The Board of Directors’ report on corporate governance has been prepared in accordance with the provisions of Articles L.225-37-4 and L.22-10-8 to L.22-10-11 of the French Commercial Code (Code de commerce).
6.1 Corporate governance
Application of the AFEP-MEDEF Code
Edenred’s system of corporate governance is based on the AFEP-MEDEF Corporate Governance Code for listed companies (the “AFEP-MEDEF Code”), which was updated in January 2020. The said Code is available on the website of the High Committee for Corporate Governance (https://hcge.fr), from the issuing organizations, on the Company’s website (https://www.edenred.com/en/discover-group/governance) or at the Company’s registered office.
The Company’s practices comply with the recommendations contained in the AFEP-MEDEF Code, with the exception of part of Article 18.1, which recommends that an employee-representative director be a member of the Compensation Committee.
It should be noted that the meetings of the Compensation, Appointments and CSR Committee are the subject of a detailed report systematically given to the directors before each Board meeting. The employee-representative directors are therefore informed of the issues raised in a precise manner and have the possibility of expressing their views on the subjects discussed during the Board meeting.
In addition, the Board of Directors and the Compensation, Appointments and CSR Committee discussed the possibility of appointing the employee-representative directors to the Board Committees:
- in view of Mr. Jean-Bernard Hamel’s expertise in finance and excellent knowledge of the Group’s activities, based on the recommendation of the Compensation, Appointments and CSR Committee, the Board of Directors considered that his expertise would be a valuable asset to the Commitments Committee and therefore decided to appoint him to the Commitments Committee at its meeting of May 10, 2021;
- in view of Ms. Graziella Gavezotti’s expertise in audit and finance (directorship on the Board and Audit Committee of a CAC 40 company), based on the recommendation of the Compensation, Appointments and CSR Committee, the Board of Directors considered that her qualifications made her a suitable candidate to serve on the Audit and Risks Committee and therefore decided to appoint her to the Audit and Risks Committee at its meeting of February 21, 2022.
Combination of the roles of Chairman and Chief Executive Officer
The Company was incorporated on December 14, 2006 for a 99-year term as a French simplified limited liability company (société par actions simplifiée – SAS). It was converted into a French limited liability company (société anonyme – SA) with a Board of Directors on April 9, 2010, and then into a European company (société européenne, societas europaea – SE) with a Board of Directors by the Combined General Meeting of May 11, 2021.
As provided for in the applicable regulations, on June 29, 2010, the Board of Directors decided to combine the roles of Chairman of the Board of Directors and Chief Executive Officer and confirmed this decision on September 10, 2015 when Mr. Bertrand Dumazy was appointed Chairman and Chief Executive Officer and when his term of office as director was renewed on May 3, 2018. Subject to the renewal of Mr. Bertrand Dumazy’s term of office as director by the General Meeting of May 11, 2022, based on the recommendation of the Compensation, Appointments and CSR Committee, the Board of Directors decided to reappoint Mr. Bertrand Dumazy as Chairman of the Board of Directors and Chief Executive Officer for the duration of his new term of office as director, i.e., until the close of the General Meeting to be held in 2026 to decide on the financial statements for the financial year ending December 31, 2025. The appropriateness of the governance structure is regularly reviewed by the Board of Directors, and at least each time the Chairman and Chief Executive Officer’s term of office is renewed.
The Compensation, Appointments and CSR Committee and the Board of Directors believe that this governance structure is the most appropriate for the Group, which is faced with a profound and rapid transformation of its businesses and markets. The Board of Directors, after having discussed this issue, in particular during its strategic session held on October 18 and 19, 2021, identified numerous challenges, such as:
- the profound technological transformation impacting the earmarked payment solutions and Employee Benefits sector, more specifically the “platforming” of offers, built around new disruptive technologies, such as blockchain, or innovative services, such as Banking as a Service;
- the emergence and rapid adoption of electric vehicles in Europe, and ultimately in other countries, requiring tailored offers, a transformation of the infrastructures in place and the nature of market players;
- the arrival of new unlisted entrants in all the Group’s markets, with major financing and without short-term profitability constraints; and