Annual Report 2017

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Rothschild & Co | Annual Report 2017 73
1. Overview
4. Financial statements
3.
Management report
2. Business review
The Supervisory Board’s report on corporate governance is drawn up
in accordance with Article L. 226-10-1 of the French Commercial Code.
Its purpose is to provide a presentation of Rothschild & Co’s corporate
governance. The present report for the 2017 financial year was approved
by the Supervisory Board at its meeting on 13 March 2018.
1 Corporate governance structure
As a result of the legal form of the Company, its corporate governance
structure is based on the Managing Partner and the Supervisory Board.
The corporate governance code referred to by the Company on a
voluntary basis in this report is the Corporate Governance Code for Listed
Companies (revised in November 2016) published by the French employers’
organisation Association Française des Entreprises Privées (Afep) and
Mouvement des Entreprises de France (Medef) (the “Afep-Medef Code”).
The Afep-Medef Code can be viewed on the Afep website
and the Medef website . In circumstances where
Rothschild & Co does not comply – or does not comply in full – with certain
recommendations of the Afep-Medef Code, the reasons are set out in the
table on page 90 of this report.
1.1 The Managing Partner,
Rothschild & Co Gestion SAS
1.1.1 Role and duties
Rothschild & Co Gestion SAS, the sole Company’s Managing Partner
(Gérant) and legal representative of Rothschild & Co, was appointed by
Rothschild & Co’s articles of association, as the first statutory Managing
Partner, for the duration of the Company. Rothschild & Co Gestion SAS,
as Managing Partner of Rothschild & Co, is responsible for the overall
management of Rothschild & Co, the Group’s lead holding company.
The Company’s Managing Partner has full power to act in all circumstances
in the Company’s name and on its behalf, in order to, among other things:
• ensure the effective determination of the direction of the business of
the Company and the entities within the Group on a consolidated basis;
• supervise the accounting and financial information and direct the
internal control of the Company and the entities within the Group
on a consolidated basis;
• determine the regulatory capital of the Company and the entities
within the Group on a consolidated basis;
• approve the annual, consolidated and half-yearly accounts of
the Company;
• determine the agenda and prepare the draft resolutions of the
shareholders’ General Meetings of the Company;
• convene the shareholders’ General Meetings of the Company; and
• prepare those reports and decisions established in its capacity as the
Managing Partner of the Company.
As at 31 December 2017 and at the date of present report, Mr. David de
Rothschild is the Chairman of the Company’s Managing Partner. Subject
to the powers granted by Rothschild & Co Gestion SAS’s shareholders, the
Chairman is vested with the broadest powers to act in the name and on
behalf of Rothschild & Co Gestion SAS, acting itself as the Company’s
Managing Partner, in any circumstances.
The list of positions held by Mr. David de Rothschild is presented on page 74.
In addition, Messrs. David de Rothschild and Olivier Pécoux perform the
functions referred to in Article L. 511-13 of the French Monetary and
Financial Code (Code monétaire et financier) in the context of the Company
as a financial holding company supervised on a consolidated basis by the
French Prudential Control Authority (Autorité de contrôle prudentiel et
de résolution).
1.1.2 The Management Board of
Rothschild & Co Gestion SAS
The decision-making process of the Managing Partner relies on its
Management Board (conseil de gérance), a collective body which aims
to assist the Chairman of the Company’s Managing Partner to fulfil the
commitments of Rothschild & Co Gestion SAS acting in its capacity as
the Managing Partner of Rothschild & Co. The Management Board is
consultative, with the final decisions resting with its Chairman.
The Management Board meets on a quarterly basis, ahead of the meetings of
the Supervisory Board and the Supervisory Board’s specialised committees,
in particular so as to enable an adequate preparation and review ahead of
reports to the Supervisory Board and its committees. In addition to those
quarterly meetings, in order to maintain the proper and consistent functioning
of the Group’s management and supervision and to streamline the process
of information to the Management Board, the Management Board meets
monthly or more frequently if so required by the Chairman.
During the 2016/2017 financial year, the governance arrangements
surrounding the functioning and composition of the Management Board
evolved as follows:
• Mr. Alexandre de Rothschild has been appointed as Executive Deputy
Chairman of the Managing Partner;
• the composition of the Management Board has been reinforced, in the
spirit of an executive board (directoire) of a public limited company
with executive and supervisory boards ( société anonyme à directoire et
conseil de surveillance): joining the Management Board alongside the
Chairman, the Executive Deputy Chairman, Messrs. Nigel Higgins and
Olivier Pécoux, Marc-Olivier Laurent, the Group Head of Merchant
Banking, and Robert Leitão, the Group Head of Global Advisory; and
• Messrs. Nigel Higgins, Olivier Pécoux, Marc-Olivier Laurent, and Robert
Leitão have each been appointed as Managing Partners of Rothschild &
Co Gestion SAS.
As at 31 December 2017, the Management Board comprised six members:
the Chairman, the Executive Deputy Chairman and the four Managing
Partners.
The Supervisory Board during its meeting on 23 February 2017 considered
upon the recommendation of its Remuneration and Nomination Committee,
that these changes not only enhance the quality and strength of Rothschild
& Co but also reinforce the management and control of the Group for the
benefit of the Supervisory Board and the Company’s shareholders.
Furthermore, Messrs. Nigel Higgins and Olivier Pécoux represent the
Company’s Managing Partner at the Group Executive Committee, the senior
executive committee at Rothschild & Co. They co-chair the Group Executive
Committee and are jointly responsible for the oversight and coordination
of the support functions of the Group. The Group Executive Committee
meets monthly to ensure, among other things, that the Company and the
Company’s Group entities implement effectively the decisions taken by the
Company’s Managing Partner on behalf of the Company.
Corporate governance