16 OUR COMMITMENT TO SOCIAL IMPACT & SUSTAINABILITY CORPORATE GOVERNANCE AND EXECUTIVE COMPENSATION Our Board of Directors (the “Board”) has developed corporate governance practices to help it fulfill its responsibilities to stockholders to provide general direction and oversight of the management of the Company’s business and affairs. Our Board is led by our Executive Chairman, who is a member of the Lauder family. In addition, we have an independent director who serves as our Presiding Director. A majority of the directors on our Board are independent. As of the end of fiscal 2021, there were 16 directors on our Board, comprising: (i) our CEO; (ii) 11 nonemployee directors (10 of them independent); and (iii) four directors who are members of the Lauder family, including our Executive Chairman. The Board has established the following standing Board committees: the Nominating and ESG Committee; the Compensation Committee, which includes the Stock Plan Subcommittee; and the Audit Committee. For more information about our Board and committees, please visit the Governance section on our website. Our Nominating and ESG Committee has oversight responsibility for our company’s environmental, social, and governance activities and practices, including citizenship and sustainability matters. The SVP GCCS attends meetings of the Nominating and ESG Committee and provides updates on topics such as climate, progress toward goals, and other related matters, as appropriate. In addition, the SVP GCCS periodically presents at Board meetings. Our Compensation Committee establishes and approves compensation plans and arrangements with respect to the Company’s executive officers and administers the Company’s executive annual incentive plan. The Stock Plan Subcommittee has authority over decisions regarding awards to executive officers under the Company’s share incentive plan. Our compensation program is designed to attract and retain world-class talent and to motivate achievement of both our long-term and short-term goals. We believe that the design and governance of our compensation program supports the business strategy and the overall goal to continue sustainable growth of net sales, profitability, and return on invested capital on a long-term basis. Given our history, ownership structure, and strategy, we follow principles of long-term stewardship and patient capital, and our compensation approach reflects and supports this approach. Consistent with our culture and our compensation philosophy and objectives, our combination of compensation elements is intended to help drive and promote strong, balanced, and sustainable corporate performance. We evaluate the performance of our employees, including our executives, under social impact and sustainability goals holistically, within the framework of our corporate strategy, as an input into compensation decisions. In particular, we incorporate specific goals tied to the Company’s broader social impact and sustainability strategy into the business goals for top executives, and compensation decisions are made based on their achievement. For example, such business goals were included in the fiscal 2021 Executive Annual Incentive Plan program and were used as an input into determining fiscal 2021 equity grants. The fiscal 2021 business goals for top executives encompassed multiple strategic focus areas concerning social impact and sustainability matters. Specifically, the fiscal 2021 business goals for certain executives incorporate ID&E matters; global talent development and retention; and progress in connection with Company sustainability objectives. Additional information on our governance practices and information about executive compensation matters can be found in our 2021 Proxy Statement. Our offices in Tokyo, Japan