Organisation of VINCI’s corporate governance
At its meeting of 5 February 2019, the Board discussed VINCI’s governance structure, as it does each year, and confirmed that the system in which the roles of Chairman of the Board and Chief Executive Officer are combined, with Xavier Huillard serving in both of these -positions, remains the one best suited to the Company’s situation and interests.
The Board regularly assesses the relevance of this system, in full knowledge of the opinions expressed by some of the Group’s stakeholders, and in light of the Group’s circumstances, development and human capital.
The Board reached its decision in 2019 on the basis of the considerations presented below:
- The VINCI Group’s business activities involve a large number of contracts (in the hundreds of thousands), all relating to unique infrastructure assets, and they therefore do not lend themselves to standardisation. In order to ensure that business is conducted in an optimal manner, there must be considerable delegation of responsibility, since operational decisions must be made at the level closest to those affected by them. This explains the very decentralised organisation, which enables the Group’s operating units to respond to customers’ requirements in a swift and agile manner, and concurrently enables a large number of managers to gain self-reliance and responsibility.
- VINCI’s business lines and the principles underlying its organisation closely interrelate strategy and operations. Each entity in each business line develops its own strategy in accordance with the Group’s strategy and in full compliance with the internal control system. That is why practically all business lines and entities have unified governance, resembling the Group’s governance.
- Many of the Group’s customers in the Contracting business and all its contracting authorities in the Concessions business are central or local government entities, who expect to have access to a sole point of contact to discuss and negotiate short-term operational matters as well as long-term strategic concerns. These public sector entities also attach great importance to the title of chairman, as they equate it to the individual making the final decisions.
The Board defines the Group’s strategy: it directs each division’s expansion strategy, in particular on international markets, retains decisionmaking authority whenever the implementation of a strategy entails investments and commitments exceeding a certain threshold, and it reviews diversification opportunities.
This organisational approach, which has more than proven itself, requires a deep understanding of the Group and its business lines by the Chairman and Chief Executive Officer, and the strong commitment of managers to a shared culture set in motion by the Group’s Executive Management. This culture’s components are naturally reviewed and adapted under the Board’s supervision.
The current system is considered as efficient by the Directors, who find the information to which they have access as well as the existing checks and balances not only satisfactory but key to ensuring that the Board completely fulfils its role.
The division of responsibilities between the Company’s governance bodies, as set forth in the Board’s internal rules, is as follows:
|Board of directors||Chairman and Chief Executive Officer|
|- Appointment or renewal of the terms of office of the Chairman and Chief Executive Officer, the Vice-Chairman and the Lead Director
- Prior approval of strategic choices
- Prior approval of strategic investments and material transactions relating to exposures in amounts greater than €200 million
- 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 Board
- Implementation of decisions taken
- Operational management of the Group
|- - Chairmanship of the Strategy and CSR Committee (investments in excess of €50 million)
- Representation at the request of the Chairman and Chief Executive Officer
- Insight provided to the Board on the Group’s operations
- Working relationship with the Group’s main managers
- Participation in meetings with shareholders or proxy advisers at the request of the Chairman and Chief Executive Officer
|- Chairmanship of the Appointments and Corporate Governance Committee
- Conflicts of interest
- Point of contact for Board members, shareholders and proxy advisers at the request of the Chairman and Chief Executive Officer
- Meetings of the Board in the absence of the executive company officers
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 reappointed him to these positions at its meeting of 17 April 2018, held immediately following the Shareholders’ General Meeting that renewed his term of office as Director. He has the duties and responsibilities conferred by law.
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. He 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 the Executive Committee comprising the Group’s main operational and functional executives, which had 13 members at 5 February 2019.
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. The Executive Committee met 19 times in 2018.
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 5 February 2019. 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 four times in 2018.
On 1 November 2018, the Board reappointed Yves-Thibault de Silguy as Vice-Chairman. In this position, he has the duties and responsibilities laid down in the Board’s internal rules, as summarised below:
- Providing support to the Chairman, particularly with respect to representation, whenever necessary
- Providing insight to the Board on the Group’s organisation, its principal executives and its activities
- Taking part in meetings with shareholders or proxy advisers as often as necessary
The Vice-Chairman chairs the Strategy and CSR Committee.
Until 1 November 2018, Mr de Silguy served as Vice-Chairman and Lead Director.
Furthermore, at various times in 2018, Mr de Silguy was called on to provide support services under an agreement signed on 5 February 2014 between the Company and YTSeuropaconsultants, of which Mr de Silguy is sole shareholder. This agreement remained in force until the Shareholders’ General Meeting of 17 April 2018. At this Meeting, shareholders were asked to approve a new agreement, which had been signed on 7 February 2018 and included approval by the Shareholders’ General Meeting of 17 April 2018 as the condition precedent for its entry into force. The corresponding resolution was adopted at the meeting, but it was brought to the Company’s attention in July 2018 that, due to an error made by BNP Paribas Securities Services in determining the exercisable voting rights, the resolution had not in fact obtained the majority required for its adoption. For this reason, the Board was required to declare this agreement as null and void retroactively to 17 April 2018.
This situation required Mr de Silguy to return the amounts he had received under the new agreement, which is no longer considered as valid.
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, held by Mr de Silguy since its creation in 2010, has been filled by Yannick Assouad, an independent Director, since 1 November 2018.
The duties and responsibilities of the Lead Director, which are laid down in the Board’s internal rules, are summarised below:
- Managing conflicts of interest
- Serving as the point of contact for Board members and shareholders regarding governance questions
- Communicating with institutional investors and proxy advisers at the request of the Chairman
- Convening the Board once a year in the absence of the executive company officers to evaluate their performance and assess the -effectiveness of governance
The Lead Director chairs the Appointments and Corporate Governance Committee. He or she may request the addition of any item to the agenda of a Board meeting or ask the Chairman to call a meeting of the Board.