Insight on Nu Skin social media compliance programme Laurent Servais Regional General Counsel EMEA (a.i.)

TOP ACTIVE SOCIAL MEDIA PLATFORMS

MOST COMMON VIOLATIONS Misleading product claims Some medical claims (fairly limited) Problematic before/after pictures Product testimonials without substantiation

MOST COMMON VIOLATIONS Misleading product claims Some medical claims (fairly limited) Problematic before/after pictures Product testimonials without substantiation Misleading opportunity claims False earnings claims (limited) Misleading lifestyle claims

MOST COMMON VIOLATIONS Misleading product claims Some medical claims (fairly limited) Problematic before/after pictures Product testimonials without substantiation Misleading opportunity claims False earnings claims (limited) Misleading lifestyle claims Infringement of IP rights NS’ TM and logos Third party right of personal portrayal

NOTHING NEW UNDER THE SUN? Many common risks arising out of social media are not necessarily new but are merely the usual risks now exposed through novel channels…

MUCH FASTER, MUCH MORE VISIBLE The broad reach and real-time interaction that makes social media a powerful tool for marketing and advertising can also amplify and accelerate risks…

SPOTLIGHT ON THE UK Booming market 48% distributors in their 20s’ + 570% revenue in ’14; + 165% in ’15; + 65% in ’16 (est.) 48% distributors in their 20s’ 22% of UK DSA direct sellers under 25 Tremendous social media presence Number of compliance cases in the UK + 29% in 2015 + 295% in 2016 (est.) Increased scrutiny by UK authorities (ASA, Trading Standards, etc.)

WHY?? BUT, WHY??

Compliance look on Social Media

Distributor’s look on Social Media

WHY? Exponential growth of the salesforce (distributors) Vast and enthusiastic – but often inexperienced – salesforce Duplication of misleading public content Lack of understanding of the business environment From personal to business use of social media From consumer posts to distributor posts

What does Nu Skin do about it?

What does Nu Skin do about it? Social Media Compliance Programme Policies and Procedures and Social Media Guidelines Ongoing Social Media Training and Risk Awareness Social Media management platform/tool Social Media Monitoring

Key principles applicable to both online and offline communications Cornerstone of our contractual relationship with distributors Detailed rules on general advertising, product claims and income claims Policies Policies and Procedures Social Media Guidelines Product Testimonial Guidelines Opportunity Testimonial Guidelines

Basic do’s and don’ts when using social media Product and earning claims IP rights Proper use of social media per platform Policies Policies and Procedures Social Media Guidelines Product Testimonial Guidelines Opportunity Testimonial Guidelines

Global legal standard for marketing claims Guidance about written product testimonials Guidance about « before and after » photos Examples, examples, examples Policies Policies and Procedures Social Media Guidelines Product Testimonial Guidelines Opportunity Testimonial Guidelines

Guidance about what earning and lifestyle claims are Guidance about specific rules applicable to such claims Do’s and don’ts when making earning and lifestyle claims Examples, examples, examples Policies Policies and Procedures Social Media Guidelines Product Testimonial Guidelines Opportunity Testimonial Guidelines

Training Ensure your own teams do understand the P&P and Guidelines So that everyone speaks with one voice Train distributors on the P&P and Guidelines, again and again Webinars Live sessions Train the trainer Focus on the WHY

Oversight Growing compliance team with dedicated social media compliance representative Joint effort between compliance, sales and marketing Frequent input from other distributors Automated monitoring - fieldwatch Education Warning Calls Sanctions

Conclusion Tremendous sales growth Increased workload for compliance Not any new risk, but faster and more visible Compliance is a joint effort - work closely with sales and marketing to stay abreast of new technologies and developments Strong social media compliance programme is crucial

Thank you for your attention!

Back up slides

POLICIES – key messaging principles

Product testimonials guidelines summary

TYPICAL PRODUCTS SOLD IN THE UK