Governance Information • Apr 5, 2016
Governance Information
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02
In accordance with the provisions of article L. 225-37 of the Commercial Code (Code de Commerce), this chapter includes information on the composition of the Board of Directors and on the conditions for the preparation and organization of its work, the internal control and risk management procedures implemented by the Company, and any restrictions that the Board of Directors may have placed on the powers exercised by General Management.
Pursuant to article L. 225-37 of the Commercial Code, the Board of Directors of Compagnie Plastic Omnium approved this chapter during its meeting of February 24, 2016.
Pursuant to Article 11 of the Company's bylaws and Article L. 225-17 of the French Commercial Code, the Board of Directors of Compagnie Plastic Omnium is composed of up to 18 members.
The term of office of each director is three years. Directors are elected by the Shareholders' Meeting for three-year terms expiring at the close of the Shareholders' Meeting called during the year in which their term expires to approve the accounts for the previous financial year.
As at December 31, 2015, the Company is governed by a Board of Directors composed of 13 members: the Chairman and CEO, the Co-Chief Executive Officer and Chief Operating Officer, the Chief Operating Officer, 10 directors.
Act No. 2011-103 of January 27, 2011 and the AFEP-MEDEF Code establish a principle of balanced representation between women and men on the Board of Directors. As at December 31, 2015, the Board of Directors of Compagnie Plastic Omnium comprises 5 women directors out of 13, which is a proportion of 38.46%.
The composition of the Board of Directors complies with the law that fixes a first minimum proportion of 20% of directors of the same gender to be achieved in 2014.
The Appointments Committee carries out its selection work so as to propose candidates for the Board of Directors. At all events, in 2017 the Board's composition will be in compliance with the law that requires a minimum proportion of 40% of directors of each gender.
French Age 66 Professional address: Plastic Omnium 1, Allée Pierre Burelle – 92300 Levallois-Perret
Laurent Burelle is a graduate of the Federal Institute of Technology (ETH) in Zurich, and holds a Master of Science Degree in Chemical Engineering from the Massachusetts Institute of Technology (MIT).
He began his career with the Plastic Omnium Group as a Production engineer and assistant to the Director of the Langres plant. In 1977, he was appointed Chief Executive Officer of Plastic Omnium SA in Valencia (Spain), going on to become Chairman and Chief Executive Officer. From 1981 to 1988, he served as Head of the Environment-Urban Systems Division, before becoming Vice Chairman and Chief Executive Officer of Compagnie Plastic Omnium in 1988. He has been Chairman and Chief Executive Officer of Compagnie Plastic Omnium since July 2001. He is a director with the Pernod-Ricard and CIC Lyonnaise de Banque companies, and a member of the Supervisory Board with Wendel and Labruyère-Eberlé. Furthermore, he is director of the Fondation Jacques Chirac, director of the AFEP and Vice Chairman of the Institut de l'Entreprise.
Laurent Burelle is a Commandeur de la Légion d'honneur.
Chairman and Chief Executive Officer since July 1, 2001 Director since June 18, 1981 Holds 57,000 Plastic Omnium's shares
| French companies | |
|---|---|
| Burelle SA/* | Chief Operating Officer and Director |
| Sofiparc SA** | Chairman and member of the Supervisory Committee |
| Burelle Participations SA** | Director |
| Plastic Omnium Auto Exteriors SAS** | Chairman |
| Plastic Omnium Auto Inergy SAS**(1) | Chairman |
| Lyonnaise de Banque | Director |
| Pernod Ricard SA* | Director |
| Labruyère-Eberlé SAS | Member of the Supervisory Board |
| Wendel SA* | Member of the Supervisory Board |
| Institut de l'Entreprise (Association) | Vice Chairman |
| AFEP (Association) | Director |
| Fondation Jacques Chirac (Association) | Director |
| European Transalpine liaison committee Lyon-Turin (Association) | Director |
| International companies | |
| Compania Plastic Omnium SA** (Spain) | Chairman and Deputy Director |
| Plastic Omnium Holding (Shanghai) Co. Ltd** (China) | Chairman |
| Plastic Omnium Inc.** (United States of America) | Chairman |
| SOGEC 2 SA** (Belgium) | Deputy director |
| Compagnie Financière de la Cascade SRL** (Belgium) | Manager |
| Terms of office ended in 2015 | |
| Plastic Omnium Environnement SAS | Chairman and member of the Supervisory Committee through March 30, 2015 |
| Plastic Omnium Environment BV**(2) (The Netherlands) | Chairman through March 20, 2015 |
* Listed company.
** Member of the Compagnie Plastic Omnium Group/Burelle.
(1) Ex-Inergy Automotive Systèmes SAS.
(2) Ex-Plastic Omnium International BV.
French Age 55 Professional address: Plastic Omnium 1, Allée Pierre Burelle – 92300 Levallois-Perret
After graduating from ESSEC business school in 1982, Jean-Michel Szczerba joined Banque Vernes & Commerciale de Paris as a financial
Co-Chief Executive Director since December 15, 2015 Chief Operating Officer since March 16, 2010 Director since April 26, 2012 Holds 360,000 Plastic Omnium's shares
analyst. He joined Plastic Omnium in 1985, where he was successively Financial Controller, Finance Department Manager, and Chief Financial Officer, before becoming Deputy Chief Executive Officer in 2001. He was appointed Chief Operating Officer of Compagnie Plastic Omnium in 2010, Director in 2012 and co-Chief Executive Officer in 2015.
Jean-Michel Szczerba is a Chevalier de la Légion d'Honneur and a Chevalier de l'Ordre National du Mérite.
| French companies | |
|---|---|
| Burelle Participations SA** | Director |
| Plastic Omnium Finance SNC** | Manager |
| Plastic Omnium Gestion SNC** | Manager |
| Plastic Omnium Environnement Holding SAS** | Chairman |
| Groupe Progrès SA | Director |
| International companies | |
| Plastic Omnium GmbH** (Germany) | Manager |
| Hella Behr Plastic Omnium GmbH** (Germany) | Director |
| Yanfeng Plastic Omnium Automotive Exterior Systems Co. Ltd** (China) | Director |
| Plastic Omnium Holding (Shanghai) Co. Ltd** | Director |
| Plastic Omnium Inergy (Shanghai) Consulting Co. Ltd** (China) | Chairman |
| Plastic Omnium Inc.** (United States of America) | Director |
| Compania Plastic Omnium** (Spain) | Director |
| Plastic Omnium Auto Exteriors Spzoo** (Poland) | Manager |
| Plastic Omnium Auto Spzoo** (Poland) | Manager |
| Plastic Omnium Automotive NV** (Belgium) | Chairman and Director |
| Plastic Omnium Automotive Ltd** (Great Britain) | Director |
| Plastic Omnium Auto Exteriors (India) Pvt Ltd** (India) | Director |
| DSK Plastic Omnium BV** (The Netherlands) | Chairman and Director |
| Plastic Omnium Environment BV** (The Netherlands) | Member of the Supervisory Board since March 20, 2015 |
| B-Plas Plastic Omnium Otomotiv AS** (Turkey) | Vice-Chairman of the Board of Directors and Director |
| Terms of office ended in 2015 | |
| Plastic Omnium Environnement SAS | Chief Executive Officer and member of the Supervisory Committee through March 30, 2015 |
| Plastic Omnium International SAS*** | Chairman through October 31, 2015 |
| Plastic Omnium Auto Inergy France SAS**(1) | Chairman through March 31, 2015 |
| Plastic Omnium Auto Inergy Services SAS**(2) | Chairman through March 31, 2015 |
** Member of the Compagnie Plastic Omnium Group/Burelle.
(1) Ex-Plastic Omnium Management 1 SAS.
(2) Ex-Plastic Omnium Management 2 SAS.
French Age 69 Professional address: Plastic Omnium 1, Allée Pierre Burelle – 92300 Levallois-Perret
Paul Henry Lemarié holds a doctorate in physics from University of Paris-Orsay and a post-graduate degree (DEA) in Management and Finance from University of Paris-Dauphine.
Chief Operating Officer since May 15, 2001 Director since June 26, 1987 Holds 190,900 Plastic Omnium's shares
After completing a doctorate in physics at CEA, he began his career in the Finance Department of Paribas bank in 1973. He then joined Sofresid, an engineering group (steel, mining, offshore), before moving to Plastic Omnium Group in 1980 as Head of the 3P (Performance Plastics Products) Division. In 1985, he became Chairman of the Automotive Division. He was appointed Deputy Chief Executive Officer of Compagnie Plastic Omnium in 1987 and Chief Executive Officer in 1988. Appointed Chief Executive Officer of Burelle SA in April 1989, he became Chief Operating Officer of Burelle SA and Compagnie Plastic Omnium on May 15, 2001.
| French companies | |
|---|---|
| Burelle SA/* | Chief Operating Officer and Director |
| Burelle Participations SA ** | Chief Operating Officer and Director |
| Sofiparc SAS ** | Member of the Supervisory Committee |
| International companies | |
| Compania Plastic Omnium** (Spain) | Director |
| Terms of office ended in 2015 | |
| Plastic Omnium Environnement SAS | Member of the Supervisory Committee through March 30, 2015 |
* Listed company.
