SOCIETE GENERALE: APPROACH TO SUSTAINABILITY M A R C H 2 0 1 8
CONTENTS INTRODUCTION – GROUP OVERVIEW 1. GOVERNANCE 2. REMUNERATION 3. CULTURE & CONDUCT 4. CYBER SECURITY 5. CSR VISION 6. CSR EXTRACTS FROM INVESTOR DAY APPROACH TO SUSTAINABILITY MARCH 2018
INTRODUCTION - GROUP OVERVIEW A EUROPEAN LEADER CONNECTING EUROPE TO THE REST OF THE WORLD RUSSIA AMERICAS 3% 7% CEE 10% WESTERN EUROPE ASIA - OCEANIA 69% 6% AFRICA 5% % % of 2016 Group revenues APPROACH TO SUSTAINABILITY MARCH 2018
INTRODUCTION - GROUP OVERVIEW LEADING FRANCHISES ACROSS THE BOARD CORPORATE CLIENTS FRENCH CORE GEOGRAPHIES FINANCIAL SERVICES AND FINANCIAL MARKET IN CEEMEA INSTITUTIONS N°3 Retail Bank N°2 in Romania N°1 Global Markets Fleet Management World leader in in Europe and Derivatives N°3 Private Bank N°3 in Czech Republic Top 3 globally Financing & Advisory N°1 Online Bank Leader in N°2 N°2 foreign bank Structured Finance Equipment Finance in Russia globally Asset Management Lyxor N°2 ETFs Leading international in Europe bank in Africa APPROACH TO SUSTAINABILITY MARCH 2018
INTRODUCTION - GROUP OVERVIEW A TRANSFORMED GROUP AT THE FOREFRONT OF MARKET TRENDS AND INNOVATION Boursorama: supporting online banking growth MORE RESPONSIBLE MORE FOCUSED Pioneer in Asset Management consolidation Anticipating post trade evolution ALD: at the heart of mobility CSR ambition at the heart of 45 disposals in all businesses trends our strategy since 2014 Firm-wide Culture & Conduct Selected investments in programme sponsored by the CEO growth/synergetic franchises MORE RESILIENT MORE ROBUST Less volatile earnings Strong capital position Negligible prop trading revenues Improved Group risk profile Turnaround in key emerging Enhanced independent control geographies functions APPROACH TO SUSTAINABILITY MARCH 2018
INTRODUCTION - GROUP OVERVIEW OUR LONG-TERM VISION: COMMITTED TO POSITIVE TRANSFORMATIONS OPEN BANKING PLATFORM AND ARCHITECTURE TRUSTED PARTNER A WINNER IN THE RACE FULLY DIGITALISED BANK FOR LEADERSHIP IN EUROPE FOR A BETTER CUSTOMER EXPERIENCE DELIVER SUPERIOR, PROFITABLE AND SUSTAINABLE GROWTH APPROACH TO SUSTAINABILITY MARCH 2018
1 GOVERNANCE
1 – GOVERNANCE SNAPSHOT OF SG BOARD Board Chairman Separation of Chairman and CEO roles since May 2015 Independence 14 Directors; 91.6% independent (excluding 2 staff-elected) Gender: 50% women; Diversity Nationality: 36% non-French (US/ British, Italian, Spanish, Dutch) Competence Broad range of skills: Risk, Control, Finance, IT, Digital, Management, Regulation, International, Client Services, Legal, Industry... (see slide 11) Length of term: 4 years; Average tenure: 5.8 years Tenure Cap on the number of directorships: Overboarding - 1 executive and 2 non-executive; or - 4 non-executive Attendance Attendance in 2017: 94% Training Wide and regular training programme. On-site visits: cyber security... Board evaluation External 360° assessment every 3 years MARCH 2018 8 APPROACH TO SUSTAINABILITY
1 – GOVERNANCE DIRECTOR COMPETENCIES AND EXPERIENCE (1/3) Appointment of 2 new Directors at 2018 AGM to replace Mr. Castaigne who finishes his third term and another who is leaving for personal reasons. MARCH 2018 9 APPROACH TO SUSTAINABILITY
1 – GOVERNANCE DIRECTOR COMPETENCIES AND EXPERIENCE (2/3) MARCH 2018 10 APPROACH TO SUSTAINABILITY
1 – GOVERNANCE DIRECTOR COMPETENCIES AND EXPERIENCE (3/3) MARCH 2018 11 APPROACH TO SUSTAINABILITY
1 – GOVERNANCE DIVERSITY AT SOCIETE GENERALE…. Gender Nationality Background 36% 26% 26% NON- 14 members FRENCH 50% 50% Board 64% MALE FEMALE FRENCH 11% 21% 17% Incl employee representatives 25% 25% 25% NON- FINANCE RETAIL FRENCH General 4 members 100% MALE 25% 25% Management 75%- TECHNO- FRENCH BANKING LOGY 25% 21% NON- FEMALE FRENCH Management No.14 63 members 75% Committee FRENCH Gender Equality 79% MALE Equileap 2017 Global Ranking/ No. 1 MANAGERS: French Bank 44% 58% All * 42% 145,700 NON- FEMALE FRENCH FRENCH Staff 56% * Equileap, an NGO, researched MALE and scored 3 000 public companies from 23 countries using 19 criteria All Staff: 59% female 138 nationalities MARCH 2018 12 APPROACH TO SUSTAINABILITY
