Organisation of VINCI’s corporate governance
Since 6 May 2010 and most recently on 7 February 2018, the Company’s Board of Directors has opted for a system of governance in which the roles of Chairman of the Board and Chief Executive Officer are combined, with Xavier Huillard serving in both these positions.
The Board considers that this system is still the one best suited to ensure the proper governance of the VINCI Group. This decision is based on two key observations: (i) Mr Huillard brings together all the skills, expertise and other qualities needed to capably and efficiently lead the Group’s management team, as has been demonstrated for a number of years by the Group’s performance, and (ii) the Group’s organisation lends itself particularly well to this system of governance.
The VINCI Group’s organisational structure has the distinction of being highly decentralised. This decentralised approach is a style of management that has proven its merits for business lines where decisions must be taken at local level. It is given shape through the existence of many subsidiaries (more than 2,000), all of which operate autonomously.
Decisions relating to operations (such as the signing and performance of agreements and contracts) or investments are taken by the competent bodies in each entity, in full compliance with the internal control system implemented across the Group. This system provides for the supervision and control of commitments made by these entities at different levels. The most significant commitments are subject to supervision and control by VINCI’s Executive Management or by the Board itself, where required by the latter’s internal rules. Apart from its role with respect to accounting and financial matters, the Board is called upon to examine and approve transactions involving strategic issues or exceeding a certain threshold, which are submitted to the Board by Executive Management following its own review.
The result is that the respective roles of VINCI’s Executive Management and its Board of Directors have the same focus – operational and strategic management – as both are called upon to decide on the transactions submitted to them by the operational entities. Given this reality, the combination of the roles of Chairman of the Board and Chief Executive Officer makes sense. Furthermore, the Board believes that this system of governance, which also has the advantage of unifying the Group’s top-level representation toward third parties, can still be considered as particularly efficient.
As part of the formal assessment of its work carried out at the end of 2016, the Board reviewed its choice for the system of governance and concluded that the current system is still the one best suited to the Group’s circumstances, always with the aim of achieving optimal performance. At its meeting of 7 February 2018, the Board once again discussed its governance structure and confirmed that the system in which the roles of Chairman of the Board and Chief Executive Officer are combined remains the one best suited to the Company’s circumstances.
It should be noted that the Board has opted for different systems of governance over the years:
- combination of the roles of Chairman of the Board and Chief Executive Officer from 2000 to 2006;
- separation of these roles between 2006 and 2010;
- combination of these roles from 2010, with:
- the creation of the position of Vice-Chairman and Lead Director until 2018;
- then, starting in November 2018, the separation of the functions of Vice-President and Lead Director.
Each time, the Board selected the system best suited to the circumstances and profiles of the Company’s executives, in order to optimise the Group’s governance structure and thereby its performance. The Group therefore remains attentive with respect to the consequences of its choices regarding the system of governance so as to ensure that it continues to work in the best interests of its shareholders.
The division of responsibilities between the Company’s governance bodies, as set forth in the Board’s internal rules, is as follows:
|Board||Chairman and Chief Executive Officer|
|Responsibilities defined by law
- Additional responsibilities resulting from the internal rules:
- Appointment and terms of reference of the Vice-Chairman and Senior Director
- Prior approval of strategic choices
- Prior approval of strategic investments and transactions (acquisitions or disposals) that are material for the Group’s scope of consolidation, business activities, risk profile, earnings, the balance sheet and/or the VINCI share price and specifically those relating to an exposure in an amount greater than €200 million for the Group
- Prior approval of all transactions referred to the Strategy and CSR Committee
- Prior approval of all transactions that fall outside the Company’s announced strategy
- Organisation and supervision of the work of the BoardImplementation of decisions taken
- Operational management of the Group, in possession of the broadest powers to act in all circumstances in the Company’s name
|- Assistance provided to the Chairman as needed
- Insight provided to the Board on the Group’s operations and organisation based on his experience and knowledge of the Group - Representing the Group at the request of the Chairman
- Participation in meetings with shareholders or proxy advisers at the request of the Chairman
- Chairman of the Strategy and CSR Committee
|- Point of contact for Directors of the Board with regarding governance questions
- Point of contact for shareholders regarding governance questions
- Communication with institutional investors and proxy advisers at the request of the Chairman
- Right to ask the Chairman to call a Board Meeting and to request the addition of any item to the agenda
- Board Meeting held in the absence of the executive company officers once a year in order to evaluate their performance and assess the effectiveness of governance
- Chairman of the Appointments and Corporate Governance Committee
- Management of conflicts of interest
Chairman and Chief Executive Officer
Xavier Huillard has served as both Chairman of the Board and Chief Executive Officer since 6 May 2010. The Board renewed his appointment to these positions at its meeting of 15 April 2014, following the Shareholders’ General Meeting. At its meeting of 7 February 2018, the Board decided to propose the renewal of Mr Huillard’s term of office as Director at the Shareholders’ General Meeting called to approve the 2017 financial statements. Should the shareholders vote in favour of the corresponding resolution, the Board plans to renew his term of office as Chairman and Chief Executive Officer.
He has the responsibilities mentioned in the table above. He regularly presents the Group’s performance,prospects and strategy to the financial community, in particular through road shows.
Mr Huillard chairs both the Executive Committee and the Management and Coordination Committee.
Mr Huillard also chairs the Risk Committee with powers to delegate this function.
Organisation of VINCI’s Executive Management and corporate management structures
Mr Huillard has appointed Pierre Coppey, Richard Francioli and Christian Labeyrie as Executive Vice-Presidents.
He has formed an Executive Committee comprising the Group’s main operational and functional executives, which had 13 members at 7 February 2018.
Apart from implementing the Group’s strategy, the Executive Committee defines and monitors the implementation of its cross-cutting policies, particularly in the areas of risk management, finance, human resources, safety, IT and insurance. It met 21 times in 2017, thus an average of about two meetings per month.
The Management and Coordination Committee is composed of the members of the Executive Committee, together with the key operational and functional executives of the Group’s main companies, and had 29 members at 7 February 2018. Its purpose is to ensure broad consultation on VINCI’s strategy and position as well as on cross-cutting policies within the VINCI Group. The Management and Coordination Committee met three times in 2017.
The Board has confirmed Mr Yves-Thibault de Silguy’s appointment as Vice-Chairman with the responsibilities summarised above and set by the internal rules.
The position of Lead Director was created by the Board on 6 May 2010, when it decided to combine the roles of Chairman and Chief Executive Officer.
The purpose of this position, which has since been enshrined in Article 3.3 of the Afep-Medef code, is to ensure that the Board includes a member able to serve as a point of contact for all Directors distinct from the Chairman and Chief Executive Officer and who also has the personal powers necessary to guarantee the Board’s responsiveness in all circumstances.
This position was held by Mr Yves-Thibault de Silguy between 2010 and 2018. In November 2018, it was transferred to Mrs Yannick Assouad, Independent Lead Director.
The responsibilities of the Lead Director, summarised above, are set by the internal rules.
Services agreement between the Company and YTSeuropaconsultants
The services agreement signed on 17 April 2018 by the Company and YTSeuropaconsultants, of which Mr de Silguy is sole shareholder, was terminated by the Board when it was informed in July 2018 that the Twelfth Resolution submitted for the approval of the Shareholders’ General Meeting of 17 April 2018 did not receive a majority vote due to an error on the part of a banking establishment during the voting procedure.