Management and governance of corporate social responsibility

Our Group corporate social responsibility standards, containing the Code of Business Ethics and the Corporate Social Responsibility Guidelines, forms the basis of our approach to CSR.

The Director of Corporate Affairs, a member of the Group’s Management Committee, oversees corporate social responsibility (CSR).

He is supported by a Corporate Social Responsibility Committee, with representatives from Group functions including HR, Internal Audit, Financial Control and Manufacturing as well as a representative from Cartier, the Group’s largest business unit.

The CSR Committee meets at least twice a year to review progress against the framework and agree activities to support relevant programmes.

Each Maison and Region has appointed a CSR Representative who promotes and coordinates the implementation of the CSR principles. Some large business units have also appointed dedicated representatives for sub-units.

We organise a yearly CSR Meeting and invite the CSR Representatives of each Maison and region to share progress and best-practices, discuss activities and agree goals and priorities for the coming year.

During the year, as we work on projects and new practices are implemented, we use an intranet tool to facilitate the sharing and dissemination of information.

Governance of CSR issues

Oversight and governance of our corporate social responsibility performance sits with our highest governance body – the Board of Directors of the parent company, Compagnie Financière Richemont SA. The Director of Corporate Affairs is the board member responsible for CSR.

Governance structure

The Board of Directors of Compagnie Financière Richemont SA is responsible for the overall strategic direction of the Group and the appointment of senior management. In addition, it is responsible for establishing financial controls and appropriate procedures for the management of risk within the Group as well as the overall supervision of the business. The Board is responsible for the preparation of the financial statements of the company and of the Group and for the organisation of the annual meeting of shareholders. The Board is composed principally of non-executive directors with diverse professional and business backgrounds.

The Board of Compagnie Financière Richemont SA is the Group’s supervisory board, composed of a majority of non-executive directors. The Management Committee of the Board, composed exclusively of executive directors, is charged by the Board of Directors of Compagnie Financière Richemont SA with implementing the strategic policies determined by the Board. It is empowered to conduct the day-to-day strategic and operational management.

Further details are provided in the Corporate Governance section of the website.

Plans for a possible restructuring of the Group were announced in May 2008 and a further announcement is anticipated in due course.

The Board oversees the company’s management in terms of its social, economic and environmental performance. The Director of Corporate Affairs attends board meetings and regularly updates the Board on developments in this area.

Performance and reward

The Compensation Committee of the Board reviews and sets the remuneration policy for senior management based on performance against business key performance indicators.