** Member of the Compagnie Plastic Omnium Group/Burelle.
French Age 70 Professional address: Burelle SA 1, rue François Ier – 75008 Paris
After earning a master's degree in English from the University of Paris-Sorbonne and graduating from Sciences Po, Éliane Lemarié devoted her professional career to the corporate information and communication sector.
Permanent representative of Burelle SA Director since April 28, 2009 Member of the Appointments Committee since July 22, 2014 Holds 395,996 Plastic Omnium's shares
She began her career as a journalist and copy editor in various written press publications as part of the Permanent Assembly of Chambers of Commerce and Industry (APCCI) from 1969 to 1975.
In 1976, she was hired by SOGEC to set up and develop a Public Relations, Media Relations and Publishing Department, a position she held until 1983.
In 1983, she founded and developed Irma Communication, a corporate communications consultancy with a client roster of French and international companies listed in Paris, New York and Mumbai, serving as Chairman and Chief Executive Officer until 2010.
| French companies | |
|---|---|
| Sofiparc SA** | Member of the Supervisory Committee |
| Burelle SA/* | Director |
| Union Industrielle | Chairman of the Supervisory Committee |
| International companies | |
| SOGEC 2 SA** (Belgium) | Deputy Director |
* Listed company.
** Member of the Compagnie Plastic Omnium Group/Burelle.
French Age 77 Professional address: Burelle SA 1, rue François Ier – 75008 Paris
Jean Burelle is a graduate of the Federal Institute of Technology (ETH) in Zurich, and holds an MBA from Harvard Business School. He began his career in 1966 at L'Oréal, before joining Compagnie Plastic Omnium in 1967 as Department Manager. In 1987, he was appointed Chairman and Chief Executive Officer, a position he held until 2001. Since then, he has been Chairman and Chief Executive Officer of Burelle SA, the majority shareholder of Compagnie Plastic Omnium.
Jean Burelle is Director of Compagnie Plastic Omnium. He is Chairman of Medef International.
Jean Burelle is an Officier de la Légion d'Honneur and an Officier de l'Ordre National du Mérite.
Director since January 1, 1970 Honorary Chairman since September 20, 2001 Holds 416,378 Plastic Omnium's shares
| French companies | |
|---|---|
| Burelle SA/* | Chairman and CEO |
| Burelle Participations SA** | Chairman and CEO |
| Sofiparc SAS** | Member of the Supervisory Committee |
| Sycovest 1 | Permanent representative of Burelle Participations SA, itself Director |
| Soparexo SCA | Member of the Supervisory Committee |
| Banque Hottinguer SA with Management Board | Member of the Supervisory Board and Compensation Committee |
| Medef International | Chairman |
| International companies | |
| Compania Plastic Omnium SA** (Spain) | Director |
| SOGEC 2 SA** (Belgium) | Chairman of the Board of Directors and Deputy Director |
| Terms of office ended in 2015 | |
| Plastic Omnium Environnement SAS | Member of the Supervisory Committee until March 30, 2015 |
* Listed company.
** Member of the Compagnie Plastic Omnium Group/Burelle.
French Age 53 Professional address: Dassault Systèmes 10, rue Marcel Dassault – 78140 Vélizy-Villacoublay
Holder of a master's degree in transport design from the Center for Creative Studies in Detroit, as well as a degree in industrial design
Director since April 28, 2011 Member of the Audit Committee since February 26, 2013 Chairman of the Audit Committee since February 24, 2015 Holds 900 Plastic Omnium's shares
from École Nationale Supérieure des Arts Appliqués in Paris, Anne Asensio began her career with Renault in 1987, where she was notably charged with the design of the Twingo, Clio and Mégane (Scenic) ranges. She then held several management positions with General Motors, leading the development of a number of concept cars.
She joined Dassault Systèmes in November 2007 as Vice President for Design, in charge of design and corporate identity.
Anne Asensio is a Chevalier de la Légion d'Honneur.
| Vice Chairman of Design Experience |
|---|
| Directors – Member of the Strategic Board |
| Director |
| Member of the Strategic Board |
| Member of the Global Advisory Council |
* Listed company.
French Age 66 Professional address: Presstalis 30, rue Raoul Wallenberg – 75019 Paris
After beginning her professional career in 1973 as an attorney in Paris, Anne-Marie Couderc joined the Hachette Group in 1982 as Deputy Corporate Secretary. She became the Group's Deputy Chief Executive Officer in 1993.
A Paris city councilor then Deputy Mayor and Member of Parliament for Paris, she was appointed Secretary of State for Employment in 1995, then Minister Attached to the Ministry of Labor and Social Affairs with responsibility for Employment until 1997.
At the end of 1997, Anne-Marie Couderc was appointed Chief Executive Officer and member of the Editorial Committee of Hachette Filipacchi Medias, and director of several publications.
She became Corporate Secretary of Lagardère Active in 2007, before joining Presstalis as Chief Executive Officer in August 2010, subsequently becoming Chairman of the Board of Directors.
Anne-Marie Couderc is an Officier de la Légion d'Honneur and an Officier de l'Ordre National du Mérite.
Director since June 20, 2010 Chairman of the Compensation Committee since December 31, 2013 Member of the Appointments Committee since July 22, 2014 Holds 1,350 Plastic Omnium's shares
| Chairman of the Board of Directors |
|---|
| Director and Chairman of the Compensation & Appointments Committee |
| Director and Chairman of the Compensation Committee and member of the Audit Committee |
| Member of the Supervisory Committee |
| Director |
| Director |
French Age 37 Professional address: 313, Terrasses de l'Arche 92727 Nanterre
After a career as a professional tennis player, Amélie Oudéa-Castera opted for academia rather than high-level sport. A graduate of IEP Paris and ESSEC while at the same time obtaining a master's degree in Law, she won a place at ENA, graduating in April 2004 and taking
Director and member of the Compensation Committee since January 1, 2014 Holds 900 Plastic Omnium's shares
up a position as auditor with the French Court of Auditors, acting as Legal Counselor and Rapporteur of the public report on the situation and outlook of the public finances.
In 2008, Amélie Oudéa-Castera joined the AXA Group, where she performed cross-cutting assignments for the Group CFO. In 2010, she was appointed Director of Strategic Planning. In 2011, she was named Director of Marketing, Brand and Services at AXA France and in 2012 her scope of responsibility was extended to digital business. In 2015, she was appointed CEO of AXA Particuliers/Professionnels, the retail entity of AXA France, while retaining the responsibility of digital business, brand and partnerships of AXA France.
| Deputy Chief Executive Officer |
|---|
| Director of Digital Business, Brand Partnerships |
| Member of the Executive Committee |
| Member of the Strategic Board of the Digital Business Division |
| Director |
| Legal Counselor |
French Age 53 Professional address: Banque Martin Maurel 17, avenue Hoche – 75008 Paris
After starting her professional career in 1985 as a business attorney in the law firm Gide Loyrette Nouel, Lucie Maurel Aubert joined, in
Term of office ends in 2018
Director since December 15, 2015 Holds 900 Plastic Omnium's shares 2002, the family bank Martin Maurel in which she has been a Director since 1999.
She was appointed as the Deputy Chief Executive Officer of the Compagnie Financière Martin Maurel in 2007, and then as the Vice Chairman and Deputy CEO in 2011. Moreover, she is CEO of the Banque Martin Maurel.
Lucie Maurel Aubert is a Chevalier de la Légion d'Honneur.
| French companies | |
|---|---|
| Compagnie Financière Martin Maurel | Vice Chairperson and Deputy Chief Executive Officer |
| Banque Martin Maurel | Chief Executive Officer |
| Rotschild & Co. | Member of the Supervisory Board |
| Montupet SA | Member of the Supervisory Board |
| French Bankers' Association | Vice Chairperson |
| Deposit Guarantee Fund | Member of the Supervisory Board |
| St Joseph Hospital Foundation | Director |
| Théâtre du Châtelet | Director |
| Terms of office ended in 2015 | |
| Aéroport de Marseille | Member of the Supervisory Board |
French Age 56 Professional address: 46, rue du Ranelagh 75016 Paris
Jérôme Gallot graduated from IEP Paris and ENA and was first appointed at the Cour des comptes (Court of Auditors) in 1985, then with the Ministry of Finance, where he was the Managing Director of the Competition, Consumer Affairs and Anti-Fraud Division (1997-2003).
