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Governance

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By-laws and Business Conduct Policies

Pursuant to the Law of July 3, 2008, the Board of Directors, at its meeting on December 18, 2008, studied the provisions of the AFEP- MEDEF Code and decided that the Company shall refer to this Code of governance.

Company Governance

By-laws as of June 5, 2014
Business Conduct Policies

Board of Directors
> Composition of the Board of Directors

The administration of the Company is entrusted to Board of Directors whose members are appointed by the Shareholders’ Meeting.

Members of the Board of Directors as of February 28, 2014

As of February 28, 2014, the following persons are the 13 members of the Board of Directors:

Name

Age

Principal position (a)

Starting date of Director's term

Expiration date of Director's term (b)

Franck RIBOUD

58

Chairman and Chief Executive Officer of Danone

1992

2016

Emmanuel FABER

50

Vice-Chairman of the Board of Directors
and Deputy General Manager of Danone

2002

2016

Bernard HOURS

57

Vice-Chairman of the Board of Directors
and Deputy General Manager of Danone

2005

2017 (c)

Bruno BONNELL (d) (e)

55

Chairman of I-Volution

2002

2017 (c)

Richard GOBLET D'ALVIELLA (d)

65

Executive Chairman of Sofina SA

2003

2015

Jacques-Antoine GRANJON (d)

51

Chairman and Chief Executive Officer
of vente-privee.com

2012

2015

Jean LAURENT (d)

69

Chairman of the Board of Directors
of Foncière des Régions

2005

2015

Benoît POTIER (d)

56

Chairman and Chief Executive Officer
of L'Air Liquide SA

2003

2015

Isabelle SEILLIER

54

Head of Financial Institutions EMEA of J.P Morgan

2011

2017 (c)

Mouna SEPEHRI (d)

50

Member of the Executive Committee,
Executive Vice-President of Renault SAS

2012

2015

Jean-Michel SEVERINO (d)

56

Head of I&P SARL

2011

2017 (c)

Virginia A. STALLINGS (d)

63

Professor of Pediatrics at the Children's Hospital
of Philadelphia

2012

2015

Jacques VINCENT

67

Founder and Manager of the
Un Métier Vocation Foundation

1997

2014 (f)

(a)   Each Director's term of office and duties are detailed hereafter (see section 6.2 Positions and responsibilities of the Directors and nominees to the Board of Directors).
(b)   Date of the Shareholders' Meeting.
(c)  Provided his term of office is renewed by the Shareholders' Meeting of April 29, 2014.
(d)  Director deemed independent by the Board of Directors meeting held on February 19, 2014, upon recommendation of the Nomination and Compensation Committee (see section hereafter related to Review of Directors' independence).
(e)  As of February 28, 2014, Mr. Bruno BONNELL is deemed an independent Director. Regarding his independence, in case his term of office is renewed at the end of the Shareholders' Meeting of April 29, 2014, see section hereafter Review of Directors' independence.
(f)  The Board of Directors, upon recommendation of the Nomination and Compensation Committee, acknowledged Mr. Jacques VINCENT's wish not to renew his term of office as Director.

As of February 28, 2014, the Board of Directors includes a Lead Independent Director, Mr. Jean LAURENT, who was appointed by the Board of Directors on February 18, 2013 upon recommendation of the Nomination and Compensation Committee (see section Board of Directors' rules of procedure hereafter for a description of the Lead Independent Director's powers).

In addition, Mr. Michel DAVID WEILL was appointed Honorary Vice Chairman of the Board of Directors at the end of the Shareholders' Meeting of April 28, 2011; in such capacity he has an advisory role.

On July 26, 2013, the Board of Directors acknowledged the resignation of Mr. Yoshihiro KAWABATA from his position as a member of the Board of Directors, and therefore from his functions as member of the Nomination and Compensation Committee.

Four members of the Danone Works Council, appointed by this Council (two from the employees category, one from the supervisors and technicians category and one from the executives category) attend all Board meetings in an advisory capacity.

Once the two Directors representing employees have been appointed in accordance with the new provisions of the Act n°2013-504 of June 14, 2013 concerning job security, a single member of the Works Council will attend Board meetings in an advisory capacity.

As of February 28, 2014, the Board of Directors of Danone presented the following characteristics:

Rate of independence

62%

Percentage of women

23%

Average age of Directors

57.8 years

Average duration of Directors' terms of office

8.8 years

Percentage of Directors with non-French nationality

23%

Change in the composition of the Board proposed to the Shareholders' Meeting of April 29, 2014

The Shareholders' Meeting of April 29, 2014 is asked to renew the terms of office as Directors of Messrs. Bruno BONNELL, Bernard HOURS, Jean-Michel SEVERINO and Mrs. Isabelle SEILLIER and to appoint Mrs. Gaëlle OLIVIER and Mr. Lionel ZINSOU-DERLIN as Directors (see section 8.3 Comments on the resolutions of the Shareholders' Meeting hereafter).

The Board of Directors of February 19, 2014, upon the recommendation of the Nomination and Compensation Committee, also acknowledged the wish of Mr. Jacques VINCENT, a Director for the past 17 years and former Deputy General Manager of Danone, not to seek renewal of his term of office.

In addition, in accordance with the new provisions of the law of June 14, 2013 relating to security of employment, the Shareholders' Meeting of April 29, 2014 is asked to amend Danone's by-laws to allow the appointment of two Directors representing employees (see section 8.3 Comments on the resolutions of the Shareholders' Meeting).

Provided that the aforementioned term of office renewals and the appointments proposed are approved by the Shareholders' Meeting of April 29, 2014, the composition of the Board will present the following characteristics:

 

Composition subsequent
to the 2011 Shareholders'
Meeting

Composition subsequent
to the 2013 Shareholders'
Meeting

Composition
prior to the 2014 Shareholders' Meeting(a)

Composition subsequent
to the 2014 Shareholders'
Meeting

Rate of independence

57%

57%

62%

71%

Percentage of women

14%

21%

23%

29%

Average age of Directors

58.6 years

57.3 years

57.8 years

56.1 years

Average duration of Directors' terms of office

8.3 years

7.6 years

8.8 years

7.4 years

Percentage of Directors with non-French nationality

29%

29%

23%

29%

(a)   Composition as of February 28, 2014, on this date the Board of Directors comprised 13 Directors due to the resignation of Mr. Yoshihiro KAWAB<zzATA on July 26, 2013.

In accordance with the recommendations of the AFEP-MEDEF Code, the Directors representing employees will not be included in the calculation of the rate of independence for the Board of Directors. In addition, in accordance with applicable laws, these same Directors will not be taken into consideration when calculating the percentage of women on the Board.

Accordingly, following the Shareholders' Meeting of April 29, 2014, subject to a favorable vote by the Meeting:

- the rate of independence would still be higher than that recommended by the AFEP-MEDEF Code (which is 50% for widely-held companies without controlling shareholders, such as Danone), and all the members of the Audit Committee and Nomination and Compensation Committee would be independent, which is also higher than that recommended by the AFEP-MEDEF Code (under which these committees should comprise at least two-thirds and a majority of independent Directors, respectively);

- the percentage of women would also comply with applicable regulations (which require the percentage of women to be at least 20% by the Shareholders' Meeting to be held in 2014); and

- the average age of Directors and the average duration of their terms of office would be falling. Faced with this decrease in the average seniority of its members, in order to preserve its diversity, the Board of Directors believes it is important to retain among its members several non-executive Directors who have extensive knowledge of the Group (in particular, Mr. Bruno BONNELL, who has been a Director since 2002 and whose term of office is proposed for renewal to the Shareholders' Meeting).

