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Page d’accueil | Inventaire des publications récentes et pertinentes dans le domaine de la gouvernance des entreprises, rédaction de billets sur ces activités, utilisation d’un outil de recherche très performant en fonction de thèmes et de catégories

Un document incontournable en gouvernance des entreprises cotées : « OECD Corporate Governance Factbook 2019 »


Voici un rapport de recherche exhaustif publié tous les deux ans par l’OCDE.

Vous y retrouverez une mine de renseignements susceptibles de répondre à toute question relative à la gouvernance des plus importantes autorités des marchés financiers au monde.

C’est un document essentiel qui permet de comparer et d’évaluer les progrès en gouvernance dans les 49 plus importants marchés financiers.

Vous pouvez télécharger le rapport à la fin du sommaire exécutif publié ici. Le document est illustré par une multitude de tableaux et de figures qui font image il va sans dire.

Voici l’introduction au document de recherche. Celui-ci vient d’être publié. La version française devrait suivre bientôt.

Bonne lecture !

 

The 2019 edition of the OECD Corporate Governance Factbook (the “Factbook”) contains comparative data and information across 49 different jurisdictions including all G20, OECD and Financial Stability Board members. The information is presented and commented in 40 tables and 51 figures covering a broad range of institutional, legal and regulatory provisions. The Factbook provides an important and unique tool for monitoring the implementation of the G20/OECD Principles of Corporate Governance. Issued every two years, it is actively used by governments, regulators and others for information about implementation practices and developments that may influence their effectiveness.

It is divided into five chapters addressing: 1) the corporate and market landscape; 2) the corporate governance framework; 3) the rights of shareholders and key ownership functions; 4) the corporate boards of directors; and 5) mechanisms for flexibility and proportionality in corporate governance.

 

OECD (2019), OECD Corporate Governance Factbook 2019

 

 

Résultats de recherche d'images pour « OECD Corporate Governance Factbook 2019 »

 

The corporate and market landscape

 

Effective design and implementation of corporate governance rules requires a good empirical understanding of the ownership and business landscape to which they will be applied. The first chapter of the Factbook therefore provides an overview of ownership patterns around the world, with respect to both the categories of owners and the degree of concentration of ownership in individual listed companies. Since the G20/OECD Principles also include recommendations with respect to the functioning of stock markets, it also highlights some key structural changes with respect to stock exchanges.

The OECD Equity Market Review of Asia (OECD, 2018a) reported that stock markets have undergone profound changes during the past 20 years. Globally, one of the most important developments has been the rapid growth of Asian stock markets—both in absolute and in relative terms. In 2017, a record number of 1 074 companies listed in Asia, almost twice as many as the annual average for the previous 16 years. Of the five jurisdictions that have had the highest number of non-financial company IPOs in the last decade, three are in Asia. In 2017, Asian non-financial companies accounted for 43% of the global volume of equity raised. The proportion attributable to European and US companies has declined during the same period. In terms of stock exchanges, by total market capitalisation, four Asian exchanges were in the top ten globally (Japan Exchange Group, Shanghai Stock Exchange, Hong Kong Exchanges and Clearing Limited, and Shenzhen Stock Exchange).

With respect to ownership patterns at the company level in the world’s 50 000 listed companies, a recent OECD study (De la Cruz et al., forthcoming) reports a number of features of importance to policymaking and implementation of the G20/OECD Principles. The report, which contains unique information about ownership in companies from 54 jurisdictions that together represent 95% of global market capitalisation, shows that four main categories of investors dominate ownership of today’s publicly listed companies. These are: institutional investors, public sector owners, private corporations, and strategic individual investors. The largest category is institutional investors, holding 41% of global market capitalisation. The second largest category is the public sector, which has significant ownership stakes in 20% of the world’s listed companies and hold shares representing 13% of global market capitalisation. With respect to ownership in individual companies, in half of the world’s publicly listed companies, the three largest shareholders hold more than 50% of the capital, and in three-quarters of the world’s public listed companies, the three largest owners hold more than 30%. This is to a large extent attributable to the growth of stock markets in Asian emerging markets.

