LISI GROUP - 2018 Financial report

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■■at themeeting of October 24, 2018, theBoard noted theGroup’s activity
and results for the first nine months of the year and the end-of-year
forecasts. It then turned to the Company’s governance issues which
werethemainfocusofthemeetingbyexaminingaspecific“Governance”
dossier prepared and presented with the assistance of a specialist
consultant;
Four main conclusions are drawn from this dossier:
−− the practices which do not comply with the new rules of the
AFEP‑MEDEF Code reviewed in June 2018 which must be dealt with
in the coming year;
−− Directors’ expectations, particularly as regards strategy and
corporate governance highlighted in the results of the recent self-
assessment questionnaire; a summary was provided at themeeting
by the Company’s Vice-Chairwoman and the Senior Independent
Director of the Company;
−− aprojectforanewmodeofoperationfortheBoardanditscommittees
put forward by the Company’s Chairman;
−− a proposal for compensation of members of the Board and its
committeestobringtheCompany’scompensationpracticesinto line
with those of comparable benchmarked companies;
■■The last meeting in the year, held on December 12, 2018, was reserved
for the presentation of the Company’s budget for the coming year and
the annual strategic review.
The Board noted the different orientations of the new 2018‑2022
strategic plan presented by the Group’s Senior Management, themajor
prioritiestheGrouphasdeterminedbasedonthisplanandthestrategic
issues to be dealt with in 2019. On this last point, the Board requested
the Strategic Committee to meet early the following year to develop a
methodological approachenabling theBoardmembers todeal with the
most pressing strategic issues. It then noted the budget outlook for
2019 and approved all of the data submitted to it.
Lastly,theBoardsetupanewperformanceshareallocationplancalled
18C20 and laid down the rules applicable to it including the precise
performance criteria.
2.2.2 ICommittee activities in 2018
Board Committees met six times during the financial year 2018 and the
meeting attendance rate of its members was 100%.
■■Audit Committee:the Committeemet twice in the financial year 2018.
It heard the Auditors report on the performance of their task and was
informed by the Company’s Internal Control Manager. Information
relatingtothescopeofconsolidationandtotheoff-balancesheetrisks
described in the notes to the consolidated financial statements was
sent to the Audit Committee, which submitted a report on its work to
the Board of Directors. The Committee also reviewed the impairment
tests, the control of the Group’s major investments and the risk of
competing technological developments.
■■NominationsCommittee:theCommitteemetonce inthefinancialyear
2018.
As regards the composition of the Board and its committees, the
Nominations Committee examined the application of a new director
which it had selected and decided to submit to the Board for approval.
■■Compensation Committee: the Committeemet twice in 2018.
It presented its recommendations to the Board on the rules and terms
for compensation for the members of the Senior Management of
LISI S.A., set as variables. The Committee also submitted to the Board
its proposals for the implementation and awarding of the 2015 (15C17
plan) and 2018 (18C20) performance share plans.
■■Strategic Committee: the Committeemet once in 2018.
It reviewed the Group’s 2018‑2022 strategic plan presented by the LISI
senior management, together with the leaders of the Aerospace,
Automotive and Medical Divisions and approved the strategic
orientations that were exposed to it in detail as well as the key figures
in this plan. It also took note of the key issues referred to in plan and
whichseniormanagementintendstoaddressduringfinancialyear2019.
2.2.3 IBoard of Directors’ assessment
For several years now, the LISI Board of Directors has been assessing
itself and intends to continue and deepen this approach. Therefore,
during 2018, the Board assessed its operation in accordance with the
provisions of the AFEP/MEDEF Code.
Aquestionnaire,basedonthepreviousquestionnaireanddevelopedwith
input froma specialized consultant, was published in order to assess the
efficiency of the Company governance, its suitability with regard to the
standards to which the Board refers in this matter and the expectations
of the Board members, was sent to each director. It covered the role,
operation and quality of the work conducted by the Board and the
specialized committees and paved the way for discussion about the
evaluation of the individual contribution of its members.
The results were presented at the Boardmeeting on October 24, 2018.
Thedirectorsexpressedanoverallsatisfactionratingof87%concerning
the themes tackled.
■■Key priorities were the operating procedures of the Board and its
committees, relationswith theCompany’s seniormanagement and the
Board’s knowledge of the Group’s risk analysis andmanagement.
■■The specific areas for improvement concerned the new chapters
opened up by the AFEP-MEDEF Code which was revised in June 2018,
particularly Board information about the way the Group deals with
corporate social responsibility issues, the corruption prevention and
detection system and the Company’s diversity policy as applied within
its governing bodies. The Board as a whole also wants to deepen the
strategicthinking(“moretimespentonanalysisanddebate”)and, inthis
connection,the informationnecessarytosuchthinking(“moredetailed
information on the different markets in which the Group operates, its
competitive environment and technology progress and, lastly, on the
key people of the divisions in charge of the Group’s strategic
development”).