It should be noted that, for several years, the Board has committed to its shareholders to continue to make proposals to the Shareholders' Meeting to improve its corporate governance, particularly in terms of its independence, the percentage of women on the Board and the diversity of its expertise and composition.

Directors’ terms of office

Duration and renewal of terms of office

Pursuant to the by-laws and in accordance with the AFEP-MEDEF Code in which Directors' terms of office may not exceed four years, a Director is appointed for a three-year term of office that may be renewed. The term of office of a Director who is an individual expires automatically at the end of the Shareholders' Meeting convened to vote on the past fiscal year's financial statements or held in the year during which such Director has turned or will turn 70. Furthermore, upon a decision of the Shareholders' Meeting, this age limit does not apply to one or more Directors who may remain in office or who may be reappointed one or more times, so long as the number of Directors concerned by this decision does not exceed one-fourth of the number of Directors in office.

In order to support the smooth renewal of the Board, all Directors' terms of office are staggered. The regular renewal of such terms of office by shareholders is thus facilitated (i) due to the fact that the by-laws limit the terms of office to three years and (ii) by spreading the expiration dates of the various terms of office and thereby enabling the Shareholders' Meeting to vote on the terms of office of several Directors each year.

Based on the current composition of the Board, the terms of office of five Directors will expire at the end of the Shareholders' Meeting convened to vote on the financial statements for the fiscal year 2013, the terms of office of six Directors will expire at the end of the Shareholders' Meeting convened to vote on the financial statements for the fiscal year 2014 and the terms of office of the remaining two Directors will expire at the end of the Shareholders' Meeting convened to vote on the financial statements for the fiscal year 2015.

Holding of DANONE shares by the Directors

Although French law does not require minimum shareholding of the directors of French limited companies (sociétés anonymes), Danone’s by-laws nevertheless, in accordance with the AFEP-MEDEF Code, require each Director (with the exception, as laid down by law, of Directors representing employees, who should be appointed by the end of 2014, see sections 8.2 Draft resolutions presented at the Shareholders’ Meeting and 8.3 Comments on the resolutions of the Shareholders’ Meeting) to hold a minimum of 4,000 shares in registered form. By way of example and based on the closing price of the Company’s share on February 28, 2014 (i.e. €51.18 per share), 4,000 DANONE shares represent an amount of €204,720.

> Board of Directors´ rules of procedure

Adoption by the Board of Directors on April 25, 2002

The Board of Directors' rules of procedure, which set out the Directors' rights and obligations and the method of operation of the Board of Directors, were adopted by the Board of Directors on April 25, 2002.

In accordance with the recommendations of the AFEP-MEDEF Code, the Board of Directors' rules of procedure are described in detail in this Registration Document.

Main changes

The Board of Directors' rules of procedure are amended on a regular basis, notably following each of the self-assessments, the most recent being achieved in 2008, 2010 and 2012 (see sections Self-assessment of the Board of Directors and Directors' Code of ethics) and in the framework of the Board's annual update on its operations.

The rules of procedure have therefore been amended as follows:

  • amendments in 2008 on the prohibition of Directors from using any hedging instruments in connection with the Company's shares;
  • amendments in 2010 on the addition of new Directors;
  • in 2011, the procedure for declaring and managing conflicts of interest was strengthened; and
  • in December 2013, in order to comply with the new recommendations of the AFEP-MEDEF Code, revised in June 2013, the Board of Directors' rules of procedure were amended as follows:
    • in the future, the prior approval of the Board of Directors must be obtained before an executive director and officer may accept any new appointment in a listed French or foreign company (in the past a mere information was sufficient),
    • any Director can meet the company's main managers in the absence of executive directors and officers,
    • the independent Directors meet at least once a year, on the initiative of the Lead Independent Director, who may invite the Company's other external Directors (i.e. the non-executive and non-independent Directors) to attend the meeting,
    • specific provisions provide for appropriate training for Directors representing employees, and
    • Directors are expressly prohibited from engaging in any transactions on securities of the companies for which they, due to their corporate office in Danone, have insider information.

Current Rules of Procedure

The main provisions of the Board of Directors' rules of procedure are summarized hereafter.

Responsibilities of the Board of Directors

The Board of Directors is a collegial body in which all Directors have the same powers and duties, and in which decisions are made collectively. It is responsible towards the shareholders; it meets at least five times a year and establishes operating rules for itself and its various Committees.

The Board of Directors sets the Company's business policies and ensures that they are implemented. It votes on all decisions concerning the Company's major strategic, economic, social, financial and technological policies. Moreover, it grants prior approval for transactions defined by the rules of procedure which limit the powers of the Chief Executive Officer (see section hereafter Powers of the Chief Executive Officer).

At each Board meeting, the Chairman reports on the main transactions concluded by the Group since the previous meeting and on significant projects in progress that may be concluded before the following meeting. Each year, the Board reviews the key points of the Group Management Report, as well as the resolutions to be submitted to the Shareholders' Meeting. Furthermore, at least once every six months, General Management informs the Board of Directors of the Company's financial position, cash position and commitments.

Between Board meetings, the Directors receive all necessary information concerning events or transactions of significance to the Group. More generally, the Directors may at any time request from the Chairman all information and documents they deem necessary to perform their duties.

Board of Directors' meetings

In accordance with statutory and regulatory provisions and the Board of Directors' rules of procedure, Directors who attend Board meetings by videoconference or other means of telecommunication are deemed to be present for the purposes of calculating the quorum and majority. However, this method of attendance is not permissible when the Board decides on whether to approve Danone's statutory and consolidated financial statements or when it prepares the management report, including the Group Management Report.

The executive directors and officers attend Board of Directors' meetings. In principle, the Company's external Directors meet only when the internal Directors are present to ensure that all Board members have access to the same amount of information and to reinforce the collegial nature of the Board.

Since the AFEP-MEDEF Code recommends that the non-executive Directors meet annually without the executive or internal Directors, from December 2013 the Board of Directors' rules of procedure provide that the independent Directors meet at least once a year, on the initiative of the Lead Independent Director, who may invite the Company's other external Directors (i.e. the non-executive and non-independent Directors) to attend the meeting. On February 28, 2014, this meeting has not yet been held as the Group's current position has not justified its organization in this period.

When the Board sets the compensation of executive directors and officers, they are present at the time of the Board's deliberations but, in accordance with the law, they do not take part in either the discussions or the vote, in accordance with the law. However, no executive director and officer attends any meeting of the Nomination and Compensation Committee during which his/her own compensation is discussed.

Committees of the Board of Directors

The Board of Directors may create one or more specialized Committees and determine their composition and powers. The Committees perform their duties under the Board of Directors' responsibility.