Stock exchanges have also undergone important structural changes in recent years, such as mergers and acquisitions and demutualisations. Out of 52 major stock exchanges in 49 jurisdictions, 18 now belong to one of four international groups. Thirty-three (63%) of these exchanges are either self-listed or have an ultimate parent company that is listed on one or more of its own exchanges. More than 62% of market capitalisation is concentrated in the five largest stock exchanges, while more than 95% is concentrated in the largest 25. The top 25 highest valued exchanges include 11 non-OECD jurisdictions.

 

The corporate governance framework

 

An important bedrock for implementing the Principles is the quality of the legal and regulatory framework, which is consistent with the rule of law in supporting effective supervision and enforcement.

Against this background, the Factbook monitors who serves as the lead regulatory institution for corporate governance of listed companies in each jurisdiction, as well as issues related to their independence. Securities regulators, financial regulators or a combination of the two play the key role in 82% of all jurisdictions, while the Central Bank plays the key role in 12%. The issue of the independence of regulators is commonly addressed (among 86% of regulatory institutions) through the creation of a formal governing body such as a board, council or commission, usually appointed to fixed terms ranging from two to eight years. In a majority of cases, independence from the government is also promoted by establishing a separate budget funded by fees assessed on regulated entities or a mix of fees and fines. On the other hand, 25% of the regulatory institutions surveyed are funded by the national budget.

Since 2015 when the G20/OECD Principles were issued, 84% of the 49 surveyed jurisdictions have amended either their company law or securities law, or both. Nearly all jurisdictions also have national codes or principles that complement laws, securities regulation and listing requirements. Nearly half of all jurisdictions have revised their national corporate governance codes in the past two years and 83% of them follow a “comply or explain” compliance practice. A growing percentage of jurisdictions—67%—now issue national reports on company implementation of corporate governance codes, up from 58% in 2015. In 29% of the jurisdictions it is the national authorities that serve as custodians of the national corporate governance code.

 

The rights and equitable treatment of shareholders and key ownership functions

 

The G20/OECD Principles state that the corporate governance framework shall protect and facilitate the exercise of shareholders’ rights and ensure equitable treatment of all shareholders, including minority and foreign shareholders.

Chapter 3 of the Factbook therefore provides detailed information related to rights to obtain information on shareholder meetings, to request meetings and to place items on the agenda, and voting rights. The chapter also provides detailed coverage of frameworks for review of related party transactions, triggers and mechanisms related to corporate takeover bids, and the roles and responsibilities of institutional investors.

All jurisdictions require companies to provide advance notice of general shareholder meetings. A majority establish a minimum notice period of between 15 and 21 days, while another third of the jurisdictions provide for longer notice periods. Nearly two-thirds of jurisdictions require such notices to be sent directly to shareholders, while all but four jurisdictions require multiple methods of notification, which may include use of a stock exchange or regulator’s electronic platform, publication on the company’s web site or in a newspaper.

Approximately 80% of jurisdictions establish deadlines of up to 60 days for convening special meetings at the request of shareholders, subject to specific ownership thresholds. This is an increase from 73% in 2015. Most jurisdictions (61%) set the ownership threshold for requesting a special shareholder meeting at 5%, while another 32% set the threshold at 10%. Compared to the threshold for requesting a shareholder meeting, many jurisdictions set lower thresholds for placing items on the agenda of the general meeting. With respect to the outcome of the shareholder meeting, approximately 80% of jurisdictions require the disclosure of voting decisions on each agenda item, including 59% that require such disclosure immediately or within 5 days.

The G20/OECD Principles state that the optimal capital structure of the company is best decided by the management and the board, subject to approval of the shareholders. This may include the issuing of different classes of shares with different rights attached to them. In practice, all but three of the 49 jurisdictions covered by the Factbook allow listed companies to issue shares with limited voting rights. In many cases, such shares come with a preference with respect to the receipt of the firm’s profits.

