Year end: Aug 2017
Assessment date: Apr 2018

Richemont’s highest vulnerability is the effectiveness of its board and its treatment of minority shareholders, given the dominance of its major shareholder. This remains a concern, with reporting giving the appearance of being run by a large, old boys’ club board, and a chairman prone to making idiosyncratic observations on society, such as the threat of the wealth gap, or his annoyance with the King Code.

In contrast with Richemont’s Annual report – a strange mixture of product brochure and annual accounts, disclosing little relating to significant business externalities – its Corporate Social Responsibility Report is detailed and insightful. Richemont clearly understands the importance of human rights and labour standards in the supply chain, as well as authentic sourcing of materials on the sustainability of its business.

The report cites codes of conduct and provides in-depth narrative and commitment to industry standards, such as the Responsible Jewellery Council (RJC). While key performance measures are poorly developed, casting doubt as to the strength of the industry’s watchdogs, reporting on progress is candid and transparent within reasonable limitations.

Richemont appears to have developed deep relationships with industry authorities, placing it in a strong position to control potential threats to its brand goodwill and market sustainability.

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