The Committees are comprised solely of Directors: their members are appointed by the Board of Directors upon recommendation of the Nomination and Compensation Committee. They are appointed in their individual capacity and may not, in turn, appoint a proxy to represent them. The Committee Chairmen are appointed by the Board of Directors upon recommendation of the Nomination and Compensation Committee. However, these Committees may not interfere in the Company's management or reduce or limit the powers of the Chairman and Chief Executive Officer, the Deputy General Manager or the Board of Directors. On matters within its scope of powers, each Committee submits proposals, recommendations and opinions, and reports to the Board of Directors on its activities. The final decision is taken by the Board of Directors, in accordance with the provisions of the French commercial code.

Each of these Committees may undertake studies or obtain advice from independent experts and is allocated a special budget by the Company for such use.

Compensation of Directors

Directors receive attendance fees; however the members of the Executive Committee and/or the Company's executive directors and officers and honorary directors do not receive any attendance fees. The Shareholders' Meeting approves the total maximum amount of attendance fees to be divided among the Directors.

In accordance with the AFEP-MEDEF Code, the allocation of attendance fees takes the effective participation of Directors at Board and Committee meetings into account by including a majority variable element (see section Directors' attendance fees hereafter).

Moreover, a reimbursement oversight policy for expenses incurred by Board members when carrying out their duties was adopted by the Board at its meeting of February 18, 2013.

Directors' Code of ethics

The Board's rules of procedure include a Directors' Code of ethics.

Defense of the corporate interest

Each Director is appointed by all the shareholders and, in carrying out his/her duties, should act in the best interests of Danone, independently from all other interests.

Awareness of Directors' rights and obligations

At the time he/she takes office, each Director must be aware of the general and specific obligations incumbent on his/her position.

Independence of Board members

Each year, after reviewing the opinion of the Nomination and Compensation Committee, the Board of Directors individually considers the situation of each Director in light of the AFEP-MEDEF Code independence rules. This Code considers a director to be independent if he/she: “has no relationship of any type with the company, its group or its management that could compromise his/her ability to freely exercise his/her judgment”, and sets forth the following independence criteria:

  • he/she is not, and during the previous five years has not been, an employee or executive director and officer of the company, or an employee or director of its parent company or of a company within its consolidation scope;
  • he/she is not an executive director and officer of a company in which the company directly or indirectly holds a directorship or in which an employee appointed for such purpose or an executive director and officer of the company (currently or who has held such position within the previous five years) holds a directorship;
  • he/she is not a customer, supplier, investment bank or commercial bank:
    • that is significant to the company or its group,
    • or for which the company or its group represents a significant part of its business;
  • he/she does not have close family ties with an executive director and officer;
  • he/she has not been one of the company's statutory auditors during the previous five years;
  • he/she has not been a director of the company for more than 12 years (see, on the application of this criterion, section Application of the AFEP-MEDEF Corporate Governance Code for listed companies hereafter).
Duty to report conflicts of interest

Each Director must at all times ensure that his/her personal situation does not create any conflict of interests with the Group. Any Director who has a conflict of interest must report it to the Board so that the latter may make a decision thereon, and must refrain from taking part in any deliberations and vote on the relevant matter (see section Duty to report conflicts of interest hereafter).

Each Director must provide a sworn statement describing whether or not he/she has any conflicts of interest, including potential conflicts of interest: (i) at the time he/she takes office, (ii) annually, in response to the Company's request when preparing the Registration Document, (iii) at any time, if requested by the Chairman of the Board of Directors, and (iv) within 10 business days of the occurrence of any event that causes the Director's previously filed statement to become inaccurate, in whole or in part.

Directors' confidentiality obligation

Directors are bound by a general confidentiality obligation regarding the decisions of the Board and of the Committees, as well as with respect to confidential information of which they become aware in the performance of their duties as a Director.

The Directors' general confidentiality obligation was extended to all information and documents of which they may become aware in the course of their duties as a Director.

Attendance requirement
With respect to their attendance obligations, Directors must limit the number of offices and Board committee chairs they hold in other companies to ensure sufficient availability. Should an executive director and officer wish to accept a new appointment within a French or foreign listed company, he/she must first inform the Chairman of the Board of Directors and the Chairman of the Nomination and Compensation Committee and, in accordance with the provisions of the AFEP-MEDEF Code, obtain the prior approval of the Board of Directors.
Transactions involving the Company's securities by members of the Board of Directors

The relevant securities include the Company's shares and all financial instruments linked to the shares.

In general, members of the Board of Directors are bound by a duty to exercise due care and diligence, as well as an obligation to take particular care with respect to any personal transactions involving the Company's securities.

In particular, Directors may not engage in speculative or short-term transactions involving the Company's securities.

Furthermore, they may not engage in transactions involving the Company's securities in the following cases:

  • if they have information that, when published, is likely to affect the price of the securities; and
  • during periods explicitly indicated by the Company, in particular, during the month preceding announcements of the Company's annual and semi-annual results, or during the two-week period prior to publication of the Company's quarterly sales figures.

In addition, members of the Board of Directors must not use any instruments to hedge DANONE shares or any financial instruments linked to DANONE shares (in particular, stock-options or rights to allotments of DANONE shares subject to performance conditions). This rule also applies to all transactions engaged in by persons who are related to the Directors (within the meaning of the applicable regulations).

Any Director who is unsure about a transaction involving the Company's securities (or other financial instruments) that he/she intends to enter into or the precise nature of the information he/she is required to disclose, must inform the Chairman of the Board of Directors or the Lead Independent Director accordingly.

Finally, pursuant to the new recommendations of the AFEP-MEDEF Code, the Board of Directors' rules of procedure also prohibit Directors from engaging in transactions in securities (and related financial instruments) of the companies for which he/she, as a result of his/her duties in Danone, has insider information.

Assessment of the Board of Directors

The Board's composition, organization and operation are assessed every two years. This assessment may be a self-assessment, an assessment by the Nomination and Compensation Committee or an assessment by a third party organization.

Under this assessment, the recommendation of the AFEP-MEDEF Code concerning measuring the actual contribution of each Director to the Board's work is not applied, notably due to the practical difficulties involved in implementing this type of recommendation and its possible consequences for the Board's team spirit and collegiality.

Nonetheless, each year, each Director completes a very detailed questionnaire on the operation of the Board, allowing each member to give his/her opinion on potential issues. Moreover, the Board of Directors reviews the completed questionnaires, providing it with the opportunity to fully assess the contributions and involvement of all Directors in the work of the Board and its Committees. Lastly, the Board's rules of procedure expressly provide that this assessment should enable not only “the quality of the collective work of the Board of Directors to be assessed” but also “the availability and commitment of Directors”.

Training of Directors

The rules of procedure of the Board of Directors provide that each Director is entitled to the training necessary for him/her to carry out his/her term of office, either upon appointment or throughout his/her term. These trainings, whether internal or external, enable the Director to understand in particular the Group's business, risks and organization, or to improve certain specific skills. It is organized and paid for by the Company.

Regarding the Directors representing employees who are soon to be appointed in accordance with the new legal provisions, the rules of procedure of the Board of Directors were amended in December 2013, in accordance with the new provisions of the AFEP-MEDEF Code, in order to ensure that these Directors are given appropriate training as soon as they take up their positions.