Related party transactions are typically addressed through a combination of measures, including board approval, shareholder approval, and mandatory disclosure. Provisions for board approval are common; two-thirds of jurisdictions surveyed require or recommend board approval of certain types of related party transactions. Shareholder approval requirements are applied in 55% of jurisdictions, but are often limited to large transactions and those that are not carried out on market terms. Nearly all jurisdictions require disclosure of related party transactions, with 82% requiring use of International Accounting Standards (IAS24), while an additional 8% allow flexibility to follow IAS 24 or the local standard.

The Factbook provides extensive data on frameworks for corporate takeovers. Among the 46 jurisdictions that have introduced a mandatory bid rule, 80% take an ex-post approach, where a bidder is required to initiate the bid after acquiring shares exceeding the threshold. Nine jurisdictions take an ex-ante approach, where a bidder is required to initiate a takeover bid for acquiring shares which would exceed the threshold. More than 80% of jurisdictions with mandatory takeover bid rules establish a mechanism to determine the minimum bidding price.

Considering the important role played by institutional investors as shareholders of listed companies, nearly all jurisdictions have established provisions for at least one category of institutional investors (such as pension, investment or insurance funds) to address conflicts of interest, either by prohibiting specific acts or requiring them to establish policies to manage conflicts of interest. Three-fourths of all jurisdictions have established requirements or recommendations for institutional investors to disclose their voting policies, while almost half require or recommend disclosure of actual voting records. Some jurisdictions establish regulatory requirements or may rely on voluntary stewardship codes to encourage various forms of ownership engagement, such as monitoring and constructive engagement with investee companies and maintaining the effectiveness of monitoring when outsourcing the exercise of voting rights.

 

The corporate board of directors

 

The G20/OECD Principles require that the corporate governance framework ensures the strategic guidance of the company by the board and its accountability to the company and its shareholders. The most common board format is the one-tier board system, which is favoured in twice as many jurisdictions as those that apply two-tier boards (supervisory and management boards). A growing number of jurisdictions allow both one and two-tier structures.

Almost all jurisdictions require or recommend a minimum number or ratio of independent directors. Definitions of independent directors have also been evolving during this period: 80% of jurisdictions now require directors to be independent of significant shareholders in order to be classified as independent, up from 64% in 2015. The shareholding threshold determining whether a shareholder is significant ranges from 2% to 50%, with 10% to 15% being the most common.

Recommendations or requirements for the separation of the board chair and CEO have doubled in the last four years to 70%, including 30% required. The 2015 edition of the Factbook reported a binding requirement in only 11% of the jurisdictions, with another 25% recommending it in codes.

Nearly all jurisdictions require an independent audit committee. Nomination and remuneration committees are not mandatory in most jurisdictions, although more than 80% of jurisdictions at least recommend these committees to be established and often to be comprised wholly or largely of independent directors.

Requirements or recommendations for companies to assign a risk management role to board level committees have sharply increased since 2015, from 62% to 87% of surveyed jurisdictions. Requirements or recommendations to implement internal control and risk management systems have also increased significantly, from 62% to 90%.

While recruitment and remuneration of management is a key board function, a majority of jurisdictions have a requirement or recommendation for a binding or advisory shareholder vote on remuneration policy for board members and key executives. And nearly all jurisdictions surveyed now require or recommend the disclosure of the remuneration policy and the level/amount of remuneration at least at aggregate levels. Disclosure of individual levels is required or recommended in 76% of jurisdictions.

The 2019 Factbook provides data for the first time on measures to promote gender balance on corporate boards and in senior management, most often via disclosure requirements and measures such as mandated quotas and/or voluntary targets. Nearly half of surveyed jurisdictions (49%) have established requirements to disclose gender composition of boards, compared to 22% with regards to senior management. Nine jurisdictions have mandatory quotas requiring a certain percentage of board seats to be filled by either gender. Eight rely on more flexible mechanisms such as voluntary goals or targets, while three resort to a combination of both. The proportion of senior management positions held by women is reported to be significantly higher than the proportion of board seats held by women.

