Groupe Renault - 2020 Universal Registration Document

301 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 03 COMPOSITION, PREPARATION AND ORGANIZATION OF THE BOARD OF DIRECTORS GROUPE RENAULT GROUPE RENAULT: A COMPANY THAT ACTS RESPONSIBLY CORPORATE GOVERNANCE FINANCIAL STATEMENTS RENAULT AND ITS SHAREHOLDERS ANNUAL GENERAL MEETING OF RENAULT ON APRIL 23, 2021 ADDITIONAL INFORMATION Implementation of the “comply or explain” rule 3.1.8 Pursuant to the provisions of Article L. 22-10-10 of the French Commercial Code, the Company refers to the AFEP-MEDEF Code, whose recommendations it follows. Pursuant to the “comply or explain” rule in Article 27.1 of the AFEP-MEDEF Code and the provisions of Article L. 22-10-10 of the French Commercial Code, the recommendations of that Code that have not been followed and the related explanations are summarized in the table below: Recommendation of the AFEP-MEDEF Code (January 2020 version) Comments Director independence criteria (Article 9.5) At its meeting of February 18, 2021, the Board of Directors examined the situation of Mr. Jean-Dominique Senard with regard to criterion no. 1 of the AFEP-MEDEF Code, given his capacity as director of Nissan and Chairman of Renault s.a.s. for the period from October 11, 2019, to June 30, 2020. The AFEP-MEDEF Code states that one of the criteria that the Board of Directors must assess to possibly exclude someone from the status of independent director is that of “ not being or not having been, during the past five years, an employee, executive offer, or director of a company that the company consolidates .” According to the AFEP-MEDEF Code implementation guide, this recommendation also applies when a director holds “ an office in a company in which the first company holds a non-controlling but significant stake, or in a sister company ”. It is recalled that Nissan is not a company fully consolidated by Renault. Renault has significant influence over Nissan and therefore accounts for its interest in Nissan using the equity method (for more details on Renault's shareholding in Nissan, see note 12 in chapter 4.2.6.4 of the Universal registration document). The Board of Directors, on the recommendation of the Governance and Compensation Committee, held that the appointment of the Chairman of the Board of Directors of Renault to the Board of Directors of Nissan, with a view to developing and strengthening cooperation between the Boards of Directors of the two Alliance partners was not such as to call into question Mr. Jean-Dominique Senard's freedom of judgement and independence with respect to Renault. Furthermore, should such a situation give rise to any conflict of interest, the provisions of the Board Charter requiring the director in question to abstain from participating in the deliberations and votes of the Board of Directors would apply. In addition, the Board of Directors, on the recommendation of the Governance and Committee Committee, considered that the performance by Mr. Jean-Dominique Senard of the duties of Chairman of Renault s.a.s. from October 11, 2019, to June 30, 2020, was of an exceptional and purely temporary nature, during the time required for the Board of Directors to conduct the succession process for the Chief Executive Officer and until the arrival of Mr. Luca de Meo on July 1, 2020. The Board of Directors therefore considered that this exceptional situation was not such as to call into question the independence of Mr. Jean-Dominique Senard at the end of this temporary term of office. At its meeting of February 18, 2021, the Board of Directors also reviewed Mr. Pierre Fleuriot’s situation with regard to criterion no. 1 of the AFEP-MEDEF Code in view of his appointment as director of Nissan. The Board of Directors, on the recommendation of the Governance and Compensation Committee, held that the appointment of the Lead Independent Director of Renault to the Board of Directors of Nissan, with a view to developing and strengthening cooperation between the Boards of Directors of the two Alliance partners was not such as to call into question Mr. Pierre Fleuriot’s freedom of judgment and independence with respect to Renault. Furthermore, should such a situation give rise to any conflict of interest, the provisions of the Board Charter requiring the director in question to abstain from participating in the deliberations and votes of the Board of Directors would apply. Termination of the employment contract of the Chief Executive Officer (Article 22.1) At its meeting of October 11, 2019, the Board of Directors decided (i) to terminate Mr. Thierry Bolloré’s office as Chief Executive Officer of Renault SA with immediate effect and (ii) to appoint, with immediate effect, Ms Clotilde Delbos as Chief Executive Officer of Renault SA for an interim period, until a new Chief Executive Officer is appointed. Given the exceptional circumstances and transitory nature of this situation, the Board of Directors held, on the recommendation of the Governance and Compensation Committee, that there was no reason to terminate Ms Clotilde Delbos’ employment contract with Renault s.a.s, which corresponds to her functions as Chief Financial Officer of Groupe Renault (separate from her office as interim Chief Executive Officer of Renault SA) which she continued to exercise under the supervision of the Chairman of Renault s.a.s, Mr. Jean-Dominique Senard. This temporary situation ended upon the arrival of Mr. Luca de Meo as Chief Executive Officer of Renault SA and Chairman of Renault s.a.s. on July 1, 2020. Proportion of independent directors on the Audit Committee (Article 16.1) The AFEP-MEDEF Code provides that “ at least two thirds of the members of the Audit Committee must be independent directors and the Committee must not include any executive officers ”. As at December 31, 2020, the Audit, Risks and Compliance Committee had six members, including three independent directors, one director representing the French State, one director representing Nissan and one director representing employee shareholders, meaning that 60% of members were independent directors, which is lower than the rate of two thirds required by the AFEP-MEDEF Code. The Board of Directors considers this composition to be balanced, given the decision to maintain a limited number of members with the presence of representatives of the reference shareholders and employees, while still supporting effective Committee work, which requires a level of financial and accounting expertise. Furthermore, the Board of Directors, meeting on February 18, 2021, on the recommendation of the Governance and Compensation Committee, decided to propose to the Annual General Meeting of Shareholders of April 23, 2021, that Mr. Bernard Delpit be appointed as independent director. Given his long and extensive experience in financial matters, Mr. Delpit is expected to join the Audit, Risks, and Compliance Committee shortly.