Furthermore, when taking up their positions, all new Directors receive all the documentation and information required to ensure thorough knowledge and understanding of the Group and its accounting, financial and operating characteristics (its history, organization, legal structure, financial results, press summaries, analysts' reports, press releases issued by the Company, etc.) and the performance of their duties as members of the Board (rules of procedure of the Board of Directors and its Committees and the AFEP-MEDEF Code, etc.). The Secretary of the Board also provides them with the rules pertaining to holding, communicating and using insider information, and to transactions on DANONE shares.

Lastly, following the self-assessment carried out by the Board of Directors in 2012 (see section hereafter Self-assessment of the Board of Directors), (i) every new Director is offered an improved integration process comprising individual meetings with several Directors and individual interviews with members of the General Management and the Executive Committee, and (ii) all Directors are given the opportunity to attend presentations by senior managers in charge of the Group's main functions as well as regular on-site visits.

Information of Directors

Concerning continuous information for Directors, the rules of procedure provide that:

  • prior to each Board meeting, each Director should receive a file on the agenda items requiring specific analysis and advance reflection, so that he/she can consider his/her position on the matters to be discussed at the meeting in an informed and enlightened manner; the Lead Independent Director also ensures that the Directors are provided with a high level of information in advance of Board meetings;
  • at each Board meeting, the Chairman advises Directors of the main facts and significant events affecting the Group since the date of the previous Board meeting;
  • between Board meetings, the Directors receive all necessary information concerning events or transactions of significance to the Group. More generally, the Directors may at any time request from the Chairman all information and documents they deem necessary to perform their duties. In particular, they receive additional press releases to those reviewed during Board meetings; and
  • General Management specifically informs the Board of Directors of the Company's financial position, cash position and commitments at least once every six months.

Lead Independent Director

Presentation of the Lead Independent Director

Discussions with the Company's shareholders have enabled the Board of Directors to note that certain shareholders consider that the aggregation of the offices of Chairman of the Board of Directors and Chief Executive Officer could cause risks as regards corporate governance. It therefore appeared opportune to the Board to make obligatory the appointment of a Lead Independent Director when the functions of Chairman of the Board of Directors and Chief Executive Officer are combined in order to provide additional assurance as to the smooth operation of the Board and the balance of powers within General Management and the Board. Consequently, at the Board meeting on February 18, 2013, the Board's rules of procedure were amended to create the position of a Lead Independent Director.

The Lead Independent Director is appointed by the Board of Directors from among the independent Directors, based on a proposal from the Nomination and Compensation Committee. He/she remains in office throughout the duration of his/her term of office. Each time the Lead Independent Director's term of office expires, a review will be carried out of the operation of said role and its holder's powers so that, if necessary, they can be adapted.

Excerpts from the Board's rules of procedure relating to the Lead Independent Director

Duties of the Lead Independent Director

The Lead Independent Director's primary function is to ensure the smooth operation of the Board of Directors and its Committees. In that context, he/she is in charge of the following matters:

Board of Directors assessment

The Lead Independent Director participates in the Board of Directors assessment process.

Management of conflicts of interest

The Lead Independent Director prevents conflicts of interest from occurring, notably by taking preventive measures to raise awareness. He/she brings any conflicts of interest involving executive directors and officers and other Board members that he/she has identified to the attention of the Board of Directors.

As part of the duty to report conflicts of interest as specified in Article 9.4 of these rules of procedure (see section above Directors' Code of ethics), any Director having a conflict of interest, even potential, notifies the Lead Independent Director.

Compliance with the rules of procedure

The Lead Independent Director ensures that the rules of procedure of the Board of Directors are complied with. As part of the consultation procedure with respect to market ethics (i.e. the consultation procedure concerning transactions by the Directors involving DANONE shares, see section above Transactions involving the Company's securities by members of the Board of Directors), the Lead Independent Director may be consulted by the Directors in the same capacity as the Chairman and Chief Executive Officer.

Relations with shareholders

The Lead Independent Director assists the Chairman and Chief Executive Officer, upon his/her request, to answer questions from shareholders, and makes himself/herself available to meet with them and receive comments and suggestions from them, at the request of and with the approval of the Chairman and Chief Executive Officer.

Activity report

The Lead Independent Director reports on the execution of his/her duties once a year to the Board of Directors.

During the Shareholders' General Meetings, he/she may be requested by the Chairman and Chief Executive Officer to report on his/her actions.

Prerogatives of the Lead Independent Director

As part of his/her duties, the Lead Independent Director exercises the following prerogatives:

Convening of the Board of Directors/Agenda/Informing Directors

The Lead Independent Director may request the Chairman and Chief Executive Officer to convene the Board of Directors for a given agenda.

He/she may propose to the Chairman and Chief Executive Officer additional agenda items.
He/she ensures that the Directors are capable of performing their duties under the best possible conditions, and notably that they are properly informed prior to the Board of Directors meetings.

Independent Directors

The rules of procedure of the Danone Board of Directors specify, since December 2013, that Danone's independent Directors should hold at least one meeting per year, on the initiative of the Lead Independent Director, who may invite the Company's other external Directors (i.e. the non-executive and non-independent Directors) to attend this meeting. On February 28, this meeting has not yet been held as the Group's current situation has not justified the organization of such a meeting in this period.

The Lead Independent Director ensures the link between independent Directors and the Chairman and Chief Executive Officer, the other Board members and the General Management.

Committees of the Board of Directors

The Lead Independent Director may be appointed by the Board of Directors to serve as Chairman or member of one or more Board of Directors Committees. Even if not appointed, the Lead Independent Director may attend the meetings and has access to the work of the other Committees. In particular, the Lead Independent Director is involved in the work of the Nomination and Compensation Committee concerning the annual performance assessment and recommendations regarding the compensation of executive directors and officers.

Meetings with managers

The Company keeps the Lead Independent Director regularly informed of its activities, including through the organization of regular meetings with operational or functional managers, on his/her request.

Means

The Lead Independent Director has access to all documents and information that he/she deems necessary to fulfill his/her duties.

Appointment of Mr. Jean LAURENT as Lead Independent Director

Mr. Jean LAURENT was appointed as Lead Independent Director by the Board of Directors of February 18, 2013, in view of his independence, experience and knowledge of the Group. The Board of Directors considered that Mr. Jean LAURENT met all the requirements for independence necessary to serve in this position, pursuant to the independence criteria set out in the AFEP-MEDEF Code, and despite Eurazeo holding, as of December 31 2012, 2.6% of Danone's capital (Mr. Jean LAURENT is Vice-Chairman of Eurazeo's Supervisory Board and consequently not an executive director and officer of that company). In 2013, Eurazeo transferred practically all the DANONE shares it held to bearers of Eurazeo bonds convertible into existing DANONE shares (as of December 31, 2013, Eurazeo holds a residual shareholding representing approximately 0.01% of Danone's share capital). The Board of Directors also took into account the extensive business experience of Mr. Jean LAURENT as the former Chief Executive Officer of a major banking group as well as his thorough knowledge of the Board and the Group. Indeed, he has served the Group as Director since 2005, Chairman of the Social Responsibility Committee since 2007, and Chairman of the Nomination and Compensation Committee since 2011.

For information, Mr. Jean LAURENT's attendance at Board and Committee meetings was 100% for the 2013 fiscal year.