`Term of office ends in 2018
Director since December 15, 2006 Chairman of the Audit Committee until February 24, 2015 Member of the Audit Committee since July 19, 2011 Member of the Appointments Committee since July 22, 2014 Holds 5,400 Plastic Omnium's shares
He then joined the Executive Committee of Caisse des Dépôts, where he was responsible for Pension and Employee Benefit Financing and International Operations, before becoming Executive Chairman of CDC Entreprises, CDC's private equity arm. When France created a Strategic Investment Fund, he was appointed to its Executive Committee.
In February 2011, Jérôme Gallot was appointed Chief Executive Officer of Veolia Transdev and acted as Consultant to the Chairman from January 2013 to February 2014. He is also a Director of Nexans and Caixa Seguros, and a non-voting Director of NRJ Group.
Jérôme Gallot is a Chevalier de la Légion d'honneur.
| French companies | |
|---|---|
| JGC | Manager |
| SP 3H | Director |
| Acerde SAS | Member of the Supervisory Board |
| Nexans SA* | Director |
| NRJ Group | Non-voting Director |
| International companies | |
| Caixa Seguros SA (Brazil) | Director |
* Listed company.
German Age 72 Professional address: AutoValue GmbH Savignystrasse 34 – 60325 Frankfurt-am-Main
Prof. Dr. Bernd Gottschalk holds a doctorate in economics from the University of Hamburg, and a degree from Stanford University in California. He began his career at Daimler-Benz as Communications Director, before becoming Chairman of the Brazilian subsidiary.
In 1992, he was appointed to the Board of Management of the Daimler-Benz Group, Global Vice President of the Commercial Vehicles Division. In 1997, he was appointed Chairman of the Federation of German Automotive Industry (VDA) and in 2007 created AutoValue GmbH, an automotive consultancy that he has headed since that date.
Director since April 28, 2009 Member of the Compensation Committee since December 13, 2013 Holds 900 Plastic Omnium's shares
| German companies | ||
|---|---|---|
| Plastic Omnium GmbH** | Member of the Advisory Board | |
| Serafin Group, Munich | Member of the Advisory Board | |
| AutoValue GmbH | Managing Partner | |
| Schaeffler GmbH | Director | |
| Jost Group | Director | |
| Joh Hay GmbH & Co. KG | Chairman of the Board of Directors | |
| Facton GmbH | Chairman of the Board of Directors | |
| Woco Group | Chairman of the Board |
** Member of the Compagnie Plastic Omnium Group/Burelle.
French Age 65 Professional address: Financière du Centre 70, avenue Édouard Herriot 71009 Mâcon
A graduate of the Federal Institute of Technology (ETH) in Zurich, Vincent Labruyère began his career in 1976 at Éts Bergeaud Mâcon, a subsidiary of Rexnord Inc., a US-based manufacturer of materials preparation equipment.
In 1981, he became head of Imprimerie Perroux, a printer of checks and bank forms, which he diversified in 1985 by creating DCP Technologies, a subsidiary specializing in credit card manufacture and encoding.
In 1989, he founded the SPEOS Group, specialized in desktop publishing and electronic archiving of management documents and the manufacture of means of payment, which he sold to the Belgian Post Office in 2001.
He then joined Labruyère-Eberlé as Chief Executive Officer and then Chairman of the Management Board. Labruyère-Eberlé is a familyowned company operating vineyards in France and the United States, which also operates supermarkets and invests growth capital in France and abroad.
Vincent Labruyère is a Director of Banque Martin Maurel, Slota, Mathon Développement and Imprimerie Perroux.
Director and member of the Audit Committee since May 16, 2002 Holds 10,332 Plastic Omnium's shares
| French companies | |
|---|---|
| Société Financière du Centre SAS | Chairman |
| Labruyère-Eberlé SAS | Chairman of the Management Board |
| Société Commercial de Bioux SAS | Member of the Management Board |
| Perroux et fils | Director |
| Martin Maurel | Director |
| Slota SA | Director |
| SNPI SCA | Member of the Supervisory Board |
| Pige SA | Permanent representative of Labruyère-Eberlé, itself Director |
Dr. Alain Mérieux
French Age 77 Professional address: Institut Mérieux 17, rue Bourgelat – 69002 Lyon
Dr. Alain Mérieux is Chairman of Institut Mérieux, a family-owned holding company for three industrial biology companies dedicated to serving public healthcare worldwide: bioMérieux (in vitro diagnostics), Transgène (immunotherapy to treat cancer and infectious diseases) and Mérieux NutriSciences (food safety, environment, nutrition). Institut Mérieux also comprises: ABL, a research company, Mérieux Développement, an investment company operating in healthcare. Institut Mérieux currently has over 15,000 employees in more than 40 countries worldwide.
Dr. Alain Mérieux is Chairman of the Fondation Mérieux, an independent family foundation registered as a public charity. He is Honorary Chairman and Director of Fondation Christophe et Rodolphe Mérieux, which operates under the aegis of the Institut de France. These two foundations are dedicated to the fight against infectious diseases in developing countries.
He is a Member of the Ordre National du Mérite and a Grand Officier de la Légion d'Honneur.
Director since June 23, 1993 Holds 6,318 Plastic Omnium's shares
| Institut Mérieux | Chairman and CEO |
|---|---|
| Fondation Mérieux | Chairman of the Board of Directors and Director |
| Fondation Christophe et Rodolphe Mérieux – Institut de France | Honorary Chairman and Director |
| Biomérieux SA* | Director |
| Fondation Pierre Fabre | Director |
| Fondation Pierre Vérots | Director |
| CIC Lyonnaise de Banque | Director |
| Transgène SA | Director |
| International companies | |
| BioMérieux Italia SpA (Italy) | Director |
| Mérieux NutriSciences (United States of America) | Director |
* Listed company.
French and American Age 76 Professional address: 83, rue Jules Rein 78600 Le Mesnil-le-Roi
A graduate of the Institut d'Études Politiques de Paris and holder of a Masters Degree in Business Administration from Harvard University, Jean-Pierre Ergas had headed up various industrial manufacturing groups in the metallurgy and packaging sectors in Europe and the United States for over thirty years.
Chief Executive Officer of Cebal and then Cégédur Pechiney, Chairman of the Chambre Syndicale de l'Aluminium, he was appointed Deputy Chief Executive Officer of Pechiney Group in 1986. Jean-Pierre Ergas has lived in Chicago (USA) since 1989 and was Chairman and Chief Executive Officer of American National Can in 1990. He served as Chairman and Chief Executive Officer of Alcan Europe from 1995 to 2000 and subsequently became Chief Executive Officer of BWAY Corporation (NYSE) in 2000, a company he sold in 2010.
Jean-Pierre Ergas is a Director of Dover Corporation (NYSE), and Managing Partner of Ergas Ventures LLP and Sagre LP.
Jean-Pierre Ergas is a Chevalier de la Légion d'Honneur.
| French companies | |
|---|---|
| FIBI-Aplix SA | Director |
| International companies | |
| Dover Corporation (United States of America) | Director |
| Sagre Group LP (United States of America) | Director |
| Ergas Ventures LLC (United States of America) | Director |
During its meeting held on February 24, 2015, the Board of Directors decided to renew the combining of the duties of Chairman and CEO and re-appointed Laurent Burelle to this position.
This decision was taken in line with the recommendations of the Appointments Committee, in the best interest of the Company. Since its establishment, the General managers of Compagnie Plastic Omnium have had a clear vision of the Group's prospects, based on their perfect knowledge of the Group's activities and its local and international environment. The Company has to be responsive in a highly competitive international environment. Furthermore, this mode of governance is best suited to the specific characteristics of Compagnie Plastic Omnium and the structure of its shareholding, composed primarily of the family group committed to the Group's long-term development.
In its meeting held on December 15, 2015, on the recommendation of the Chairman and Chief Executive Officer and after the validation of the Appointments Committee, the Board of Directors decided to appoint Jean-Michel Szczerba as Co-CEO. This appointment is intended to guarantee continuity and governance of the Group and pave the way for the succession of the Chairman and CEO.
The work of the Board is set out in Article 12 of the bylaws, and its organization is described in Article 1 of the Internal Procedures of the Board of Directors. The Internal Procedures may be amended by the Board of Directors in response to changes in laws and regulations, but also to changes in its own organization.
