G O V E R N A N C E A N D O R G A N I Z A T I O N
THE RIGHTS OF LVMH SHAREHOLDERS ARE PROTECTED BY LAW AND THE PRINCIPLES OF CORPORATE GOVERNANCE
WHICH GOVERN THE WAY THE GROUP OPERATES.
LVMH s Board of Directors is the strategic body of the Company which is primarily responsible for enhancing the Company s value and protecting its corporate inter- ests. It endeavors to promote long-term value creation by the Company, while notably accounting for the social and environmental issues pertaining to its activities. Its principle assignments are to approve the Company s and the Group s major strategies and supervise their implemen- tation; to verify the fair and accurate presentation of information about the Company and the Group; to pro- tect its corporate assets; and to ensure that core business risks are fully accounted for in the management of the Company. It also makes sure that systems are in place to prevent corruption and influence peddling, and policies are implemented to ensure non-discrimination and diversity notably gender equality within the executive bodies. Lastly, it acts as guarantor with respect to the rights of each of its shareholders and ensures that shareholders fulfill all of their duties. In 2018, the Board of Directors approved the annual and interim parent company and consolidated financial state- ments, monitored quarterly business activity, and gave its opinion on: the Group s key strategic directions and decisions, its budget, compensation of company officers, the implementation of bonus share and performance bonus share allocation plans, and the implementation of the share buyback plan. Lastly, it approved the plan to acquire Belmond Group.
There are three committees within the LVMH Board of Directors: In 2018, the Performance Audit Committee reviewed the annual and interim parent company and consolidated financial statements in conjunction with a detailed analysis of changes in the Group s activities and scope. The Com- mittee also worked on the following issues: internal audit; the Group s internal audit policy and how the financial markets view the Group; the Group s tax situation; and the transition to the new accounting standard, IFRS 16, from January 1, 2019. In 2018, the Nominations and Compensation Commit- tee issued proposals on: the fixed and variable compen- sation and benefits in kind of the Chairman and Chief Executive Officer, and the Group Managing Director; the performance criteria pertaining to their variable com- pensation and of the respective weightings of these criteria; the allocation of performance bonus shares to these two people and the requirement to retain a portion of the shares that may be definitively allocated to them. It also provided opinions on the compensation, perfor- mance bonus shares, and benefits in kind attributed to certain members of the Board of Directors by the Com- pany or its subsidiaries. It delivered a favorable opinion on the appointment of a new female director to replace another female director who has resigned. The Ethics and Sustainable Development Committee ensures compliance with the individual and shared values on which the Group bases its actions, which are detailed in the Code of Conduct as well as the other codes and charters resulting from this code. In 2018, the committee s work included monitoring the compliance program imple- mented by the Group in connection with the Sapin 2 Act and the law on the duty of care for parent companies, in conjunction with the Ethics & Compliance Director.
Further information can be found in the 2018 Reference Document.