As of December 31, 2013, Mr. Jean LAURENT held three other offices in listed companies, including two in the Foncière des Régions group.

> Operation of the Board of Directors during the fiscal year

Review of Directors' independence

As it does every year, the Board of Directors, meeting on February 19, 2014, upon recommendation of the Nomination and Compensation Committee, reviewed the independence of each Director.

As of February 19, 2014, Danone's Board of Directors is composed of 13 Directors, of which eight are considered to be independent (within the meaning of the AFEP-MEDEF Code), giving an independence rate of 62%. Moreover, the Chairmen of all the Board's Committees are independent Directors.

The five Directors who are not considered to be independent are:

  • Messrs. Franck RIBOUD, Emmanuel FABER and Bernard HOURS in their capacity as executive directors;
  • Mr. Jacques VINCENT, in his capacity as a former executive director and officer of Danone (he was Deputy General Manager until April 2010), it being specified that Mr. Jacques VINCENT has advised that he does not wish to seek renewal of his term of office; and
  • Mrs. Isabelle SEILLIER, an executive employee within the J.P. Morgan banking group, which is one of the banks with which the Group regularly conducts business. Various measures have been implemented within the Board's rules of procedure to ensure that any potential conflicts of interest linked to Mrs. Isabelle SEILLIER's responsibilities are properly controlled by the Group, namely: (i) systematic abstention by Mrs. Isabelle SEILLIER from participating in discussions and voting on any deliberations which could place her in a situation in which there is a conflict of interest involving, directly or indirectly, the J.P. Morgan group, (ii) express reference in the report of the Board of Directors to the Shareholders' Meeting of her designation as a non-independent Director and of the existence of potential conflicts of interest involving her, (iii) full transparency on compensation terms for the J.P. Morgan group by the Danone Group as part of agreements subject to shareholders' approval, and (iv) a systematic resolution concerning all new related-party agreements entered into with the J.P. Morgan group, which will automatically be put to a separate shareholders' vote during the subsequent Shareholders' Meeting.

The eight independent Directors are Messrs. Bruno BONNELL, Jacques-Antoine GRANJON, Richard GOBLET D'ALVIELLA, Jean LAURENT, Benoît POTIER, Jean-Michel SEVERINO, Mrs. Mouna SEPEHRI and Mrs. Virginia STALLINGS, who meet all of the AFEP-MEDEF Code's independence criteria at February 28, 2014:

  • in response to a question from a shareholder representative concerning Mr. Richard GOBLET D'ALVIELLA's independence due to his responsibilities within Sofina, it was specified that Mr. Richard GOBLET D'ALVIELLA is the Executive Chairman of Sofina, who held, as of December 31, 2013, 2.2% of Danone's share capital and 3.8% of its gross voting rights (due to the double voting rights mechanism provided in the by-laws). As a result of this relatively low stake, the Board confirmed that Mr. Richard GOBLET D'ALVIELLA satisfies all of the AFEP-MEDEF Code's independence criteria and that his situation is not likely to be a source of any conflicts of interest;
  • in response to a question from the same shareholder representative concerning Mrs. Mouna SEPEHRI's independence due to her responsibilities within Renault, it was noted that her independence was specifically reviewed by the Nomination and Compensation Committee, followed by the Board of Directors in February 2012, when her candidacy was being considered. Thus, consideration was given as to whether the presence of Mr. Franck RIBOUD on the board of directors of Renault, a group in which Mrs. Mouna SEPEHRI performs management functions, could compromise Mrs. Mouna SEPEHRI's independence. Pursuant to the rules of the AFEP-MEDEF Code, the independence of a Director would be compromised only if the said Director was himself/herself an executive director and officer of Renault, which is not the case here (since Mrs. Mouna SEPEHRI is not a director of Renault). The Board therefore confirmed that Mrs. Mouna SEPEHRI satisfies all of the AFEP-MEDEF Code independence criteria and that her situation is not likely to be a source of any conflicts of interest;
  • concerning Mr. Jean LAURENT, Lead Independent Director and Chairman of the Nomination and Compensation Committee, given his position within Eurazeo (he is not an executive director and officer but Vice-Chairman of the Supervisory Board), the Board of Directors at its meeting on February 18, 2013, deemed that, at the time of his appointment as Lead Independent Director, in view of the small stake Eurazeo held in the Company's share capital, he fully satisfied the independence criteria of the AFEP-MEDEF Code. In 2013, Eurazeo transferred practically all the DANONE shares it held to bearers of Eurazeo bonds convertible into existing DANONE shares; as of December 31, 2013, Eurazeo thus holds a residual shareholding representing approximately 0.01% of Danone's share capital;
  • concerning the proposal to renew the term of office of Mr. Bruno BONNELL, the Board of Directors of February 19, 2014, upon the recommendation of the Nomination and Compensation Committee, examined his situation with regard to the regulations of the AFEP-MEDEF Code defining the independence criteria for directors, and notably the criterion under which a director would lose his/her independence once his/her term of office exceeds 12 years. On this point, however, the Board considered that Danone has a dual economic and social project, which gives it a unique culture, which the Group has reaffirmed in its strategy, governing bodies, performance measurement and management performance for a number of years. The Board has stressed on many occasions the primary importance that it attaches to the Company's cultural factors in order to assess the pertinence and feasibility of the projects submitted to its approval. It considers that Danone's culture with respect to its dual project is a unique competitive advantage, for the Group and in the interests of its shareholders. As such, the Board has observed that within the collective decision-making approach taken at its meetings, the ability to view the development of cultural traits specific to the Company and its mission in the long-term is a real benefit which clarifies the Board's work. The Board thus believes that the holding of a term of office over a long period constitutes a measure of an ability to contribute to the Board's work in a free and autonomous manner while ensuring that the Group's identity and culture are preserved, rather than being an obstacle to independence, and that additionally, the length of service on the Board should not be used solely to determine the non-independence of a Director. Furthermore, the Board has observed that Mr. Bruno BONNELL has continually proven his particularly noteworthy independence of thought and freedom of speech, which have led him to take up marked and constructive positions and to provide specific and differentiated viewpoints during Board discussions. The Board noted that these positions have enriched its decisions and that the independence of such decisions is an important value for Danone, within a Board of Directors which has a majority of independent Directors as defined using the strictest application of current standards. In view of these elements, the Board has therefore decided that Mr. BONNELL is considered to be an independent Director for the purpose of the renewal of his term of office.

Moreover, in reviewing the proposed appointments as Directors, upon recommendation of the Nomination and Compensation Committee, the Board examined the positions of Mrs. Gaëlle OLIVIER and Mr. Lionel ZINSOU-DERLIN in light of the independence rules of the AFEP-MEDEF Code.

It concluded that Mrs. Gaëlle OLIVIER and Mr. Lionel ZINSOU-DERLIN should be considered independent Directors since they meet all the independence criteria of the AFEP-MEDEF Code applied by the Board. The detailed analysis of candidates' independence is given in the report of the Board of Directors to the Shareholders' Meeting on the resolutions (see section 8.3 Comments on the resolutions of the Shareholders' Meeting).