The Board of Directors meets as often as the interests of the Company require and, pursuant to the Internal Procedures, at least four times per year. Board meetings may be held by any means of videoconferencing or telecommunication allowing the identification of directors and ensuring their effective participation in accordance with the terms and conditions laid down in the Internal Procedures.
The Chairman of the Board of Directors directs the proceedings and ensures compliance with the provisions of the Internal Procedures. He seeks to ensure the quality of discussions and to promote collective decision-making. He also ensures that the Board devotes sufficient time to its discussions, giving each item on the agenda time proportionate to the importance it represents for the Company. The directors collectively ensure that there is a correct balance in the speaking time of each one of them. The Chairman ensures that the questions asked in line with the agenda receive appropriate answers.
The Secretary of the Board of Directors assumes responsibilities of the secretariat of the Board and draws up the minutes of its meetings.
Pursuant to the provisions of Article 11 of the bylaws, each director must own at least nine hundred shares in the Company.
The Shareholders' Meeting of April 30, 2015 renewed the directorships of Laurent Burelle, Paul Henry Lemarié, Jean-Michel Szczerba, the company Burelle SA represented by Éliane Lemarié, Jean Burelle, Anne-Marie Couderc, Jean-Pierre Ergas, Jérôme Gallot, Bernd Gottschalk and Alain Mérieux for a new three years period.
After being actively involved in the work of the Board of Directors for twenty-five years, Jean-Pierre Ergas resigned from his directorship at the end of the Board meeting of December 15, 2015.
Jean-Pierre Ergas had been appointed as director of Compagnie Plastic Omnium in 1990.
At its meeting of December 15, 2015 and based on the recommendation of the Appointments committee, the Board of directors appointed Lucie Maurel Aubert as director by co-optation for Jean-Pierre Ergas' remaining term of office, i.e. until 2018.
With her experience, Lucie Maurel Aubert seamlessly complements the competence of the Board, specifically in the financial field. Lucie Maurel Aubert serves as an independent director, free of motive, accessible and competent.
The ratification of Lucie Maurel Aubert's appointment as director shall be subject to the approval of the Shareholders' Meeting of April 28, 2016.
Each director has continuous information and means suited to the performance of his or her mission. The directors have a duty of vigilance and fully independent participation in the work and decisions of the Board of Directors and, where applicable, its Review Committees.
All are subject to compliance with the rules applicable to conflicts of interest.
With regard to the independence criteria mentioned in the AFEP-MEDEF Code, a member of the Board of Directors is independent if he or she does not maintain any relation with the Company, its Group or its Management that might compromise the exercise of his or her freedom of judgment. The criteria laid down in the AFEP-MEDEF Corporate Governance Code are:
not to be an executive corporate officer of a company in which the Company directly or indirectly holds a directorship, or in which a directorship is held by an employee, designated as such, or a corporate officer of the Company (currently or within the previous five years) (criterion No. 2);
not to be customer, supplier, investment banker, corporate banker of significant importance to the Company or the Group, or for which the Company or its Group represents a significant part of its activity (criterion No. 3);
The Appointments Committee's meeting of December 10, 2015 and the Board of Directors' meeting of December 15, 2015, reviewed on a case-by-case basis the situation of each of the members concerned with regard to the independence criteria mentioned in the AFEP-MEDEF Code.
| Criterion 1 | Criterion 2 | Criterion 3 | Criterion 4 | Criterion 5 | Criterion 6 | Qualification applied |
|
|---|---|---|---|---|---|---|---|
| Anne Asensio | yes | yes | yes | yes | yes | yes | Independent |
| Anne-Marie Couderc | yes | yes | yes | yes | yes | yes | Independent |
| Lucie Maurel Aubert | yes | yes | yes | yes | yes | yes | Independent |
| Amélie Oudéa-Castera | yes | yes | yes | yes | yes | yes | Independent |
| Jérôme Gallot | yes | yes | yes | yes | yes | yes | Independent |
| Bernd Gottschalk | yes | yes | yes | yes | yes | yes | Independent |
As a result, on December 31, 2015, 6 out of the 13 members of the Board of Directors, i.e. 46.15%, qualified as independent, with the AFEP-MEDEF Code recommending a minimum threshold of 33.33% independent directors for controlled listed companies.
Under the law and as part of the rights and duties of directors defined in the Internal Procedures of the Board of Directors of Compagnie Plastic Omnium and in accordance with the AFEP-MEDEF Code, directors are subject to the rules applicable to the situation of conflict of interests and stock exchange code of ethics.
In this respect, based on each director's declarations, the Board did not identify any conflict of interests.
Laurent Burelle, Jean Burelle, Paul Henry Lemarié and Éliane Lemarié are related.
To the Company's knowledge, none of its directors has been convicted of fraud, none has been involved as a corporate officer in a bankruptcy, receivership or liquidation in the past five years, and none has been the subject of any official charges or public sanctions pronounced by a statutory or regulatory authority. None of the members of the Board of Directors has been disqualified by a court from acting as a member of a governing, administrative or supervisory body of an issuer, or from taking part in the management or business of an issuer during the past five years.
The method for the organization and working of the Board of Directors of the Compagnie Plastic Omnium would enable it, where applicable, to prevent any misuse of control by a shareholder, largely due to the presence of independent directors within the Company.
No corporate officers are bound either to the company or to any of its subsidiaries through service contracts providing benefits of any kind.
The Board of Directors is aware of the rules to be applied to prevent insider misconduct, in particular with regard to the periods during which trading in securities of the Company is prohibited. It has had the opportunity to update the charter for the prevention of insider trading and issue recommendations to Senior Management.
Based on the legal texts, regulations and recommendations in place, this code states that inside information must be transmitted and used only for professional purposes.
This charter requires the exercise of great caution, where the person with inside information is carrying out financial transactions or is having financial transactions carried out on Plastic Omnium's securities in the stock exchange and points out that misconduct in this regard is subject to criminal penalties. Directors with permanent insider status are particularly requested not to carry out transactions on the securities of Plastic Omnium during certain periods if they have insider information. The Internal procedures of the Board of Directors states the Board members' obligation to respect the terms of the charter.
During the meeting of the Board of Directors of December 15, 2015, the directors received the schedule for 2016 with open and closed periods enabling them to trade in Plastic Omnium's shares.
Finally, the executive corporate officers notify the Autorité des Marchés Financiers (AMF) of each transaction carried out by them or by their relatives on Plastic Omnium's securities. They are periodically reminded of this obligation by the Company (cf. the summary of transactions carried out by corporate officers in 2015 on the securities of Plastic Omnium see chapter 7.3).
Preparing and holding meetings of the Board of Directors and its Committees require ever greater availability and involvement from each director. In this respect, the directors of the Compagnie Plastic Omnium are regularly informed of all the Company's activities and its performances.
On the agenda, directors may propose in a totally independent manner work for the Board and its committee comprising any topic useful for corporate governance.
Each committee prepares the discussions and proceedings of the Board in its domain.
With their expertise coming from outside and freedom of judgment, the directors jointly ensure the measures adopted contribute to implementing the strategy of the Plastic Omnium Group. The Board debates issues transparently and in detail.
In 2015, the Board of Directors met four times. The average attendance rate at Board meetings was 93%. The attendance rate at the meetings of Board of Director Committees is specified in the statements on pages 31 to 32.
Details of the distribution of directors' fees is given on page 39. The rules for the distribution of fees allocated for 2015 take on board the recommendations of the AFEP-MEDEF Code into account, with a major variable portion taking account of the diligence of each of the directors at Board meetings and the effective presence at Committee meetings.
The directors monitor the Group's economic and financial management and help define its strategy. They examine and approve the broad lines of action laid down by senior management, which then implements them.
In this context, the Board constantly seeks a working method which, while strictly complying with the Law, is conducive to the conditions of good corporate governance.
The work of the Board of Directors is based on its Internal Procedures, which aim at completing and specifying the legal, regulatory and statutory rules and the industry recommendations that the Board refers to. The Internal Procedures are published on Plastic Omnium's website.
In 2015, apart from the regular monitoring of the Group's activity (markets, business, geographical development, competition, quantitative and qualitative objectives), the Board of Directors continued its work on defining the Compagnie Plastic Omnium's strategy and monitoring its implementation.
Continuous dialogue with Management has enabled the Board to prepare strategy, especially by analyzing the strategic interest of acquisition transactions, their impact on the Company's financial structure and long-term development capacities.
Thus, the Board took part in the strategic thinking related to the proposed acquisition of Faurecia's Exterior Systems business.
The Board also focuses on monitoring the acquisitions made in the previous years and requires a statement of operations carried out to be submitted to it, which mainly includes integration within the Group, developed synergies, implementation of the Business plan prepared during the acquisition and value creation for Plastic Omnium.
