Carrefour - 2017 Registration Document

CORPORATE GOVERNANCE "Comply or Explain" rule of the AFEP-MEDEF code 2017 REGISTRATION DOCUMENT | CARREFOUR 3. 160 "Comply or Explain" rule of the AFEP-MEDEF code 3.5 In accordance with the “Comply or Explain” rule of the AFEP-MEDEF code, the Company indicates in this section the provisions of the code that it did not apply in 2017. Recommendations of the AFEP-MEDEF code Group practice and explanation The Lead Director must be independent (Article 6.3). At its meeting on June 15, 2017, and on the recommendation of the Appointments Committee, the Board of Directors appointed Philippe Houzé as Lead Director. Although the Board of Directors did not consider Philippe Houzé to be an Independent Director, it recognised his extensive experience in retail and in governance. A Director will not qualify as an Independent Director if he/she has been a Director for more than 12 years (Article 8.5.6). On the recommendation of the Appointments Committee, the Board of Directors examined the situation of Anne-Claire Taittinger, whose term of office exceeded 12 years on April 20, 2017. The Board of Directors noted this year that Anne-Claire Taittinger exhibited complete independence of thought. The Board of Directors took into account the objectivity she consistently demonstrated during its discussions and decisions, as well as her ability to express her beliefs and make sound judgements in all situations. The Board of Directors also took into account in its analysis the fact that Anne-Claire Taittinger serves as an Independent Director and as Chair of the Audit and Accounts Committee on the Board of Directors of another listed company. Consequently, the Board of Directors confirmed that the previous assessment, according to which Anne-Claire Taittinger was deemed to be independent, was still confirmed. Independent Directors must make up at least two-thirds of the Audit Committee (Article 15.1). 60% of the members of the Accounts Committee qualify as Independent Directors within the meaning of the AFEP-MEDEF code. The Board of Directors is satisfied with this composition given the decision to limit the number of committee members, with two Directors representing the main shareholders, and to enhance the effectiveness of the committee’s work, which requires a high level of expertise in finance and accounting. In addition, the committee is chaired by an Independent Director. The Compensation Committee should comprise a Director representing employees (Article 17.1). A period of time to adapt to their office is given to Directors representing employees before discussing with them in 2018 their participation in one or more Board of Directors' specialised committees. An Executive Officer may not receive a termination payment if he/she elects to leave the company in order to hold another position, changes position within the same group, or can start claiming his/her pension (Article 24.5.1). On July 18, 2017, the Board of Directors decided, on the recommendation of the Compensation Committee, that Alexandre Bompard would be entitled to a termination payment. The termination payment is contingent on the non-compete obligation that will come into effect when Alexandre Bompard terminates his duties as Chairman and Chief Executive Officer. This termination payment will be due in the event of the termination, for any reason whatsoever, of his duties as Chairman and Chief Executive Officer, except in cases of removal for gross negligence or wilful misconduct or a change of position within the Carrefour group. The Board of Directors considers that the termination payment being contingent on a non-compete obligation justifies departing from the AFEP-MEDEF code recommendation, which only addresses termination payments, and not non-compete obligations.