors considered its composition more balanced and more diversified than during its last assessment carried specialized consulting firm (see chapter 6, section 1.2.4), the complementary, in matters such as knowledge of the industry or the activities/business of the Group, innovation/digital, out in a similar process in 2013. It estimated that the expertise and experience of its members were varied and section 1.1.1). It also estimates that it would be desirable, at the management, strategy, finance, governance, and/or corporate social responsibility (see biographies in chapter 6, time of future replacements or renewals, to retain the skills in distribution and digital, increase internationalization and maintain the ratio of executive Directors operating within other large groups. Gender parity Laï, representing employees, who are not.

Independence The Board has reviewed each Director’s situation with regard to all the independence criteria set out in the AFEP-MEDEF Code, with which the Company complies, at the proposal of the Nomination, Remuneration and Governance Committee. In particular the Board scrutinized, as it does every year, with the same attention as it reviewed the other criteria, the business relationships that existed between the Saint–Gobain Group and the other companies or groups of companies where each independent Director (with respect to the other independence criteria listed under the table in section 1.1.1 in this chapter 6) held office. The Board’s review concluded that, with the exception of Mr. Senard as described below, none of the independent Directors, nor any company or group of companies on the Board of which they sit, or within which they hold office as senior executives, has any business relationship with the Company, its group or its management. review of the particular case of Mr. Jean-Dominique Senard, Chief Executive Officer of Michelin, and the business The Board then carried out a quantitative and qualitative relationship between the Michelin and Saint-Gobain groups. companies, including business activities at an international level, which represent less than 0.1% of their respective The business transactions between these two groups of materiality threshold set by the Board. Furthermore, the Board of Directors highlighted that, because of the structure consolidated net sales, fall substantially below the 1% of the Saint-Gobain group, its size and the diversity of its business activities, the Board’s role was not designed to intervene in the business relations of the Group’s various business activities: the Sectors and their branches (Activities, therefore, in his capacity as Director of the Saint-Gobain Business lines and their divisions) are in effect managed in a decentralized manner by their respective heads. Mr. Senard, Group, has no direct or indirect decision-making powers within the implementation or the carrying out of these business transactions. If, however, for any extraordinary reason, such an issue should be discussed by the Board, the Board’s internal rules regarding conflict of interest are such that the Director concerned would be required to inform the Chairman of his situation, and to abstain from participating in such debates or deliberations on the matter in question (see chapter 10, section 1.1). On the basis of the above, the Board has deemed that significant business relationship with the Group which may affect his freedom of judgement or his independence. Mr. Senard, does not maintain, either directly or indirectly, any Chapter 6, section 1.1.3 deals with conflicts of interest of members of the Board of Directors, and the absence of services contract between Directors and the Company or any company within the Group.

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016

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