In order to benefit from the best possible knowledge of Plastic Omnium's businesses, the Board of Directors holds regular meetings at the Group's French or international industrial sites. Thus, in 2015, the Board met on October 23, 2015 in the new α-Alphatech research center of the Auto Inergy Division located in the Oise Region and, during the site visit, various operational heads were able to present the technological developments to the directors.
The Company's financial position and cash position are analyzed at least twice a year during the Board's meeting when approving the financial statements and reviewing the half-yearly financial statements. If required, they may be reviewed at any time.
The Company's commitments are reviewed as part of the annual renewal of the authorizations given to the Chairman and CEO and the delegations that he grants.
The Board's discussions and decisions are facilitated by the work of its Review Committees which report to it after each of their meetings. The details of the missions of each Committee are given in the Internal Procedures of the Board of Directors.
In 2015, Board Committees were once again mandated by the Board to prepare its deliberations. The details of the composition of these Committees, their missions and work in 2015 are given below.
Board of Director Committees act strictly within the framework of the missions allocated to them by the Board. They actively prepare its work, put forward proposals, but have no decision-making powers.
| Composition | Composition as at December 31, 2015: • Anne Asensio (Chairman) • Jérôme Gallot • Vincent Labruyère |
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|---|---|---|---|---|---|
| Since February 24, 2015, the Committee has been chaired by Anne Asensio, an independent director and member of the Committee since February 26, 2013. In compliance with the AFEP-MEDEF Code recommendations, the number of independent directors is two from three, |
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| i.e. 67%. The directors who are members of the Audit Committee have the necessary qualification due to their professional experience and good knowledge of the Group's accounting and financial procedures, which are regularly reported to them. |
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| The Chairman and CEO is not a member of the Committee. | |||||
| The Committee had the opportunity to hear the directors in charge of the fields whose activity is reviewed by it, lar | |||||
| gely as part of the processes related to risk management and control. | |||||
| The Statutory Auditors attend Committee meetings. | |||||
| The Committee did not seek advice from external experts. | |||||
| In 2015, the Audit Committee met three time with an attendance rate of 100%. | |||||
| Principal missions | • Monitoring the basis of preparation for the Group's financial information • Monitoring the legal audit of the financial statements and consolidated financial statements by the Statutory Auditors |
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| • Reviewing the Statutory Auditors' audit plans and engagement program and the outcome of their verifications • Monitoring the independence of the Statutory Auditors |
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| • Monitoring the efficacy of the Internal Control and Risk systems | |||||
| • Monitoring the Group's major exposures and sensitivity to risks | |||||
| • Warning role of the Chairman of the Board in the event of detection of a major risk, which, according to him, has not been treated appropriately |
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| • Reviewing the program and objectives of the Internal Audit Department, as well as the methods and procedures of the internal control systems used |
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| Principal activities | Reviewing the annual results for 2014 and the 1st half of 2015 | ||||
| in 2015 | • Reviewing the Statutory Auditors' report | ||||
| • Reviewing the audit plan and the outcome of the verification carried out, their recommendations as well as the action taken as part as the statutory audit |
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| • Reviewing the audits carried out by the Statutory Auditors with regard to social, environmental and societal information |
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| • Proposed renewal of the term of office of the Statutory Auditors | |||||
| • Monitoring the Internal Audit activity, the Committee having concluded that Internal Audit has carried out a detailed review of the key processes with exacting criteria. |
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| • Reviewing risk factors and risk mapping, the Committee having concluded that risk management is controlled | |||||
| and assumed at the operational level and the level of corporate departments | |||||
| • Monitoring the results of programs raising awareness with regard to risk of fraud and prevention of corruption • Information on legal risks and potential disputes and major facts that are likely to have a significant impact on the financial situation of Plastic Omnium |
| Composition as at December 31, 2015: • Anne-Marie Couderc (Chairman) • Amélie Oudéa-Castera • Bernd Gottschalk |
|---|
| Since December 13, 2013, the Committee has been chaired by Anne-Marie Couderc, an independent director and Committee member since December 13, 2013. In compliance with the AFEP-MEDEF Code recommendations, the number of independent directors is three, i.e. |
| 100%. The directors actively participate in Committee meetings, acting in the interests of the shareholders and exercising their judgment in a completely independent manner. In 2015, the Compensation Committee met three time with an attendance rate of 100%. |
| • Drafting proposals for the compensation of the Chairman-CEO and the Chief Operating Officer and for the pension and insurance plans • Fixing the budget for the directors' fees to be submitted to the Shareholders' Meeting and the distribution method • Determining the long-term incentive plan policy, mainly including plans for the allocation of free shares |
| • Reviewing the components of the fixed salary and bonus of executive corporate officers and recommendations to the Board • Analyzing the performance of executive corporate officers in 2014 and recommendation to the Board for an annual bonus • Analyzing the performance of executive corporate officers in 2015 and recommendation to the Board for an annual bonus for 2015 • Say on Pay: preparing the resolutions submitted at the Shareholders' Meeting of April 30, 2015 • Reviewing the stock-option plan set up by the Board of Directors on July 21, 2015 and proposed allocation to executive corporate officers • Distribution of directors' fees pursuant to the rules providing a majority variable share |
| Composition | Composition as at December 31, 2015: • Anne-Marie Couderc (Chairman) • Éliane Lemarié • Jérôme Gallot |
|---|---|
| Since July 22, 2014, the Committee has been chaired by Anne-Marie Couderc, an independent director and Committee member since the same date. In compliance with the AFEP-MEDEF Code recommendations, the number of independent directors is two from three, i.e. |
|
| 67%. The directors actively participate in Committee meetings, acting in the interests of the shareholders and exercising their judgment in a completely independent manner. |
|
| In 2015, the Appointments Committee met once with an attendance rate of 100%. | |
| Principal missions | • Consideration and recommendation to the Board regarding procedures for the exercising of powers by Senior management • Opinion on the proposal of the Chairman of the Board of Directors for the appointment of Chief Operating Officers • Recommendation for new directors to the Board |
| • Examination of the qualification of independent directors, reviewed by the Board of Directors every year • Verification of the proper application of the Corporate Governance Code referred to by the Company • Discussion on issues pertaining to the governance related to the working and organization of the Board • Preparation of succession plans for executive corporate officers in the event of unforeseen vacancies |
|
| Principal activities in 2015 |
• Reviewing the succession plans of executive corporate officers to ensure continuity of Senior Management • Reviewing the conditions for the exercising of powers by Senior Management: uniqueness of the responsibilities of the Chairman and Chief Executive Officer • Discussing the composition of the Board: diversity, complementary nature of profiles, competence, gender |
| balance • Selecting and meeting with candidates, proposed candidature of Lucie Maurel Aubert as new director |
|
| • Reviewing and validating the Chairman's proposal on the renewal of the term of office of Chief Operating Officers Jean-Michel Szczerba and Paul Henry Lemarié |
|
| • Reviewing and validating the Chairman's proposal as to the appointment of Jean-Michel Szczerba as Co-Chief Executive Officer |
|
| • Discussing the composition of Board Committees • Reviewing the independence of each director with respect to the criteria listed in the AFEP-MEDEF Code |
Every year, the Board carries out a formal assessment, stipulated by the AFEP-MEDEF Code, of its composition, organization and method of working, largely so as to ensure, under certain conditions, that the agenda of its work covers the extent of its missions, that major issues have been suitably prepared and discussed and so as to to measure the contribution of each member in the Board's work.
This assessment complies with the recommendations of the AMF and those of the AFEP-MEDEF Code referred to by the Company.
The directors once again exercised total freedom of judgment in 2015. This freedom of judgment allowed them to take part with full independence in the work and collective decisions of the Board of Directors, and, for those concerned, the preparatory work and the Board Committee's proposals.
The Board concluded that the quality of its meetings, with regard to what was considered as avenues of progress at the end of the self-assessment in late 2014, continues to improve, mainly with respect to the analysis of the Group's strategic challenges, which are regularly discussed and debated.
This year as well, the strategic approach was reviewed in detail in the Board's work with regard to the development of the countries and markets in which the Group operates.
In 2015, the Board was fully satisfied with the tempo, frequency of the meetings and the format of the information forwarded to it as part of activity in general and the principal events of the Group's life. The availability of documentation prior to Board or Committee meetings, in keeping with the confidentiality requirements and time constraints that the Company is subject to, enhance the quality of discussions.
The Compagnie Plastic Omnium remains committed to the application of rules of corporate governance laid down by AFEP-MEDEF, by referring to the Corporate Governance Code of listed companies, available on the website http://medef.fr.
