LOREAL_Registration_Document_2017

2 Corporate governance *

FRAMEWORK FOR THE IMPLEMENTATION OF CORPORATE GOVERNANCE PRINCIPLES

This chapter describes the way in which the Board of Directors' work is prepared and organised and includes a summary of the principles of organisation guaranteeing a balance of powers. It includes the complete text of the Internal Rules of the Board of Directors. All components of the remuneration of the corporate officers are provided as is the trading in L'Oréal shares reported by corporate officers in 2017, and the remuneration policy pursuant to Article L. 225-37-2 of the French Commercial Code The Internal Control procedures and the Vigilance Plan implemented by the Company are also described as well as the Risk Factors.

FRAMEWORK FOR THE IMPLEMENTATION 2.1. OFCORPORATE GOVERNANCE PRINCIPLES

AFEP-MEDEF CODE: 2.1.1. THE REFERENCE CODE

the principles and criteria for the determination, allocation s and distribution of the fixed, variable and exceptional components making up the total remuneration and benefits of all kinds that may be granted to the executive officers, in respect of their corporate office; limitations placed by the Board of Directors on the powers s of the Chief Executive Officer. The other information included in the particular section of the Management Report dedicated to corporate governance is published in chapter 6, specifically: the table summarising the authorisations in force granted s by the Annual General meeting (see paragraph 6.2.2.); the special rules for shareholder participation in the Annual s General meeting or the provisions of the Articles of Association providing for the rules (see paragraph 6.1.11); the elements with the potential to have an impact in the s event of a public offer for the purchase or exchange of the Company's securities (see paragraph 6.3.). In accordance with the recommendations of the AFEP-MEDEF Code, this chapter identifies, in a summary table, those provisions of the code which were not applied and explains the reasons for that choice.

The Corporate Governance Code to which the Company refers is the AFEP-MEDEF Code. This code may be consulted on its website at the following address: http://www.medef.com/. In accordance with the provisions of Article L. 225-37, paragraph 6 of the French Commercial Code, this chapter includes a specific section of the Management Report on corporate governance and reports on the following: the Board’s composition and the application of the s principle of balanced gender representation on the Board; the ways in which the Board’s work is prepared and s organised; the Code of Corporate Governance to which the Company s refers, the provisions which have not been applied and the reasons for this non-application; the principles and rules adopted by the Board of Directors s to determine the remuneration and benefits of all kinds granted to the Directors and executive officers;

REGISTRATION DOCUMENT / L'ORÉAL 2017

46