Universal Registration Document 2019

146 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Corporate governance 6 removal of the independence criterion which will impact several directors in the coming years. At the conclusion of the discussion, the Committee decided to submit five proposals in this area for the Board’s approval. ■ Compensation Committee: the Committee met twice in the financial year 2019. 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 2016 (16C18 plan) and 2019 (19C21) performance share plans. TheCommitteealso reviewed theBoard’sdraft compensation plan for 2020 to be presented to the Board for final approval. ■ Strategic Committee: the Committee met twice in the financial year 2019. The Committee first met in the spring of 2019 for a presentation by Senior Management on the strategies of the divisions and of the Business Group and to discuss the major issues of each of these components. Several areas for development were identified following the discussions and the Board asked management to set the directions for the year-end period. The Committee met again in the fall of 2019 for a general presentation on the Group’s strategic plan updated for 2019‑2023. It was presented by LISI Senior Management together with the managers of the Aerospace, Automotive and Medical Divisions. At the end of the presentation, the Committee recorded the major strategic issues to be submitted to the Board for a decision onwhich ones to tackle in 2020. 1.3  /  Board of Directors’ assessment For several years now, the LISI Board of Directors has been assessing itself and intends to continue and deepen this approach. The assessment exercise carried out by the Board at the end of 2018 highlighted areas for improvement, in particular in the areas of Corporate Social Responsibility, the corruption prevention and detection system, and the Company’s diversity policy as implemented within its governing bodies. Each of these topics was handled by the Committees and the Board in 2019, as illustrated by the work described in the two previous chapters. At the end of 2019, the Board conducted a self-assessment of each member’s contributions and skills. The exercise, carried out for the first time, highlighted, on the one hand, the progress made in the areas covered and, on the other, new areas for improvement in the Company’s governance, which will be included in 2020 action plans. 2  /  The administrative bodies 2.1  /  Composition of the Board of Directors and of the specialized Committees As of December 31, 2019, the Group’s Board of Directors consisted of 14 members. ■ The Board’s members include nine family group directors, four “independent” directors as strictly defined by the AFEP‑MEDEF Code, revised in June 2018 and used by the Company and one “qualified person” director who has been a director of LISI for more than 12 years and who thus no longer enjoys the status of independent director. The representation rate for these three groups is therefore as follows: 64% for Family Directors, 29% for Qualified Persons and 7% for Independent Directors. This distribution corresponds globally to the capital structure of the Company, with the family groups holding nearly 66% of the share capital of LISI as of December 31, 2019. ■ Similarly, the Board is composed of six women and eight men, and the proportion of women members of the Board is therefore 43%. ■ In order to be in strict compliance with the provisions of the AFEP-MEDEF Code, revised in June 2018, the Board will continue its strategy to reach the formal rate of one third of independent directors. ■ TheBoardof Directorswill appoint twodirectors representing the employees in 2020. To do so, it will propose a resolution to the Extraordinary Shareholders’ General Meeting of April 24, 2020 intended to change the bylaws of the Company, i.e. Article 10.1 “Composition of the Board of Directors”. It will then ask the Group Works Council and the European Committee to each designate a director representing the employees. Once appointed, the directors will be trained before attending their first Board of Directors meeting scheduled for October 21, 2020.