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G O V E R N A N C E A N D O R G A N I Z A T I O N

THE RIGHTS OF LVMH SHAREHOLDERS ARE PROTECTED BY LAW AND THE PRINCIPLES OF CORPORATE GOVERNANCE

WHICH GOVERN THE WAY THE GROUP OPERATES.

LVMH s Board of Directors is the strategic body of the Company that is primarily responsible for enhancing the Company s value and protecting its corporate interests, taking into consideration the social and environmental issues facing its business and, where applicable, the Company s mission statement, as laid down pursuant to Article 1835 of the French Civil Code. It also endeavors to promote the Company s long-term value creation, in par- ticular by taking into account the social and environmen- tal issues facing its business. Its principle assignments are to approve the Company s and the Group s major strate- gies and supervise their implementation; to verify the fair and accurate presentation of information about the Company and the Group; to protect its corporate assets; and to ensure that core business risks are fully accounted for in the management of the Company. It also ensures that procedures to prevent corruption and influence- peddling are implemented, and that a non-discrimi- nation and diversity policy is in place, notably with regard to gender equality within the governing bodies. Lastly, it acts as guarantor with respect to the rights of each of its shareholders and ensures that shareholders fulfill all of their duties. In fiscal year 2019, the Board of Directors approved the annual and interim parent company and consolidated financial statements, monitored quarterly business activ- ity, and gave its opinion on the Group s key strategic direction and decisions, its budget, compensation of company officers, the implementation of a bonus perfor- mance share allocation plan, and the implementation of the share buyback authorization. Lastly, it approved the plan to acquire Tiffany & Co. There are three committees within the LVMH Board of Directors: In 2019, the Performance Audit Committee reviewed the annual and interim parent company and consolidated financial statements in conjunction with a detailed analy-

sis of changes in the Group s activities and scope. The Committee worked primarily on internal audit; the Group s internal audit policy and how the financial markets view the Group; and the transition to the new accounting standard, IFRS 16, from January 1, 2019. In 2019, the Nominations & Compensation Committee issued proposals on the fixed and variable components of compensation as well as benefits in kind paid to the Chairman and Chief Executive Officer and the Group Managing Director, on the performance criteria associ- ated with their variable compensation and the respective weighting of each one, the granting of performance shares to those two individuals and the requirement to retain possession of a portion of any vested shares. It also provided opinions on the compensation, performance shares and benefits in kind granted to certain Directors by the Company or its subsidiaries. It reviewed the state- ment of compensation paid to Directors and Advisory Board members during fiscal year 2019, as well as the Board of Directors draft report on the compensation pol- icy submitted for shareholder approval. It expressed an opinion in favor of (i) the reappointment of Directors whose terms of office were ending in 2019, (ii) the appointment of a new Director and a new Advisory Board member, and (iii) the reappointments of Bernard Arnault as Chairman of the Board of Directors and Chief Executive Officer, and of Antonio Belloni as Group Man- aging Director. It also issued a favorable opinion on the combined role of Chairman and Chief Executive Officer. In 2019, the Ethics & Sustainable Development Commit- tee gave a progress update on the Group s compliance program, notably in connection with the Sapin II Act and the law on the duty of care for parent companies.

More information can be found in the 2019 Universal Registration Document.

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