Pursuant to the Law of July 3, 2008, the Board of Directors, at its meeting on December 18, 2008, studied the provisions of the AFEP- MEDEF Code and decided that the Company shall refer to this Code of governance.

The Board of Directors is chaired by Franck Riboud, who also has the function of Chief Executive Officer. The Board is composed of 14 members, of which 8 are independent.

The positions and responsabilities of the Directors are available in the following section:-
Board of Directors

The remuneration of Danone's executive officers related press releases, are available below:

• Extracts of the minutes of the meeting of the board of directors of Danone held on 13 february 2008 relating to the payment of an indemnity to each of the four company officers in certain cases of termination of their respective terms of corporate office (published in conformity with the decree of 7 may 2008 and article l. 225-42-1 of the French Code of Commerce)

- Remuneration of Danone's executive officers

2009

• Remuneration of Danone's executive officers in 2009
• 2009 grants to Danone’s corporate officers

2010

• Remuneration of Danone's executive officers in 2010
• 2010 grants to Danone’s corporate officers

- Regulated commitments

Published in conformity with Article R 225-34-1 of the French Code of Commerce

• Regulated commitments with regard to Messrs. Riboud, Vincent, Faber and Hours – Board of Directors of February 13th 2008

• Regulated commitments with regard to Mr Riboud - Board of Directors of February 13th 2010
• Regulated commitments with regard to Mr Faber - Board of Directors of February 13th 2010
• Regulated commitments with regard to Mr Hours - Board of Directors of February 13th 2010

Danone's Board of Directors also includes an Audit Committee, a Social Responsibility Committee composed of independent directors and a Nomination and Compensation Committee, in which two of the three members are independent.
Below is a summary of our committee structure and membership information. To read more about any of the committees, click on committee names in the chart below.

Under the authority of the management, the Executive Committee meets once a month. It ensures the operational direction of the Company, implements the strategy defined by the Board of Directors, checks the coherence of the actions taken by the operational business lines and business units, decides on the action plans and agrees on the budget.

The biographies of the Executive Committee members are available in the following section:
Executive Committee

The Company is in compliance with the corporate governance regime in force in France pursuant to the conditions set forth in chapters 14, 15 and 16 of the Registration Document 2008.

Pursuant to the Law of July 3, 2008, the Board of Directors, at its meeting on December 18, 2008, studied the provisions of the AFEP- MEDEF Code and decided that Danone shall refer to this Code of governance (as published in a press release issued on 19 December, 2008). This code is available on the MEDEF’s website (www.medef.fr).

Objectives of internal control and used framework

Danone uses an internal framework largely inspired by the COSO framework (Committee of Sponsoring Organizations) and by the framework proposed by the French Authority of Financial Markets.

The internal audit procedure is a process put in place by the General Management, the supervisory staff and employees of Danone and is designed to provide reasonable assurance that the following principal objectives are being met:

• the accuracy of financial information;
• compliance with applicable laws and regulations;
• to a lesser extent, the efficiency of operations.

The actors of internal control

The Board of Directors and the Audit Committee ensure that the Company adheres to the internal audit policy. In doing so, they rely on both the operational and functional hierarchies (business lines, geographic areas and subsidiaries) and, in particular, the Internal Audit and the Risk Management departments.

Reporting to the Chief Financial Officer, the Intern Control department is made up of a central team of five people, supported by local internal controllers who report to the Financial Directors of the subsidiaries. They all ensure that the subsidiaries correctly apply the procedures defined by Danone. Specifically, the Internal Audit Department establishes the Company’s internal control referential, defines the methods used to document the procedures, conducts analysis and implements action plans.
Reporting to one of the Company’s Deputy General Management Departments, the Risk Management Department regroups the Internal Audit Department and the Risk Department.The Internal Audit Department, which uses the specialized teams of many large, international audit firms, of which KPMG in particular, regularly conducts audits in the operating units as well as audits related to cross-business lines and cross-business issues. This central structure is supported by internal auditors in certain important subsidiaries or in the pooled service departments as well as by other central services (Quality, Safety, IT, Administration, etc.).

The scope of Internal Control

The internal control process is implemented in the subsidiaries in which the Company has a controlling interest. The Internal Control Department and the Risk Management Department have progressively integrated Numico and its subsidiaries in the Company’s mechanisms for managing internal control risks, in accordance with the integration plan established following the acquisition of Numico at the end of 2007.

The process of Internal Control

At Danone, Internal Control is closely integrated in Corporate initiatives and in various operational tools of the business units.

So, General Enviroment of Internal control is promoted through the deployment of the Group values and through the implementation of Business Conduct Policies. . In 2008, special attention was paid to the subsidiaries of the Baby Nutrition and Medical Nutrition divisions (previously subsidiaries of Numico). For example, a specific message was sent to Managers about Danone’s Principles for Conducting Business.

The Company also implemented a process of risk identification and ensured that apropriate action plans are in place to limit occurrence and operational and financial impact. Main risks are described in the chapter 4 risk Factors of the Registration Document 2008.

Moreover, a set of procedures and best practices is used in the in the Business Units. Their application contributes both to the improvement of the operational performance and to the effectiveness of internal control. Internal controllers in the Business Units report the results of their annual internal control self evaluation to the Company internal control department. Deficiencies are identified and action plans are defined; their correct implementation is reviewed through independent internal audits.
The Company is especially focusing on the Internal Control system related to the elaboration and communication of the financial information. A process for financial planification is implemented: it encompasses a strategic plan, a budget process, full estimate and monthly reforecast of major KPIs, as well as monthly meetings for performance follow-up where general management as well as financial teams are attending. In this context, every operational unit prepares a monthly report and a half year consolidation package used for the preparation of the Company consolidated financial statements.
Once a year, the General Manager and the VP Finance of each operational unit write an attestation letter whereby they confirm that Company procedures are respected in their CBUs and that their consolidation package is reliable.
Control activities are thus performed at every level of the organization and include various actions such as approval and authorisation, verification and reconciliation, evaluation of operational performances, ensurance of asset protection or control of the segregation of duties.
The global efficiency of the Internal Control system is maximized by the culture and organization of the Company that is promoting the circulation of information and the exchange of best practices. Moreover, the documentation and various Intranet sites enable a convivial sharing of information within the Company. This information not only regroups financial information but also non-financial information responding to the needs of various operating and functional departments.

The regular follow up of control procedures is a structural activity of the Company’s Internal Audit department. In 2008, 50 audit engagements were performed in the subsidiaries or in the functional areas, based on a plan aproved by the Audit Committee, of which 17 were conducted for Baby Nutrition and Medical Nutrition entities.