The table below provides the Company's explanations for the recommendations of the AFEP-MEDEF Code that are not applied.
| Recommendations of the AFEP-MEDEF Code |
Compagnie Plastic Omnium practices and justifications |
|---|---|
| Terms of office of directors must be staggered so as to prevent reappointment en masse (Article 14) |
The term of office of ten from the thirteen members of the Board of directors expires in 2018, the terms of office of two Board members expire in 2017 and that of one expires in 2016. The Company wished to prioritize a frequent appointment principle for directors by stipulating a statutory three-year term of office. |
| Adequate time for reviewing the accounts by the Audit Committee, at least two days before the Board meeting (Article 16.2.1) |
As part of the publication of the annual and interim results, the meeting of the Audit Committee for reviewing the financial statements is close to that of their presentation to the Board of Directors. It may be noted that the Board and its Audit Committee have prior useful information for accomplishing their audit mission, which is sent to them systematically prior to the meetings. |
Internal control and risk management are the responsibility of senior management, and require the involvement of all stakeholders in the Company, in accordance with the tasks assigned to them. Compagnie Plastic Omnium's internal control and risk management systems are designed to ensure:
effective and controlled implementation of guidelines and objectives set by senior management, particularly with regard to risk;
the smooth running of Compagnie Plastic Omnium's internal processes, particularly those relating to the safeguarding of the Group's assets in the broadest sense;
Internal control and risk management systems play a critical role in Compagnie Plastic Omnium's management. However, they cannot provide an absolute assurance that the Company's objectives will be achieved or that all risks will be eliminated.
Compagnie Plastic Omnium is actively working to reinforce its internal control and risk management systems as part of a continuous improvement process that relies in large part on the Implementation Guide to the Reference Framework for Risk Management and Internal Control Systems of the Autorité des Marchés Financiers (AMF).
This report describes the internal control system of Compagnie Plastic Omnium, the parent company of the Plastic Omnium Group. It therefore focuses on the procedures intended to guarantee (i) the reliability of the consolidated financial statements and (ii) the Company's control over entities in which it has a majority interest.
Compagnie Plastic Omnium regularly reviews and assesses the operations of significant investments over which it exercises joint control, and uses all of its influence to ensure that these entities comply with its internal control requirements.
Compagnie Plastic Omnium is built around two Divisions:
Under the supervision and control of Compagnie Plastic Omnium's senior management, these two autonomous divisions are each responsible for implementing the means and resources necessary to achieve the financial targets set in their annual budgets approved by senior management.
The internal control and risk management system deployed within the Group is based on the rules and principles of its internal control framework and the implementation of processes aimed at continuously improving the management of the main risks to which it may be exposed.
The organization of the system involves all Company employees. However, its oversight and controls are performed by the following seven key functions:
The senior management of Compagnie Plastic Omnium sets the guidelines for organizing and running the internal control and risk management system.
They are assisted in this task by the Executive Committee, which has management and decision-making powers with regard to the Company's business. It is composed of the Chairman-CEO, Co-CEO and Chief Operating Officer, the Director of Strategy and Development, Director of Finance, General Secretary – Legal Director, Director of Human Resources, Director of Communication and the Executive Directors of various Divisions. It meets once a month to review the Group's business performance and recent developments, and to discuss its outlook. It addresses cross-business issues such as sales and marketing, organization, investment, legal and human resources issues, safety and the environment, research and development, mergers and acquisitions, and financing. Each month, it analyzes the results and balance sheets of all Divisions and subsidiaries, including trends in respect of capital expenditure and working capital compared with the situation of the prior year and monthly budget projections. It also reviews three-month forecasts for the consolidated income statement and balance sheet, and plays a pro-active role in steering the Company's management. It also validates updates of current-year forecasts. Every June, it analyzes the strategic five-year plans for each Division and the Group. These plans are then used in preparing the budget, which is definitively adopted in December each year.
The cornerstone of Compagnie Plastic Omnium's internal control system is its Internal Control Framework, which sets out the rules and principles applicable to the companies it controls. It comprises a Code of Conduct, Internal Control Rules and Procedures and an Accounting and Financial Procedures Handbook.
• The Code of Conduct: in addition to its economic responsibilities, Compagnie Plastic Omnium attaches great importance to human rights and sustainable development. Compagnie Plastic Omnium is a signatory of the UN Global Compact, a set of principles that stand alongside the Plastic Omnium Code of Conduct to exemplify the spirit of responsibility that has always informed the Group's commitment. Together, these texts highlight the values governing individual and collective conduct that Compagnie Plastic Omnium aims to promote, and which determine the fundamental principles in which the rules and procedures of its internal control system are rooted. In 2010, Compagnie Plastic Omnium adopted a Code of Conduct on practices governed by competition law, which has been circulated throughout the Group as part of a compliance program.
The Code of Conduct applies to Compagnie Plastic Omnium and to all the affiliates in which it holds a majority stake. Plastic Omnium does everything in its power to encourage other affiliates to establish rules of conduct consistent with the provisions of the Code. It is the responsibility of senior management, members of the Executive Committee, divisional CEOs and plant managers to ensure that all employees are aware of the contents of the Code, and that they have sufficient resources to comply with its provisions. In return, the Code requires individual employees to behave in a way that demonstrates a personal and ongoing commitment to complying with the prevailing laws and regulations, and with the ethical rules it lays down.
The rules cover routine and non-routine business operations alike. They are a single and comprehensive reference framework designed to ensure that the internal control procedures implemented by the Group are both consistent and appropriate. In a number of cases, they include procedures that describe their application.
• The Accounting and Financial Procedures Handbook: Compagnie Plastic Omnium has an Accounting and Financial Procedures Handbook prepared in accordance with IFRS. These accounting procedures are applicable to all consolidated companies.
As part of a process of continuous improvement in terms of internal control, the Internal Control Framework is subject to additions, and is updated regularly to reflect established practices, as well as changes in organization and the applicable regulations.
The main risks to which Compagnie Plastic Omnium is exposed are described in the "Risk Management" section. This section also describes the key measures and processes used to effectively prevent and manage these risks.
The risk management system incorporates, as part of the organizational framework presented in this report, a process of mapping and analyzing the main risks facing the Company, the purpose of which is to verify the pertinence of approaches implemented at Group level and to take action to strengthen or complement existing approaches. At Group level, this process is led by the Risk Management Department in conjunction with the operational management teams and corporate departments.
The system is overseen by senior management.
Compagnie Plastic Omnium seeks to combine accountability and independence of judgment at the three levels responsible for controlling its operations and its risk management system: the operational management departments, corporate departments and the Internal Audit Department.
The operational management teams implement the structures and resources necessary for the satisfactory implementation of the rules and principles governing internal control in their respective activities. They are tasked in particular with assessing the pertinence of remedial measures implemented as a result of assignments undertaken by Internal Audit. They are also responsible for identifying the risks inherent to their own activity and for taking reasonable steps to control them.
The corporate departments, namely Human Resources and Sustainable Development, Corporate Finance and Information Systems, and Legal Affairs, have the broadest powers in their areas of expertise, and under the supervision of senior management, to establish rules and procedures applying within Compagnie Plastic Omnium. They are tasked with coordinating and monitoring the activities of their functional networks with a view to protecting the interests of the Group and all its stakeholders.
In the particular area of internal control and risk management, they are responsible for analyzing the risks inherent in their activities and for defining the appropriate structures and systems to ensure their smooth running. They prepare and update the Internal Control Framework and cross-business approaches to risk management. In doing so, they are required to ensure the adequacy of the Internal Control Framework in respect of prevailing standards, regulations and laws, and to implement the appropriate means for relaying the information they produce.
Compagnie Plastic Omnium has a centralized Internal Audit Department that is part of the Corporate Risk Management Department and reports to the Corporate Secretary. It also reports regularly to the Internal Control Committee, which is responsible for overseeing internal control procedures. It conducts assessments of the general system, and ensures the efficiency of its implementation.
The Internal Audit Department conducts audits on a scope covering all subsidiaries, whether or not Compagnie Plastic Omnium exercises control. At the conclusion of each audit, it makes recommendations to the audited units, which respond with appropriate action plans subject to systematic monitoring by divisional management teams. The annual internal audit plan is based on criteria relating to how often audits are performed and to each entity's risk and control environment. None of the audits performed in 2015 revealed any serious weaknesses in the internal control and risk management system.
The Internal Audit Department also oversees annual internal control self-assessment campaigns, launched in 2006. The questionnaire design is based on the Implementation Guide to the AMF Framework. It is both an effective assessment tool and a means of raising the awareness of local organizations. Lastly, it is a useful tool for the Internal Audit Department in preparing its audit work.
