CORPORATE GOVERNANCE parent company or of any company consolidated not satisfy the criteria detailed above is nonetheless by the parent company; independent. •Not be an executive corporate officer of a company Qualification procedure for independent members in which the Company holds a directorship The Nomination Committee reviews the designation (whether directly or indirectly) or in which an of independent members each year and draws up a employee appointed as a director or an executive report to the Board of Directors on the matter. Each corporate officer of the Company (currently or year, in light of this report, the Board of Directors over the past five years) hold as directorship; reviews the situation of each director with respect to •Not be a client, supplier, investment banker, finance independence criteria. banker: The Board of Directors submits the findings of its – Of significant importance to the Company or its review to the shareholders in the annual report. Group; The findings of the report of the Board of Directors – Or for whom the Company or its Group presents are mentioned in paragraph below. a substantial part of its business. For the purpose of the analysis of this criterion, the As of December 31, 2017 and in accordance with the Board of Directors analyses: guidelines of the Afep-Medef Code in connection 3 – The weight of the supplier in the total expenses of with the percentage of independent members the Group/the weight of the client in to the total within boards of directors and committees, and in sales of the Group, or the fact that the Company particular guideline 8.3, which provides that the or its Group presents a substantial part of the directors who represent employees shal l not be business of the supplier/of the client; and accounted for when determining the percentage of independent directors within the Board of Directors: – The appraisal of exclusive relationships; 8 members out of 10 (excluding the director • •Not have any close family ties with a corporate officer; representing employees) of the Board of Directors Not have been a statutory auditor of the business were considered as independent: Thomas Farrell, • Fritz Froehlich, François Henrot, Ian Meakins, Elen in the past five years; Phillips, Maria Richter, Agnès Touraine and Herna •Not be a director of the business for more Verhagen, i.e., an independence rate of 80%; than twelve years. The loss of the capacity of •5 members out of 5 of the Audit and Risk independent director occurs after twelve years. Committee were considered as independent: Furthermore, a non-executive corporate officer Thomas Farrell, Fritz Froehlich, Ian Meakins, Elen cannot be considered as independent if he or she Phil lips and Maria Richter, i.e., an independence receives variable compensation in cash or shares or rate of 100%; any compensation related to the performance of the •5 members out of 6 of the Nomination Committee company or the Group. were considered as independent: Thomas Farrell, François Henrot, Ian Meakins, Elen Phil lips and Directors representing significant shareholders of Herna Verhagen, i.e., an independence rate of the Company or of its parent company may be 83%; and considered as independent provided that such 4 members out of 5 (excluding the director shareholders do not participate in the control of the • Company. Nevertheless, beyond a threshold of 10% representing employees) of the Compensation of share capital or voting rights held, the Board, upon Committee were considered as independent: report on the Nomination Committee, systematically François Henrot, Ian Meakins, Maria Richter and questions the capacity of independent director Agnès Touraine, i.e., an independence rate of 80%. by considering the shareholding structure of the The Board of Directors of February 13, 2018 reviewed, Company and the existence of potential conflicts of upon the report drawn up by the Nomination interest. Committee, the status of each Director (except for The Board of Directors may find that even where the Director representing the employees) according a director satisfies the independence criteria to the independence critera establ ished by the defined by the recommendations of the Afep and Afep-Medef Code. of the Medef, that director may not be qualified as In particular, the status of François Henrot, and independent owing to his/her individual situation or especial ly, whether or not the existing business to the situation of Rexel, in light of its shareholder relationship between Rexel and the Rothschild group base or for any other reason. Conversely, the Board are significant, has been analyzed. Fol lowing this of Directors may consider that a director who does analysis, the Nomination Committee has concluded REXEL 2017 – REGISTRATION DOCUMENT 71