Loreal 2011 Annual Report Download - page 30

28 REGISTRATION DOCUMENT − L’ORÉAL 2011
2Corporate governance
Summary of the principles
This chapter describes in particular the way in which the Board’s work is prepared and organized (§2.2.) and the
Internal Control procedures implemented by the Company (§2.5.). All components of members of the Board of
Directors’ remuneration are mentioned hereby (§ 2.3.) as well as the trading by Directors and corporate offi cers in
L’Oréal shares in 2011 (§ 2.4.). The Statutory Auditor’s Reports corresponding to Corporate Governance, which are the
Special Report on regulated agreements and commitments with third parties (§ 2.7.) and their Report on the Report
prepared by the Chairman of the Board of Directors (§ 2.6.) have been included, as well as the complete text of the
Internal Rules of the Board of Directors.
AFEP-MEDEF Code:
thereferencecode
The Board of Directors considers that the recommendations
of the AFEP-MEDEF Code of Corporate g overnance for listed
companies of April2010 fall within the Company’s approach to
corporate governance. Accordingly, this is the Code referred to
by the Company to prepare this Corporate g overnance chapter,
approved by the Board at its meeting on Monday, February13th,
2012. The AFEP-MEDEF Code can be consulted over the Internet
at the following address: http://www.code- afep-medef.com/.
In accordance with Article L.225-37 of the French Commercial
Code, this chapter on Corporate g overnance includes the
Report of the Chairman on the Board’s composition and on
the ways in which the Board’s work is prepared and organised
(section2.2) as well as on the Internal Control procedures
implemented by the Company (section2.5).
Under the terms of Article L.225-37, paragraph6, of the French
Commercial Code, the Chairman is required to present a
supplementary report, attached to the Management Report:
“The Chairman of the Board of Directors gives an account, in
a report attached to the report mentioned in ArticlesL.225-
100, L.225-102, L.225-102-1 and L.233-26, of the Board’s
composition and of the application of the principle of balanced
representation of men and women on the Board, of the ways in
which the Board’s work is prepared and organised, and on the
Internal Control and risk management procedures put in place
by the Company, describing in particular those of its procedures
that relate to the preparation and processing of accounting
and financial information for the parent company financial
statements and, where applicable, for the consolidated financial
statements. Without prejudice to the provisions of Article L.225-
56, the report also indicates any limitations that the Board of
Directors imposes on the powers of the Chief Executive Officer”.
This same article of the French Commercial Code states that:
“Where a Company voluntarily refers to a code of corporate
governance drawn up by organisations representing businesses,
the R eport […] also specifies the provisions which have not been
applied and the reasons for this non-application.
The R eport provided for in this Article also describes the specific
terms and conditions of participation by shareholders in the
General Meeting or refers to the provisions of the Articles of
Association which set out such terms and conditions.
This R eport furthermore describes the principles and rules
adopted by the Board of Directors to determine the remuneration
and benefits of all kinds granted to the corporate officers”.
In accordance with ArticleL.255-37, paragraph9, of the French
Commercial Code, it is specified that the information provided
for in ArticleL.225-100-3 of the French Commercial Code is
published on page 206 in chapter7.
In application of this same Article, the Board of Directors of
L’Oréal approved this chapter at its meeting of February13th,
2012.
This chapter identifies those few provisions of the AFEP-MEDEF
Code which have not been applied and explains the reasons
for this choice in accordance with ArticleL.225-37 of the French
Commercial Code.
2.1. Summary of the principles