Universal Registration Document - Fiscal 2023

7. Corporate governance

Limitations on the powers of the Chairwoman and Chief Executive Officer

The limitations on the powers of the Chairwoman and Chief Executive Officer are provided for in the appendix to the Internal Rules of the Board of Directors.

The Chairwoman and Chief Executive Officer is required to obtain the prior consent of the Board to grant any guarantee insofar as they meet the following conditions:

  • term greater than 15 years, regardless of the amount;
  • term between 10 and 15 years and amount greater than 15 million euros;
  • term between 5 and 10 years and amount greater than 30 million euros;
  • term less than 5 years and amount greater than 50 million euros.

However, the prior consent of the Board is not required where the amount is less than or equal to 100 million euros and the term less than 25 years, provided it has been pre-approved by the Chairperson of the Audit Committee.

The total amount for which the Chairwoman and Chief Executive Officer may grant any guarantee between Board meetings is limited to 150 million euros.

The Chairwoman and Chief Executive Officer must also obtain prior consent from the Board of Directors to commit the Company beyond certain amounts as follows:

  • for acquisitions of interests in companies for more than 100 million euros per transaction (enterprise value);
  • for disposals of shares in companies for more than 20 million euros (enterprise value) per transaction;
  • for setting up new financing for additional medium and long-term financial debt of more than 100 million euros.
Role and resources of the Lead Director

The powers entrusted to the Lead Director and the resources made available to him are provided for in article 9.2 of the Internal Rules of the Board of Directors. The main elements are described below.

The main duty of the Lead Director is to ensure that the Company’s governance bodies function effectively, and more specifically:

  • he is consulted by the Chairwoman regarding the agenda for each meeting of the Board of Directors and regarding the schedule of meetings, and may call a meeting of the Board of Directors on a specific agenda;
  • he oversees the communication between the independent directors and the other members of the Board of Directors, and the quality of the information provided to the directors;
  • at least once per year, he convenes the members of the Board of Directors without the executive directors and directors representing employees (“executive session”). He chairs these meetings, organizes and moderates the deliberations and reports on them to the Chairwoman;
  • he brings to the attention of the Chairwoman and the Board of Directors any conflicts of interest that he would have identified;
  • he, in coordination with the Chairwoman, is the Board’s spokesperson on matters of governance to investors and shareholders. He raises queries from shareholders on governance matters to the Board;
  • he reports to the Board of Directors on the performance of his duties once per year;
  • during Shareholders Meetings, he may be invited by the Chairwoman to report on his activities.

In order to perform the duties assigned to him, the Lead Director:

  • has access to all documents and information that he deems necessary for the performance of his duties. In the course of exercising his powers, he may ask for external technical studies to be carried out at the expense of the Company;
  • is kept regularly informed of the Company’s activities. He may also, at his own request and after having informed the Chairwoman, meet with the operational and functional executives;
  • may ask to attend the meetings of the Committees of which he is not a member, by agreement with the Chairperson of the Committee in question;
  • is associated with the work of the Nominating Committee and/or the Compensation Committee even though he has not been appointed by the Board of Directors as a member of these Committees. As such, he oversees the process of assessment of the Board of Directors and reports on this assessment to the Board of Directors.
Lead Director’s activity report

Prior to the convening of meetings of the Board of Directors, Luc Messier has been consulted on agendas at his regular meetings with the Chairwoman and Chief Executive Officer.

Luc Messier is a member of the Audit Committee and the Nominating Committee. He has also attended the meetings of the Compensation Committee, the sole committee of which he is not a member.

He has organized an executive session following a Board meeting in order to hold discussions in the absence of the management and directors representing employees.

He has coordinated the external formalized assessment of the work of the Board of Directors and its Committees (see Assessment of the Board’s operating procedures below).

Luc Messier has been consulted for the development of the training plan for directors in terms of both governance and corporate responsibility (see Induction and training of directors below) with a session dedicated to climate topics.

He also monitored the actions resulting from the evaluation of the Board of Directors and the committees.

Lastly, he maintained a dialogue between the directors and, as appropriate, transmitted any request or question that might arise from these discussions.

Operating procedures of the Board of Directors – Internal Rules

In addition to the Company’s bylaws, the Board of Directors is governed by the Board’s Internal Rules, which notably set out the Board’s mission, the minimum and maximum number of Board members, the rules of the Directors’ charter, the minimum number of Board meetings and the rules for allocating directors’ compensation. The Internal Rules also set the criteria for assessing the performance of the Board, set the limits to the powers of the Chief Executive Officer, and define the policy for issuing guarantees.

The Internal Rules are regularly reviewed by the Board of Directors and comply with the AFEP-MEDEF Code as revised in December 2022.

They are available in full on the Group’s website (www.sodexo.com). A summary of their principal components is provided below.

The Directors’ charter

The main components of the Directors’ charter are described below.

Each director should be mindful of the Company’s corporate interest, exercise good judgment (particularly of situations, strategies and people), and look to the future in order to identify the risks and strategic challenges that lie ahead. Directors should also maintain their independence, be focused, active and engaged, and act with integrity.