To maintain a high standard, the Board of Directors, based on the work of the Nominations and Governance Committee, ensures that throughout their entire term of office, Directors are fully able to act in the best interests of the Company, with all the due diligence and care required and subject to strict confidentiality and loyalty obligations.
Directors must keep the Board informed of the directorships they hold in other companies, including any involvement in Board Committees of any French or foreign companies. They are required to notify the Board of any situation that may constitute a conflict of interest, even if such conflict is only potential, and must refrain from participating in any related deliberations.
In addition, all Directors are required to submit an annual declaration regarding potential conflicts of interest between their duties to L’Oréal and their private or professional interests, specifically with regard to other directorships and roles. Any relevant information disclosed in this way is made public. Based on these declarations, the Board of Directors has not identified any conflicts of interest as of their issue date, pursuant to Commission Delegated Regulation (EU) 2019/980 supplementing Regulation (EU) 2017/1129 ("Prospectus Regulation").
The Nominations and Governance Committee conducts an annual review of the summary table prepared by the Company of the financial flows that occurred during the financial year between L’Oréal and interested parties, as defined by the regulation, in order to report back to the Board of Directors as part of the regular procedure to evaluate ordinary agreements signed at arms' length terms, pursuant to Article L. 22-10-12 of the French Commercial Code. Where there are doubts on the classification of an agreement, the Committee must verify that transactions are concluded in the ordinary course of business and at arm's length terms, so that the Board of Directors can implement the procedure for related-party agreements where necessary. In this case, any persons directly or indirectly interested in the agreement are recused from the assessment. Similarly, in accordance with the AFEP-MEDEF Code and the recommendations of the French Financial Markets Authority, the Board of Directors, based on the work carried out by the Nominations and Governance Committee, carries out an annual review of any possible business relationships between L’Oréal and companies in which independent Directors hold directorships or hold functions, to ensure these relationships are not material (see section section 2.2.1.4).
Family relationships between corporate officers (Article 12.1 of the Annex)
Françoise Bettencourt Meyers is the mother of Jean‑Victor Meyers and Nicolas Meyers.
Absence of convictions or incrimination of corporate officers (Article 12.1 of the Annex)
To the Company’s knowledge, over the last five years, no corporate officers have been convicted of fraud, associated with a bankruptcy, receivership or liquidation, or the subject of any official public incrimination or sanction imposed by statutory or regulatory authorities (including designated professional bodies) or a decision by a court disqualifying them from acting as a member of an administrative, management or supervisory body or from acting in the management or conduct of the business of any issuer.
Potential conflicts of interest between the duties of corporate officers with regard to L’Oréal, and their private interests and/or other duties (Articles 12.2 and 16.3 of the Annex)
The way that the Board is structured and operates, with seven independent Directors, makes it possible, where necessary, to prevent shareholders, acting individually or in concert, from abusing their rights to the detriment of the Company.
Regarding any arrangement or agreement entered into with major shareholders, customers, suppliers or others under which a Director was selected to sit on the Board of Directors, there was an agreement in place between the Bettencourt Meyers family and Nestlé SA (which expired on 21 March 2018) focused on the reciprocal voting commitment in favour of the appointment as Directors of three members proposed by the Bettencourt Meyers family and two members proposed by Nestlé.
The Company was informed of an interest, amounting to 100 shares, of its Chairman, Jean-Paul Agon, in the collective lock-up agreements signed on 16 December 2016 by Téthys SAS and members of the Bettencourt Meyers family group under the Dutreil law. The Nominations and Governance Committee Meeting of 6 December 2016 examined this arrangement prior to the signing of the agreement and considered that it could not be contested on the basis of the Company’s best interests, nor could it give rise to consequences for the Company’s governance, and informed the Board of Directors accordingly.
The Company was informed that a new collective lock-up agreement was signed on 29 December 2023 under Article 787 B of the French Tax Code, similar to those entered into in 2016 (which were terminated earlier the same date), with the addition of the company Financière L’Arcouest (controlled by Françoise Bettencourt Meyers and her family). The Nominations and Governance Committee Meeting of 6 December 2023 examined this arrangement prior to its signing and confirmed that it could not be contested on the basis of the Company’s best interests, nor could it give rise to consequences for the Company’s governance, and informed the Board of Directors accordingly.
Information on service contracts with members of the administrative bodies (Article 12.2 of the Annex)
No corporate officers have a service contract with L’Oréal or any of its subsidiaries providing for the granting of benefits upon termination of such contract.