Note that the application of international safety, environmental and quality assurance standards, in addition to the audit of our insurance companies and our customers, gives rise to regular specialized audits conducted by independent bodies. As of December 31, 2015, 88% of the eligible facilities that were at least 50%-owned had earned ISO 14001 certification and 85% were OHSAS 18001-certified.
The internal control rules and procedures are available to employees on the home page of the Group's intranet portal. However, the internal control system is deployed largely through formal documents, awareness raising, training programs and reporting processes conducted by the corporate departments. These activities, which include the self-assessment referred to above, allow local management teams to appreciate senior management's profound commitment to internal control processes.
Finally, the relaying of information on the preparation of financial and accounting data is subject to specific processes described later in this report.
Senior management, assisted by the Risk Management Department, is responsible for the overall oversight of the Company's internal control and risk management processes.
The Risk Management Department exercises a critical oversight role concerning the internal control system as part of its specific remit. It reports its analysis and recommendations to senior management, to which it reports directly, as well as the Internal Control Committee. It is also responsible for the process of identifying business risks undertaken at Group level, and coordinates the preparation of the ensuing risk management plan.
The Internal Control Committee coordinates the internal control system, and ensures that it runs smoothly. It is chaired by the Compagnie Plastic Omnium Corporate Secretary. Its other members include the Head of Human Resources, the Chief Financial Officer, the Head of Risk Management and Internal Audit, the Chief Executive Officers and the Chief Financial Officers of the Divisions. It is tasked with ensuring the quality and effectiveness of the system. It relays the decisions and recommendations of the Chairman and Chief Executive Officer, to whom it reports its findings. Its composition gives it the authority to coordinate the efforts of all actors involved in internal control and risk management in each division or corporate function.
Lastly, the Board of Directors reviews all of the major assumptions and strategies laid down for Compagnie Plastic Omnium by senior management. It reviews the broad outlines of the internal control and risk management system and acquires an understanding of the various procedures involved in the preparation and processing of overall and financial information.
The Finance Department is responsible for ensuring that the preparation of the Group's financial information is consistent. As such, it is tasked with:
The consistency of the Group's financial statements is guaranteed by the use of the same accounting standards and a single chart of accounts by all Group entities. The standards and chart of accounts take into account the specific characteristics of the subsidiaries' various businesses. They are laid down by the Accounting Standards and Principles Department, which is part of the Accounting and Tax Department and is the sole entity with authority to change them.
Consistency is further ensured by the coordinated management of information systems that contribute to the preparation of the financial information of each subsidiary: the use of a single software application guarantees that reporting and consolidation processes are standardized and applied consistently; moreover, based on a software package recommended by the Group, the various divisions have developed integrated management systems and rolled them out across the majority of their plants, thereby helping to ensure that the information used in the preparation of the financial statements is properly controlled.
Consolidated financial information is prepared for the following key processes:
These four processes apply to all subsidiaries controlled directly and indirectly by Compagnie Plastic Omnium.
Each subsidiary is responsible for producing its own accounts. Firsttier controls and analyses of subsidiaries' financial statements are performed locally. Second-tier controls are performed centrally in each division. Third-tier controls are performed by the Finance Department.
Reporting is done on a monthly basis. It is submitted to senior management one week after the close of the monthly accounts, and is reviewed by the Senior Management and analyzed by the Executive Committee. The reporting package comprises an income statement broken down by function, with an analysis of production costs, overheads, and research and development expenditure. It also includes a full cash flow statement, business forecasts for the subsequent three months and a set of environmental and safety indicators. The information is prepared at Group, division and subsidiary level. It provides comparisons between the various items – monthly actual, year-to-date actual, prior-year actual and current-year budget – together with an analysis of material differences.
The budget process begins in September each year, when the subsidiaries prepare their figures, which are consolidated at division level. Budgets are then submitted to senior management in November and validated in December, before being presented to Compagnie Plastic Omnium's Board of Directors. The budget package comprises an income statement, cash-flow statement and data concerning return on capital employed for each subsidiary and division for the year N+1.
Revised forecasts are regularly produced to allow remedial measures to be made with a view to ensuring that initial budget targets are met. They also allow senior management to report reliably on changes in the situation.
The budget is based on the rolling four-year business plan approved in July of each year by Senior Management, which includes income statement and balance-sheet projections prepared on the basis of the sales, industrial and financial strategies of the Group and the divisions.
Compagnie Plastic Omnium is responsible for managing the mediumterm financing requirements of all the subsidiaries controlled by the Group, while Plastic Omnium Finance covers short-term financing. Through Plastic Omnium Finance, the Group has set up a global cash-pooling and netting system for all Group subsidiaries in all countries where local rules allow this practice. In addition, intragroup receivables and payables are netted monthly. In this way, it manages funding streams and verifies cash positions on a daily basis.
In general, subsidiaries cannot negotiate external financing arrangements without the prior authorization of the Work planned in 2016 Group's Central Treasury.
Plastic Omnium Finance is also responsible for controlling all currency and interest rate hedging transactions.
Cash reports are sent to the senior management on a weekly basis. They provide an analysis of the cash position of each division, and of the Group as a whole, together with comparisons with the prior year and the budget for the current year.
No material incidents or significant changes occurred in 2015 that could have compromised the effectiveness of the internal control system described above.
As part of a process of continuous improvement of its internal control system, Compagnie Plastic Omnium plans to upgrade a number of procedures in order to enhance their pertinence and encourage operational staff to appropriate them. This approach, in which the Risk Management Department is playing an important role, covers internal control procedures, accounting and financial, and risk management procedures.
The Internal Audit Department will conduct 42 audits in 2016, compared with 37 in 2015.
To improve the internal control and risk management system, the Company will continue to apply the procedure for tracking progress on implementing recommendations issued by the Internal Audit Department.
In accordance with the provisions of Article L. 225-102-1 of the French Commercial Code and the AFEP-MEDEF Corporate Governance Code, the total compensation and benefits in kind paid to each corporate officer is presented in the tables below.
| Laurent Burelle Chairman and Chief Executive Officer |
Year 2014 | Year 2015 |
|---|---|---|
| Compensation due in respect of the year (see details below) | 4,234,744 | 4,584,864 |
| Value of stock options awarded during the year (see details below) | 0 | 651,000 |
| Total | 4,234,744 | 5,235,864 |
| Jean-Michel Szczerba Director, Co-Chief Executive Officer and Chief Operating Officer |
Year 2014 | Year 2015 |
| Compensation due in respect of the year (see details below) | 1,295,873 | 1,358,351 |
| Value of stock options awarded during the year (see details below) | 0 | 651,000 |
| Total | 1,295,873 | 2,009,315 |
| Paul Henry Lemarié Director and Chief Operating Officer |
Year 2014 | Year 2015 |
| Compensation due in respect of the year (see details below) | 2,120,342 | 2,310,619 |
| Value of stock options awarded during the year (see details below) | 0 | 0 |
| Laurent Burelle | Year 2014 | Year 2015 | ||
|---|---|---|---|---|
| Chairman and Chief Executive Officer | Totals due | Totals paid | Totals due | Totals paid |
| • fixed salary(1) | 86,573 | 86,573 | 87,471 | 87,471 |
| • bonus(1)(2) | 3,905,604 | 3,774,709 | 4,275,290 | 4,133,631 |
| • exceptional compensation | 0 | 0 | 0 | 0 |
| • directors' fees | 242,567 | 242,567 | 222,103 | 222,103 |
| • benefits in kind | Company car Company car |
|||
| Total | 4,234,744 | 4,103,849 | 4,584,864 | 4,443,205 |
Total 2,120,342 2,310,619
| Paul Henry Lemarié | Year 2014 | Year 2015 | ||
|---|---|---|---|---|
| Director and Chief Operating Officer | Totals due | Totals paid | Totals due | Totals paid |
| • fixed salary(1) | 86,573 | 86,573 | 87,471 | 87,471 |
| • bonus(1)(2) | 1,952,802 | 1,887,355 | 2,137,645 | 2,066,815 |
| • exceptional compensation | 0 | 0 | 0 | 0 |
| • directors' fees | 80,967 | 80,967 | 85,503 | 85,503 |
| • benefits in kind | Company car Company car |
|||
| Total | 2,120,342 | 2,054,895 | 2,310,619 | 2,239,789 |
(1) Paid by Burelle SA. This fixed compensation equals 120% of the highest coefficient in the collective bargaining agreement in the Plastics industry (coefficient of 940).