Conflicts of interest

To the Company's knowledge, on one hand there are no family ties between the Company's executive directors and officers, and on the other hand during the last five years, no executive director and officer has been convicted of fraud, declared bankruptcy, been placed in receivership or liquidation, been officially and publicly accused and/or penalized by any statutory or regulatory authority, or been deprived by a court of the right to hold a position in a company's administrative, management or supervisory bodies or to participate in a company's management or business operations.

To the Company's knowledge, there are no potential conflicts of interest between any Director's duties to the Company and their private interests and/or other duties, with the exception of Mrs. Isabelle SEILLIER.

In the case of Mrs. Isabelle SEILLIER, the matter was reviewed by the Nomination and Compensation Committee, and the Board, at its meeting in February 2011 during the review of her proposed appointment as Director, and again in February 2014 during the review of the renewal of her term of office as Director, acknowledged the existence of a potential conflict of interest due to her position as an executive of the J.P. Morgan banking group, which is one of the banks with which the Group regularly conducts business. Due to the foregoing, the Board's rules of procedure were amended in 2011 to reinforce Directors' reporting obligations with respect to conflicts of interest (see section Duty to report conflicts of interest above). Furthermore, in accordance with the law and the Board's rules of procedure, as from her appointment, Mrs. Isabelle SEILLIER has not participated in any discussions or votes on any decisions that may create a conflict of interest for her. Moreover, the new related-party agreements concluded with the J.P. Morgan group are the subject of specific disclosure in the Board's report to the Shareholders' Meeting of April 29, 2014 on the resolutions (see section 8.3 Comments on the resolutions of the Shareholders' Meeting).

As of the date of this Registration Document, no executive director and officer is a party to a service agreement with the Company or any of its subsidiaries that provides him/her with any specific benefits (with the exception of Mr. Bernard HOURS, Deputy General Manager, following the conclusion of a Statutory Director contract with a Dutch subsidiary of Danone, Danone Trading B.V. See sections 6.5 Statutory auditors' special report on related party agreements and commitments and 8.3 Comments on the resolutions of the Shareholders' Meeting).

Directors' attendance fees

Amount of Directors' attendance fees for 2013

The gross amount of attendance fees due in respect of 2013 was €512,000 (€515,000 in 2012).

Amount authorized by the Shareholders' Meeting of April 25, 2013 and rules for allocating attendance fees as of January 1, 2014

The Shareholders' Meeting of April 25, 2013 increased the maximum total yearly amount of attendance fees to be divided by the Board of Directors among its members from €600,000 to €800,000.

As stated by the Board in its report to the Shareholders' Meeting of April 25, 2013, the total amount of attendance fees has been used for the following purposes only: (i) to cover the compensation payable to the Lead Independent Director appointed by the Board of Directors at its meeting on February 18, 2013 for the fixed amount of €50,000 per year, and (ii) to take into account the specific situation of Directors residing outside France through the allocation of an additional amount to cover their travel expenses to attend Board meetings (€1,000 for Directors residing in Europe and €2,000 for Directors residing outside Europe).

In order to take into account the general economic environment and the current position of the Group, the Board of Directors preferred not to amend the other rules for the allocation of attendance fees for the fiscal year 2013, and more particularly, not to increase the amount of the unitary Directors' attendance fees in 2014 (with the exception of two changes set out above).

The Board reiterated this commitment for the fiscal year 2014 and again preferred not to amend the rules for allocating attendance fees, and more particularly, not to increase the amount of unitary attendance fees for Directors. Nevertheless, the Board decided to raise the additional amounts allocated to Directors residing outside France to cover their travel expenses to attend Board meetings, with effect from January 1, 2014.

Similarly, any increase in the amounts to be paid to Directors which may, where relevant, be decided upon as of 2015, will relate only to the variable portion, in order to encourage attendance at Board meetings, in line with the AFEP-MEDEF Code.

Lastly, at the time the Directors representing employees will take office (by end-2014), the Board will examine the possibility of submitting a resolution to the vote at the Shareholders' Meeting called to approve the 2014 financial statements, intended to raise the maximum total yearly amount of attendance fees in order to solely take into account the increase in the number of Directors.

Accordingly, as of January 1, 2014, the rules for allocating attendance fees are as follows:

(i) Fixed portion
      • Director: fixed amount of €10,000 per year (amount unchanged); and
      • Lead Independent Director: fixed amount of €50,000 per year (amount unchanged).
(ii) Variable portion
Board of Directors' meetings
      • €2,000 per meeting (amount unchanged); and
      • for travel by Directors residing outside of France:
        • an additional amount of €2,000 per trip to a meeting of the Board of Directors for Directors residing elsewhere in Europe (compared with €1,000 prior to December 31, 2013), and
        • an additional amount of €4,000 per trip to a meeting of the Board of Directors for Directors residing outside Europe (compared with €2,000 prior to December 31, 2013).

    It is reminded that the rules set out above also apply to meetings of independent Directors convened by the Lead Independent Director.

Meetings of Board Committees
      • Members: €4,000 per meeting (amount unchanged); and
      • Chairmen: €8,000 per meeting (amount unchanged).

Moreover, for the additional travel expenses to attend Board's Committees meetings, the same rules apply as those specified for Directors.

Self-assessment of the Board of Directors

In accordance with its rules of procedure, every two years, the Board of Directors conducts a self-assessment (most recently in 2008, 2010 and 2012), which covers the composition, organization and operation of the Board itself and of each of its Committees. Following each of these self-assessments, the Board amended its operating methods and rules of procedure.

Self-assessments in 2008 and 2010

The Board's self-assessment in 2008 led the Board of Directors to amend its rules of procedure in order to notably: (i) clarify the rules concerning information to be provided to the Board on the Company's financial position (i.e. at least once every six months, which was already the practice) and (ii) definitively prohibit Directors from using any hedging instruments in connection with the Company's shares. In addition, following this self-assessment, a dedicated one-day off-site meeting was initiated for presenting and discussing strategic plans and the annual budget.

The self-assessment of the Board in 2010 notably led to improvements in: (i) the operation of the Board, by the introduction of annual meetings on specific topics, (ii) the integration of new Directors, by offering them the opportunity to benefit from the support of a dedicated Director during their first 12 months in office and an integration process including site visits and meetings with operational managers, and (iii) the composition of the Board, particularly as regards its independence and the diversity of its composition.

Self-assessment in 2012

The most recent self-assessment of the Board and its various Committees was conducted in December 2012. The findings of this self-assessment were reviewed at the Board meeting on February 18, 2013.

This self-assessment highlighted the fact that Directors regard the Board's operation and composition to be satisfactory overall. However, the Directors expressed their wish to (i) strengthen the balance of powers between the Board and General Management, and (ii) continue to improve the integration of new Directors.

At the date of this Registration Document, the following improvements have been implemented:

  • creation of the position of a Lead Independent Director in the event of the absence of separation of the offices of Chairman of the Board of Directors and of Chief Executive Officer of the Company;
  • implementation of an improved integration process for new Directors comprising (i) individual meetings with several existing Directors and (ii) individual meetings with members of General Management and the Executive Committee;
  • improved training provided to all Directors: proposed presentation skills training sessions by the managers of the Group's main functions, continuation of site visits and Directors to be encouraged to undertake external training; and
  • implementation of a regular update on the results of the Board of Directors' assessment.
> Work performed by the Board of Directors

Actions undertaken to improve the efficiency of the Board of Directors' operation continued in 2013.