1 – GOVERNANCE …POSITIVELY POSITIONED VS PEERS ON DIVERSITY Gender French Banks European Banks SG 33% 66% 45% 55% 50% 50% Male FEMALE MALE FEMALE MALE Board FEMALE MALE 74% 13% 14% 21% FEMALE General FEMALE FEMALE Management/ 87% 86% 79% Executive MALE MALE MALE Nationality 17% 27% 36% NON- NON- NON- DOMESTIC DOMESTIC 73% DOMESTIC Board 86% 64% DOMESTIC DOMESTIC DOMESTIC 14% 25% 35% NON- General NON- NON- DOMESTIC DOMESTIC DOMESTIC Management/ 65% 86% 75% Executive DOMESTIC DOMESTIC DOMESTIC Source : Annual reports / Corporate websites / like-for-like comparisons taken where possible French Banks : SG, Credit Agricole, BNP, Natixis MARCH 2018 13 APPROACH TO SUSTAINABILITY European Banks: Unicredit, Deutsche Bank, ING, Barclays, Santander, Crédit Suisse, HSBC, SG, Crédit Agricole, BNP, Natixis
1 – GOVERNANCE BOARD COMMITTEES 4 independent directors 5 independent directors Preparation of Group accounts, management Review of the risk panorama & mapping; risk limits; of relations with statutory auditors and Group liquidity; stress tests; reputation dashboard; approval of audit plan. compliance dashboard. Review of compliance organisation; In 2016/17 it increased time allocated to IT anti-money laundering; resolution & security, systems and cyber security and from recovery plans; regulatory compliance; 2018 a conduct dashboard will be reviewed and specific business reviews. twice-yearly. AUDIT AND 2017: met 11x; attendance rate 93% 2017: met 11x; attendance rate 96% INTERNAL RISK CONTROL NOMINATION & COMPENSATION CORPORATE 4 directors (3 independent) 4 independent directors GOVERNANCE Monitors long-term and deferred Prepares the appointment of new directors remuneration; Chairman’s remuneration; and and succession of CEO; prepares ensures remuneration policies are in line with resolutions for General Meeting; examines regulations, internal risk control policy, gender Internal Rules of the Board; prepares equality and (from 2018) that extra-financial criteria annual internal evaluation of Board. are considered in the variable remuneration of the 2017: met 7x; attendance rate 86% Management Committee. 2017: met 7x; attendance rate 96% Public activity reports for all Committees included in the Registration Document MARCH 2018 14 APPROACH TO SUSTAINABILITY
1 – GOVERNANCE ROLE OF BOARD The Board of Directors collectively represents all shareholders Solid Governance Remuneration Strategic Direction ■ The Board sets SG’s strategic ■ The Board sets the compensation ■ The Board periodically: direction and ensures its of the CEOs including: - ensures that it is well implementation - both the fixed and variable composed and has sufficient ■ This includes the Group’s parts, ensuring a balance breadth of skills to performs its values and code of conduct between financial and extra- duties and the Group’s social and financial criteria - approves effective risk environmental responsibilities - and long-term incentives to align procedures, a sound internal interests with long-term control system, and efficient shareholder value administrative processes - ensures a well-defined, transparent and coherent sharing of responsibilities APPROACH TO SUSTAINABILITY MARCH 2018 15
1 – GOVERNANCE AN ORGANISATION BASED ON SHARED CULTURE AND GOALS… REINFORCED INTERNAL DEPLOYING CULTURE & MORE AGILE ORGANISATION CONTROL SET UP CONDUCT PROGRAMME ■ New organisation and ■ A set-up based on 3 lines of ■ Company-wide culture & governance based on 17 defense conduct programme Business Units and sponsored by the CEO and ■ Independent control functions 10 Service Units reporting to the Board of reporting to a dedicated deputed Directors ■ Key principles: autonomy, CEO collegiality and cooperation ■ New Code of Conduct ■ Best in class compliance deployed worldwide reinforcing standards commitments towards every stakeholder MORE ALIGNMENT ■ Common leadership model applying to all ■ Variable remuneration of Management Committee staff worldwide based on shared values members significantly indexed on common Group targets (NPS, financial targets, global employee commitment rate and Group CSR rating) APPROACH TO SUSTAINABILITY MARCH 2018 16
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