(2) Burelle SA pays gross compensation to executive corporate officers for their management services, which is then billed to Compagnie Plastic Omnium and its subsidiaries, calculated on the basis of the estimated time spent by each director on business relating to the Plastic Omnium Group. Directors' bonuses are paid by Burelle SA, and are determined on the basis of the Burelle Group's consolidated operating cash flow. This calculation is based on consolidated IFRS operating cash flow after tax and interest expense plus the share of operating cash flow of joint ventures (after tax and interest expense and net of dividends paid (see Note 5.1.14, page 120).
| Jean-Michel Szczerba | Year 2014 | Year 2015 | ||
|---|---|---|---|---|
| Director, Co-Chief Executive Officer and Chief Operating Officer |
Totals due | Totals paid | Totals due | Totals paid |
| • fixed salary | 830,929 | 830,929 | 872,464 | 872,464 |
| • bonus(1) | 363,829 | 363,829 | 382,020 | 382,020 |
| • exceptional compensation | 0 | 0 | 0 | 0 |
| • directors' fees | 101,115 | 101,115 | 103,831 | 103,831 |
| • benefits in kind | Company car | Company car | ||
| Total | 1,295,873 | 1,295,873 | 1,358,315 | 1,358,315 |
(1) Calculated on individual objectives and financial performance (operating margin and debt).
In accordance with Article L. 225-102-1 of the French Commercial Code, the compensation paid by Burelle SA to Compagnie Plastic Omnium's corporate officers in 2015 and the portion billed to Compagnie Plastic Omnium for management services are presented in the table below:
| Gross compensation paid by Burelle SA in 2015 |
O/w bonus | Amount billed to the Plastic Omnium Group in 2015 |
O/w bonus | |
|---|---|---|---|---|
| Laurent Burelle | 4,246,774 | 4,133,631 | 3,208,037 | 3,141,559 |
| Paul Henry Lemarié | 2,179,958 | 2,066,815 | 1,077,143 | 1,033,407 |
| Jean Burelle | 2,196,659 | 2,066,815 | 409,314 | 392,695 |
| Jean-Michel Szczerba | 0 | 0 | 0 | 0 |
| Members of the Board | Directors' fees paid in 2014 | Directors' fees paid in 2015 |
|---|---|---|
| Laurent Burelle | 29,715 | 34,431 |
| Paul Henry Lemarié | 24,115 | 28,831 |
| Jean Burelle | 24,115 | 28,831 |
| Jean-Michel Szczerba | 24,115 | 28,831 |
| Éliane Lemarié | 25,415 | 30,131 |
| Jean-Pierre Ergas | 26,715 | 21,623 |
| Jérôme Gallot | 31,715 | 34,831 |
| Vincent Labruyère | 28,015 | 32,731 |
| Alain Mérieux | 12,058 | 14,415 |
| Bernd Gottschalk | 24,115 | 30,131 |
| Anne-Marie Couderc | 28,315 | 33,031 |
| Anne Asensio | 26,715 | 34,331 |
| Amélie Oudéa-Castera | 25,415 | 30,131 |
| Total | 330,538 | 382,279 |
At its meeting of December 11, 2014, the Board of Directors allocated directors' fees for 2015 as follows:
| Corporate officer | Directors' fees paid in 2014 | Directors' fees paid in 2015 |
|---|---|---|
| Laurent Burelle | 242,567 | 222,103 |
| Paul Henry Lemarié | 80,967 | 85,503 |
| Jean Burelle | 118,492 | 102,203 |
| Jean-Michel Szczerba | 101,115 | 103,831 |
| Total | 543,141 | 513,640 |
| Name and position of the corporate officer |
Number of options awarded during the year |
Value of options using the method applied in the consolidated financial statements |
Exercise price |
Exercise period |
|---|---|---|---|---|
| Laurent Burelle Chairman and Chief Executive Officer |
150,000 | €651,000 | €24.72 | 2019-2022 |
| Jean-Michel Szczerba Director, Co-Chief Executive Officer and Chief Operating Officer |
150,000 | €651,000 | €24.72 | 2019-2022 |
| Paul Henry Lemarié Director and Chief Operating Officer |
0 | – | – | – |
In accordance with the AFEP-MEDEF Code recommendations:
(ii) the Company's operating margin compared with its main competitors;
• each director must retain 10% of the shares resulting from the exercise of options in registered form until the end of his or her term of office.
| Name and position of the corporate officer | Plan date | Number of options exercised during the year |
Exercise price |
|---|---|---|---|
| Laurent Burelle | 2008 plan | 54,000 | €2.94 |
| Chairman and Chief Executive Officer | 2010 plan | 200,000 | €2.84 |
| Jean-Michel Szczerba Director, Co-Chief Executive Officer and Chief Operating Officer |
– | 0 | – |
| Paul Henry Lemarié Director and Chief Operating Officer |
2010 plan | 270,000 | €2.84 |
| Name and position of the corporate officer |
Performance shares awarded during the year to each executive corporate officer by the issuer or any Group company |
Plan date |
Number of shares awarded during the year |
Value of shares using the method applied in the consolidated financial statements |
Vesting date |
End of vesting period |
|---|---|---|---|---|---|---|
| Laurent Burelle Chairman and Chief Executive Officer |
0 | – | – | – | – | – |
| Jean-Michel Szczerba Director, Co-Chief Executive Officer and Chief Operating Officer |
0 | – | – | – | – | – |
| Paul Henry Lemarié Director – and Chief Operating Officer |
0 | – | – | – | – | – |
| Name and position of the corporate officer |
Performance shares that vested during the year for executive corporate officers |
Plan date |
Number of shares that vested during the year |
Vesting conditions |
|---|---|---|---|---|
| Laurent Burelle Chairman and CEO |
0 | – | – | – |
| Jean-Michel Szczerba Director, Co-Chief Executive Officer and Chief Operating Officer |
0 | – | – | – |
| Paul Henry Lemarié Director and Chief Operating Officer |
0 | – | – | – |
In 2003, the Board of Directors of Compagnie Plastic Omnium decided to introduce a supplementary pension plan for the Executive Committee members of Compagnie Plastic Omnium. The plan guarantees these employees defined-benefit retirement compensation, provided they are still employed by the Group when they retire at age 65, under the following terms:
| Plastic Omnium Plan | Recommendations of the AFEP-MEDEF Code |
||
|---|---|---|---|
| Required length of service | 7 years | At least 2 years | |
| Actual length of service | The length of service of the three executive corporate officer is: Laurent Burelle: 41 years – Paul Henry Lemarié: 36 years – Jean-Michel Szczerba: 31 years |
||
| Average of the average total annual compensation | |||
| Reference compensation | for the five years prior to retirement | Several years | |
| Annual amount paid (% of the reference compensation) |
1% | 5% maximum | |
| Ceilings | 10 % of the reference compensation or 8 times the Social Security ceiling |
45% of compensation |
The Board of Directors of Burelle SA approved a similar plan for corporate officers in 2003. The portion of the annual cost in respect of this plan billed by Burelle SA to Compagnie Plastic Omnium and its controlled companies was €670,769 in 2015. The other pension plans for senior management are the same as those in place for the Group's managerial employees.
In compliance with AFEP-MEDEF Code recommendations, Laurent Burelle and Paul Henry Lemarié are no longer under an employment contract, Jean-Michel Szczerba's employment contract was suspended.
The Company has no commitment to pay the corporate officers any compensation for loss or change of office or due to a non-competition clause.
Year ended December 31, 2015
To the Shareholders,
As Statutory Auditors of Compagnie Plastic Omnium and in accordance with the Article L. 225-235 of French Commercial Code (Code de commerce), we hereby present our report on the Chairman of the Board of Directors report in compliance with the Article L. 225-37 of French Commercial Code regarding fiscal year ending December 31, 2015.
It is the Chairman's responsibility to establish and submit for the Board of Directors' approval a report on internal control and risk management procedures implemented by the Company and to provide the other information required by Article L. 225-37 of the French Commercial Code (Code de commerce) relating to matters such as corporate governance.
It is our responsibility to:
We conducted our work in accordance with professional standards applicable in France.
The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman's report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting and financial information. These procedures consist mainly in:
On the basis of our work, we have no matters to report on the information relating to the Company's internal control and risk management procedures relating to the preparation and processing of the accounting and financial information contained in the report prepared by the Chairman of the Board of Directors in accordance with article L. 225-37 of the French Commercial Code (Code de commerce).
We confirm that the report prepared by the Chairman of the Board of Directors also contains the other information required by Article L. 225-37 of the French Commercial Code (Code de commerce).
Paris-la Défense, February 24, 2016
The Statutory Auditors
MAZARS ERNST & YOUNG et Autres Jean-Luc Barlet Gilles Rabier
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