The Board of Directors met seven times in 2013 (nine times in 2012). The average length of each meeting was two hours and forty minutes (compared to two and a half hours in 2012).

Directors' attendance, expressed by their attendance rate at meetings, was 89% in 2013 (92% in 2012).

Following discussions with the shareholders, the decision was taken to disclose, when a Director's term of office is being renewed by the Shareholders' Meeting, said Director's individual average attendance rate at Board meetings, for the full duration of his/her expiring term of office. With effect from this year, it was also decided to disclose the individual average attendance rate at meetings of Committees on which Directors whose term is proposed for renewal sit.

Recurring matters

The following recurring matters were reviewed and discussed by the Board of Directors in 2013:

(i) Monitoring major policies of day-to-day management

Detailed review of the Group's business activities, presentation of annual budgets, approving statutory and consolidated annual financial statements, approving the semi-annual financial statements, financial communications (in particular, when the annual and semi-annual financial statements are published), main acquisitions and sales of assets or equity interests, reviewing the Group's financial position and its indebtedness (changes, amount, composition and repayment dates, off-balance sheet commitments, equity levels, liquidity, hedging of financial risks, credit ratings), reviewing the Statutory auditors' approach to their work, reviewing financial commitments (security interests and guarantees), monitoring the Group's financial communication policy including reviewing all press releases bearing on the annual and interim financial statements, annual authorization to General Management with respect to the Group's bond issuance program (EMTN), receiving regular information on the Group's risk management and internal control systems and reviewing the Group's risks by overseeing the work of the Audit Committee, implementing the share buyback program, annual capital increases reserved for employees, allotting Group performance units and Group performance shares (including setting, each year, the performance objectives for the following year and verifying that such objectives were met the previous year), following up the Company's share price and shareholding, setting the proposed dividend, approving the Group's yearly contributions to danone.communities and the Danone Ecosystem Fund, as well as discussing Danone's policy on gender work and pay equality.

(ii) Operation of corporate bodies

Follow-up of corporate governance issues, receiving regular reports on the meetings of the three Board Committees (Audit Committee, Nomination and Compensation Committee and Social Responsibility Committee), which are submitted to the Board after each meeting, determining all components of the compensation of each of the Company's three executive directors and officers, approving the various Board reports and proposed resolutions submitted for shareholders' approval, and preparing the Shareholders' Meeting.

(iii) Group strategy

Reviewing the Group's transformation priorities (i.e., exposure to emerging markets, prioritizing certain key countries, etc.) and their various impacts on the Group (in terms of organization and operation of human resources, adjustment of the Group's products to local demand, etc.), attending annual strategic presentations made to the Board by each member of the Executive Committee at a dedicated one-day event held off-site. All these matters and presentations are always followed by in-depth discussions with the Directors.
In addition, each year Directors are invited to attend several working days organized in Evian, where an annual seminar is held for all of the Group's executives, during which the strategies of the Group's various Divisions are reviewed and discussed.

Specific matters

The following specific matters were reviewed by the Board of Directors in 2013 and in February 2014:

(i) Transactions and the Group's accounting and financial position
      • review of the year-end closing process in connection with the 2013 parent company and consolidated financial statements;
      • share repurchase and reallocation transactions completed in 2013 and cancellation of treasury shares upon completion of these transactions;
      • monitoring of the Group's indebtedness (change, amount, composition and redemption schedules);
      • review of the annual delegation of powers to General Management for bond issues, under or outside of the Group's bond issue program (EMTN), including the raising of the authorized bond issue ceiling;
      • review of the annual authorization in connection with the Group's commercial paper issue program;
      • review of the Group's financing operations, including the extension for an additional year of the €2 billion syndicated facilities agreement;
      • authorization given to the Company to sign a subscription agreement in the framework of a bond issue carried out by the Company under the EMTN program with the Group's banks authorized to place the bonds, including J.P. Morgan Securities PLC (see section 8.3 Comments on the resolutions of the Shareholders' Meeting);
      • review of the authorization for Danone's guarantee, in the total amount of €750 million, for commitments of Danone Corporate Finance Services (in connection with financial risk management transactions carried out by it on behalf of Group companies); and
      • in connection with the Shareholders' Meeting of April 29, 2014, review of the resolutions to be submitted to the Shareholders' Meeting regarding the renewal of the share repurchase program, the Group's performance share plan and the resolution on the payment of dividends.
(ii) Corporate governance

In connection with the composition of the Board of Directors

      • in the context of its meeting of July 26, 2013, the Board of Directors acknowledged the wish of Mr. Yoshihiro KAWABATA, non-independent Director, to resign from his position on the Board of Directors;
      • at its meeting of February 19, 2014, the Board acknowledged the decision of Mr. Jacques VINCENT, non-independent Director and former Deputy General Manager of Danone, not to seek the renewal of his term of office.

In connection with the composition of the Nomination and Compensation Committee

      • in the context of its meeting of July 26, 2013, the Board of Directors decided to appoint Mr. Richard GOBLET D'ALVIELLA as a member of the Nomination and Compensation Committee to replace Mr. Yoshihiro KAWABATA.

In connection with the implementation of the new recommendations of the AFEP-MEDEF Code

      • review of the new recommendations of the AFEP-MEDEF Code following its revision in June 2013; and
      • review of the rules of procedure of the Board of Directors and those of the three Board Committees, in order, to ensure they are compliant with the new recommendations of the AFEP-MEDEF Code.

In connection with the Shareholders' Meeting of April 25, 2013

      • review of the composition of the Board and, more specifically, consideration of (i) the renewal of the terms of office as Directors of Messrs. Franck RIBOUD and Emmanuel FABER and (ii) the renewal of their respective terms of office as Chairman and Chief Executive Officer and Deputy General Manager, subject to the condition precedent of the renewal of their terms of office as Directors by the Shareholders' Meeting.

    During this review, the Board paid particular attention to the following matters:

        • concerning Mr. Franck RIBOUD: The Board of Directors examined his position in light of: (i) the rules on concurrent holding of corporate offices, (ii) maintaining the absence of separation of the offices of Chairman of the Board of Directors and of Chief Executive Officer particularly with regard to the creation of a Lead Independent Director (see section Lead Independent Director hereafter), (iii) maintaining his suspended employment contract, (iv) indemnities for breach of his employment contract, and (v) the obligation to retain DANONE shares acquired through the grant of Group performance shares; and
        • concerning Mr. Emmanuel FABER: the Board of Directors also examined his situation with regard to (i) the rules on the concurrent holding of corporate offices, (ii) the indemnities for breach of his suspended employment contract and (iii) his obligations to retain DANONE shares acquired through the grant of Group performance shares;
      • review of the amount of attendance fees paid to the Directors and the proposal to increase the total maximum amount and to amend the rules for the allocation of attendance fees (see section Directors' attendance fees above);
      • amendments to the Board's rules of procedure concerning, in particular, the creation of the position of Lead Independent Director;
      • review of the self-assessment of the Board of Directors and annual update on the operation of the Board; and
      • review and authorization of related-party agreements.
In connection with the Shareholders' Meeting of April 29, 2014
      • review of (i) the composition of the Board, in the context of the policy on the renewal of members' terms of office and the appointment of new members, particularly with regard to the percentage of women and independent members on the Board, and (ii) the diversity of the Board's composition, leading to the proposal to renew the terms of office of Messrs. Bruno BONNELL, Bernard HOURS, Jean-Michel SEVERINO and Mrs. Isabelle SEILLIER and to appoint Mrs. Gaëlle OLIVIER and Monsieur Lionel ZINSOU-DERLIN as Directors;
      • review of the amendment necessary to the by-laws in order to designate Directors representing employees as Board members, in accordance with the French Act of June 14, 2013 concerning job security;
      • review of Mr. Bernard HOURS's position, particularly in connection with the execution of a Dutch Statutory Director mandate agreement with one of Danone's Dutch subsidiaries, Danone Trading B.V., in order to organize the operational management of the Group's four Divisions, by Mr. Bernard HOURS, from Schiphol as from January 1, 2014 (see sections 6.5 Statutory auditors' special report on related party agreements and commitments and 8.3 Comments on the resolutions of the Shareholders' Meeting).
      • Said review concerning in particular:
        • all aspects of compensation in connection with his appointment as Deputy General Manager and his mandate agreement with Danone Trading B.V., which remain (i) stable overall in terms of the amount versus his current compensation, (ii) consistent with the Group's compensation policy, and (iii) compliant with the recommendations of the AFEP-MEDEF Code; and
        • the indemnities for termination for Mr. Bernard HOURS (the principles, payment conditions and maximum amount of which remain unchanged) to ensure compliance with the AFEP-MEDEF Code.
(iii) The Group's activity and strategy for fiscal year 2013
      • regular review of progress on the plan for savings and adaptation in Europe, including its social aspects, monitoring the costs incurred and savings achieved, as well as the impact of the plan on the Group's organization; and
      • review and regular follow up throughout the second half of 2013 of the causes and consequences of the various crises and risks to which the Group was exposed during the year, and in particular, the false quality alert issued by Fonterra in Asia (concerning the possible bacteriological contamination of batches of ingredients supplied to the Group by this New-Zealand supplier and used in the production of baby milk in Asia) and its consequences for the Group. Following the Board's work in this regard, and supported by the recommendations of the Audit and Social Responsibility Committees, the Group decided that, given its increasing exposure to emerging countries (Asia, Latin America and now Africa) and the resulting changes to its risk profile, it will review the Group's various systems and internal control and compliance procedures, and dedicate additional means and resources to said procedures as from 2014.
(iv) Equity divestments and acquisitions
      • review of the acquisition of an equity stake in the Mengniu group;
      • review of the acquisition of the Fan Milk group in association with the Abraaj group;
      • review of the acquisition of the US company, Happy Family;
      • review of the new cooperation agreement with Yakult to replace the strategic alliance; and
      • following up the acquisition of a controlling interest in Centrale Laitière.
(v) Corporate Social Responsibility (CSR)
      • annual review of the Group's situation and policy concerning gender work and pay equality;
      • review of the Group's non-financial risks, particularly reputation risk; and
      • monitoring the activities of the Danone Ecosystem Fund, danone.‌communities and Livelihoods funds.
(vi) Compensation for executive directors and officers
      • determining the various elements of variable compensation due to each of the executive directors and officers in respect of 2013 and setting of targets for the various elements of variable compensation in respect of 2014, based on a proposal from the Nomination and Compensation Committee.

Work of the Lead Independent Director

Since his appointment, the Lead Independent Director performed the following duties:

  • review of conflict-of-interest questionnaires submitted by Directors at the end of the year to confirm that no conflicts of interest exist;
  • review of amendments to the new AFEP-MEDEF Code and the corresponding amendments to the rules of procedure of the Board and its Committees, as part of his role as Chairman of the Nomination and Compensation Committee;
  • introduction, as part of his duties as Chairman of the Nomination and Compensation Committee, of consultation with shareholders during the 2014 Shareholders' Meeting on the individual compensation paid to senior management ("say on pay"), involving a review of all of the components of variable medium- and long-term compensation so as to ensure increased transparency, on the one hand, and a stronger correlation between the Group's performance and compensation paid to senior management on the other;
  • in the context of his duties as Chairman of the Social Responsibility Committee, and in consultation with the Chairman of the Audit Committee, the Lead Independent Director coordinated and co-chaired a joint meeting of these two committees on December 10, 2013, to examine the Group's compliance policy;
  • presentation of an initial report on his work since his appointment during the meeting of the Board of Directors on February 19, 2014; and
  • finally, he held regular meetings with the Group's General Management and kept abreast of its latest developments, notably through reviewing analysts' notes and regular press summaries relating to Danone, its competitors and customers.
Board of Directors Committees

Danone's Board of Directors also includes an Audit Committee, a Nomination and Compensation Committee and Social Responsibility Committee composed of independent directors.

Below is a summary of our committee structure and membership information. To read more about any of the committees, click on committee names in the chart below.

Executive Committee

Under the authority of the management, the Executive Committee meets once a month. It ensures the operational direction of the Company, implements the strategy defined by the Board of Directors, checks the coherence of the actions taken by the operational business lines and business units, decides on the action plans and agrees on the budget.

The biographies of the Executive Committee members are available in the following section:

Remuneration and regulated commitments with regard to Danone's Executive Officers
> Remuneration of Danone's executive officers

2014

Remuneration of Danone's executive officers in 2014 Download the PDF
2014 grants to Danone's corporate officers Download the PDF

2013

Remuneration of Danone's executive officers in 2013 Download the PDF
2013 grants to Danone's corporate officers Download the PDF

2012

Remuneration of Danone's executive officers in 2012 Download the PDF
2012 grants to Danone's corporate officers Download the PDF

2011

Remuneration of Danone's executive officers in 2011Download the PDF
2011 grants to Danone's corporate officers Download the PDF

2010

Remuneration of Danone's executive officers in 2010Download the PDF
2010 grants to Danone's corporate officers Download the PDF

2009

Remuneration of Danone's executive officers in 2009 Download the PDF
2009 grants to Danone's corporate officers Download the PDF

> Regulated commitments

Published in conformity with Article R 225-34-1 of the French Code of Commerce

Regulated commitments with regard to Mr. Hours - Board of Directors of February 19th, 2014 Download the PDF
Regulated commitments with regard to Mr. Hours - Board of Directors of December 10th, 2013 Download the PDF
Regulated commitments with regard to Mr. Faber - Board of Directors of February 18th, 2013 Download the PDF
Regulated commitments with regard to Mr. Riboud - Board of Directors of February 18th, 2013 Download the PDF
Regulated commitments with regard to Mr. Hours - Board of Directors of February 14th 2011Download the PDF
Regulated commitments with regard to Mr. Hours - Board of Directors of February 13th 2010 Download the PDF
Regulated commitments with regard to Mr. Faber - Board of Directors of February 13th 2010 Download the PDF
Regulated commitments with regard to Mr. Riboud - Board of Directors of February 13th 2010 Download the PDF
Regulated commitments with regard to Messrs. Riboud, Vincent, Faber and Hours – Board of Directors of February 13th 2008 Download the PDF