The internal rules of procedure of the Board of Directors determines the principles of its functioning and the terms and conditions according to which the Board and its specialised Committees fulfil their duties. It also defines the role and powers of the Chairman & Chief Executive Officer.
The Board’s internal rules of procedure are regularly updated, particularly to take account of legislative and regulatory changes and changes to the AFEP-MEDEF Code (see section 4.1 “Corporate Governance Code”). It was last updated on 8 October 2019 and particularly reflects certain changes made by law no. 2019-486 of 22 May 2019 on the growth and transformation of businesses (PACTE law).
EDF’s articles of association set the term of office of directors to four years (see section 4.2.1 “Members of the Board of Directors”).
In accordance with the provisions of Article 2 of decree no. 2014-949 of 20 August 2014 regarding the implementation of the order of 20 August 2014, the Representative of the French State is appointed for a term equal to the term of office of the members of the Board of Directors, i.e. for a four-year term.
The Shareholders’ Meeting of 15 May 2018 modified Article 13 of EDF’s articles of association in order to provide that, starting from the 2019 Shareholders’ Meeting, the Board of Directors, excluding Directors elected by the employees and the Representative of the French State appointed by decree, be renewed by rotation periodically in such a way that half (rounded to the nearest whole number) of the Directors elected by the Shareholders’ Meeting be renewed every two years and that the Board be completely renewed, with respect to the members concerned, at the end of each four-year period. In accordance with these provisions of the articles of association, the Shareholders’ Meeting of 16 May 2019 deliberated on the appointment and re-election of Directors and appointed certain Directors for terms of office of two years and others for terms of office of four years, in order to enable the implementation of the staggered re-election of the Board.
The Directors appointed by the Ordinary Shareholders’ Meeting can be dismissed at any time by the Shareholders’ Meeting. In accordance with Article 12 of the Law on the Democratisation of the Public Sector, the Directors elected by the employees can be individually dismissed for gross negligence in the exercise of their duties by order of the President of the Tribunal de Grande Instance (regional court) delivered at summary proceedings upon request from the majority of the members of the Board. However, in the event that serious dissent disrupts the Company’s administration, dismissal pronounced by the Shareholders’ Meeting can be extended to employee representatives. The Representative of the French State ceases their duties by resigning or if they lose the capacity by virtue of which they were appointed; they can be replaced at any time for the remainder of the term of office.
In accordance with the option provided for in Article 18 of the Order of 20 August 2014, EDF’s articles of association state that the Chairman of the Board of Directors is the Executive Manager of the Company and holds the title of Chairman & Chief Executive Officer. The “non-separated” Executive Management structure is therefore set out in the Company’s articles of association. The Board’s internal rules of procedure, and in particular the limitations it applies to the powers of the Chief Executive Officer, ensure a satisfactory balance, in the Company’s interest, between the Chairman & Chief Executive Officer and the Board of Directors, whilst preserving the flexibility, effectiveness and responsiveness necessary in the administration and management of the Company.
EDF’s Chairman & Chief Executive Officer is appointed by decree of the President of the Republic of France, on recommendation from the Board of Directors. They can be dismissed by decree in accordance with Article 20 of the Order of 20 August 2014. In accordance with the provisions of Article 13 of the French Constitution, the Chairman is appointed based on the opinion of the Permanent Committees of the French National Assembly and Senate. At the end of this process, Jean-Bernard Lévy was re-elected as EDF’s Chairman and CEO by decree of 22 May 2019.
In case of vacation of the office of Chairman & Chief Executive Officer, Article 21 of the order of 20 August 2014 states that the French State can appoint someone to the role temporarily until the appointment of the new Chairman and CEO. In accordance with this text, Jean-Bernard Lévy was appointed, by ministerial decision of 16 May 2019, temporary Chairman & Chief Executive Officer of the Company from 16 May 2019 until 22 May 2019.
Subject to the specific legal provisions governing public sector companies and the powers specifically reserved by law or by the articles of association to the Board of Directors or to Shareholders’ Meetings, and the limits to the powers of the Chairman & Chief Executive Officer provided for by the internal rules of procedure of the Board of Directors as internal rules (see section 4.2.2.3 “Powers and duties of the Board of Directors” below), the Chairman & Chief Executive Officer is vested with the most extensive powers to act on behalf of the Company under all circumstances, within the limits of the corporate purpose. The Chairman & Chief Executive Officer organises and supervises the work of the Board of Directors and reports to the Shareholders’ Meeting. They oversee the proper running of the Company’s bodies and, in particular, ensure that the Directors are in a position to fulfil their duties.
The Board of Directors meets as often as the interest of the Company requires, in accordance with applicable legislative and regulatory provisions. In accordance with the Board’s internal rules of procedure, the Directors meet once a year to discuss the strategy of the Company and of the Group as part of an ad hoc seminar. Moreover, under the internal rules of the Board of Directors, a meeting is to be held each year without the attendance of the Chairman & Chief Executive Officer (executive session), and shall be chaired by the Chair of the Appointments, Remuneration & Governance Committee.
The Board of Directors determines the orientations of the Company’s activities and oversees their implementation, acting in its corporate interest, while taking into consideration the social and environmental issues of its activities. It defines the major strategic, economic, financial and technological orientations for the Company and the Group. Subject to powers expressly attributed to the Shareholders’ Meetings and within the limits the Company’s corporate purpose, the Board may deal with any issues concerning the proper running of the Company and acts, through its deliberations, on any such issue.
The Board deliberates, after examination by the competent Committee or Committees, as the case may be, on the annual budget, the medium-term plan, any significant operation falling outside the Company’s announced strategy, the corporate strategic plan presenting the actions to be implemented by the Company or the Group in order to comply with the objectives of the multi-year energy plan (Programmation pluriannuelle de l'énergie) (see section 1.5.1.2 “Public service in France”), the Group’s strategies relating to nuclear fuel cycle, gas and renewable energies and the public service contract. It also regularly examines, in connection with the strategy that it defines, opportunities and risks such as financial, legal, operational, social and environmental risks, as well as the measures taken as a consequence. Within this framework, it particularly examines risks and opportunities relating to climate change and their impact on the Group’s strategy and its activities.
The Board ensures the implementation by the Company of a programme to prevent and detect corruption and influence-peddling and a policy to promote non-discrimination and diversity, particularly in terms of balanced representation of women and men on the Company’s governing bodies. In accordance with the provisions of Article L. 225-37-1 of the French Commercial Code (Code de commerce), the Board of Directors deliberates annually on the Company’s policy in terms of equal access to employment and equal pay and defines the Company’s strategic orientations submitted to the EDF Central Social & Economic Council in accordance with Article L. 2312-17 of the French Labour Code.
In accordance with its internal rules of procedure, the Board of Directors is competent to authorise, in accordance, where appropriate, with the governance of the Group’s listed companies, the following transactions prior to their implementation:
