_82 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 3 CORPORATE GOVERNANCE REPORT Administrative, management and supervisory bodies The recommendation provided under Article 1.9 of the AFEP/ MEDEF Code, according to which material transactions outside the scope of the firm's stated strategy should be subject to prior approval by the Board of Directors, has to be adapted because of the Company's legal form as a partnership limited by shares(1). With this type of partnership, the Managing General Partners have unlimited personal liability. There is also a total separation of powers between Managers, whether or not they are General Partners. Their powers are completely separate from those of the Supervisory Board. There is also a total separation of powers between Managers, whether or not they are General Partners, and the Supervisory Board, with the result that the Supervisory Board has no legal authority to become involved in managing the Company. However, to (i) ensure that the Supervisory Board exercises effective oversight of the Company's management and (ii) adhere to the spirit of the AFEP/MEDEF recommendation, since 2011 the Company has amended its Bylaws, as well as the Supervisory Board's internal rules(2). The internal rules state that the Supervisory Board is responsible for examining investment and external growth transactions, off‑balance sheet commitments and asset disposals, and is required to issue a formal opinion in cases where the transactions are material for the Group due to their nature or associated risks. For this purpose, “material” means transactions representing at least €100 million, or at least €50 million in the case of external growth transactions. This means that the Supervisory Board is automatically consulted about all projects that are material for the Group. Moreover, as it expresses an opinion on such projects, it is clearly able to report to shareholders thereon if appropriate. (1) This exception to the full application of the AFEP/MEDEF Code’s recommendations is mentioned in the table in section 3.2.8 prepared in accordance with the “comply or explain” rule. (2) Available from the Group's website www.michelin.com. Supervisory Board reviews all M&A strategic projects above €50 m and issues a formal opinion Every quarter The Supervisory Board reviews the deal flows Ad hoc Supervisory Board meetings on strategic M&A project key milestones Managers report to the Supervisory Board on acquisitions carried out over the last four years. Every acquisition is assessed based on the following criteria: Every six months Ad hoc Strategic fit Target results Quality of management Synergies
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