At its meeting on February 11, 2015, the Board of Directors, on the recommendation of the Governance and Ethics Committee, reviewed the independence of the Company’s directors as of December 31, 2014. At the Committee’s proposal, the Board considered that, pursuant to the AFEP-MEDEF Code, a director is independent when “he or she has no relationship of any kind with the Company, its Group or its Management, that may compromise the exercise of his or her freedom of judgment”.
For each director, this assessment relies on the independence criteria set forth in the AFEP-MEDEF Code, revised in June 2013, as outlined below, as well as on the analysis of the High Committee for Corporate Governance (HCGE) set out in the AFEP-MEDEF Code Application Guide, revised in December 2014:
- not be an employee or executive director of the Company, or an employee or director of its parent company or of a company consolidated by its parent company, and not having been in such a position for the previous five years;
- not be an executive director of a company in which the Company holds, directly or indirectly, a directorship or in which an employee designated as such or an executive director of the Company (currently in office or having held such office for less than five years) is a director;
- not to be a significant customer, supplier, investment banker or commercial banker of the Company or Group, and for which the Company or the Group represents a material part of their business (the assessment of the materiality or non-materiality of the relationship must be discussed by the Board and the criteria on which this assessment was based must be explained in the Registration Document);
- not to be related by close family ties to a corporate executive director;
- not to have been a statutory auditor of the Company within the previous five years; and
- not to have been a director of the Company for more than twelve years (upon expiry of the term of office during which the 12-year limit was reached).
The AFEP-MEDEF Code expressly stipulates that the Board can decide that the implementation of certain defined criteria is not relevant or induces an interpretation that is particular to the Company.
At its meeting on February 11, 2015, pursuant to the report of the Governance and Ethics Committee, the Board of Directors observed that Mr. Desmarest, Director since May 30, 1995 and Chairman of the Board of Directors since October 22, 2014, was an executive director within the meaning of the Code and therefore could not be considered as independent.
With regard to the criterion of twelve years of service, the Board, at its meeting on February 11, 2015, pursuant to the report of the Governance and Ethics Committee, took note of the HCGE’s analysis. It observed that as of December 31, 2014, the twelve years of service of four directors (Ms. Lauvergeon, Messrs. Collomb, Desmarais, jr and Pébereau) no longer allowed them to be considered as independent within the meaning of the AFEP-MEDEF Code in view of the positions expressed by the HCGE, notwithstanding the specific characteristics of the oil and gas sector, which relies on long-term investment cycles on one hand, and, on the other hand, the objectivity that these directors have demonstrated in the Board’s activity.
Concerning “significant” relationships, as a customer, supplier, investment banker or finance banker, between a director and the Company, the Board deemed that the level of activity between Group companies and a bank at which Mr. Pébereau is a former corporate executive director, which is less than 0.1% of its net banking income(1) and less than 5% of the Group’s overall assets, represents neither a significant portion of the overall activity of such bank nor a material portion of the Group’s external financing.
Likewise, the Board of Directors also deemed that the level of activity between Group companies and one of its suppliers, Vallourec, of which Ms. Idrac is a member of the Supervisory Board, which is less than 3% of Vallourec’s turnover(2) and less than 0.5% of the Group’s purchasing in 2014, represents neither a material portion of the supplier’s overall activity nor a significant portion of the Group’s purchasing. The Board concluded that Ms. Idrac could be deemed as being independent.
Furthermore, the Board deemed that the level of activity between Group companies and Stena AB, of which Mr. Brock is a director, which is less than 0.5% of Stena AB turnover(3) and less than 0.05% of the Group’s purchasing in 2014, represents neither a material portion of the supplier’s overall activity nor a significant portion of the Group’s purchasing. The Board concluded that Mr. Brock could be deemed as being independent.
Accordingly, Mses. Barbizet, Coisne-Roquette, Idrac and Kux, and Messrs. Artus, Brock, and Lamarche were deemed to be independent directors.
The percentage of independent directors in the Board in its composition as of December 31, 2014 stood at 58.3%(4).