 

Mechanisms for flexibility and proportionality in corporate governance

 

It has already been pointed out that effective implementation of the G20/OECD Principles requires a good empirical understanding of economic realities and adaption to changes in corporate and market developments over time. The G20/OECD Principles therefore state that policy makers have a responsibility to put in place a framework that is flexible enough to meet the needs of corporations that are operating in widely different circumstances, facilitating their development of new opportunities and the most efficient deployment of resources. The 2019 Factbook provides a special chapter that presents the main findings of a complementary OECD review of how 39 jurisdictions apply the concepts of flexibility and proportionality across seven different corporate governance regulatory areas. The chapter builds on the 2018 OECD report Flexibility and Proportionality in Corporate Governance (OECD, 2018b). The report finds that a vast majority of countries have criteria that allow for flexibility and proportionality at company level in each of the seven areas of regulation that were reviewed: 1) board composition, board committees and board qualifications; 2) remuneration; 3) related party transactions; 4), disclosure of periodic financial information and ad hoc information; 5) disclosure of major shareholdings; 6) takeovers; and 7) pre-emptive rights. The report also contains case studies of six countries, which provide a more detailed picture of how flexibility and proportionality is being used in practice.

The complete publication, including footnotes, is available here.

Top 10 de Harvard Law School Forum on Corporate Governance au 21 juin 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 21 juin 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Image associée

 

 

  1. Defined Contribution Plans and the Challenge of Financial Illiteracy
  2. NYS Common Retirement Fund’s Climate Action Plan
  3. Calling the Cavalry: Special Purpose Directors in Times of Boardroom Stress
  4. Debt Default Activism: After Windstream, the Winds of Change
  5. Do Firms Issue More Equity When Markets Become More Liquid?
  6. U.S. Board Diversity Trends in 2019
  7. Regulation Best Interest
  8. Delaware’s New Competition
  9. Business Chemistry: A Path to a More Effective Board Composition
  10. The Modern Dilemma: Balancing Short- and Long-Term Business Pressures

 

Tendances observées eu égard à la diversité des conseils d’administration américains en 2019


L’article publié par Subodh Mishra, directrice générale de Institutional Shareholder Services (ISS), paru sur le site du forum de Harvard Law School montre clairement que les tendances eu égard à la diversité des Boards américains sont remarquables.

Qu’entend-on par la diversité des conseils d’administration ?

  1. le taux de remplacement des administrateurs sur le conseil
  2. le pourcentage de femmes qui accèdent à des conseils
  3. la diversité ethnique sur les conseils
  4. le choix d’administrateurs dont les compétences ne sont pas majoritairement financières
  5. le taux de nouveaux administrateurs pouvant être considérés comme relativement jeune

 

L’étude indique que pour chacune de ces variables, les conseils d’administration américains font preuve d’une plus grande diversité, sauf pour l’âge des administrateurs qui continue de croître.

Je vous invite à prendre connaissance de cet article pour vous former une idée plus juste des tendances observées sur les conseils d’administration.

Je n’ai pas de données comparables au Canada, mais je crois que la tendance à l’accroissement de la diversité est similaire.

Bonne lecture !

 

U.S. Board Diversity Trends in 2019

 

 

Résultats de recherche d'images pour « U.S. Board Diversity Trends in 2019 »

 

As the U.S. annual shareholder meeting season is coming to an end, we review the characteristics of newly appointed directors to reveal trends director in nominations. As of May 30, 2019, ISS has profiled the boards of 2,175 Russell 3000 companies (including the boards of 401 members of the S&P 500) with a general meeting of shareholders during the year. These figures represent approximately 75 percent of Russell 3000 companies that are expected to have a general meeting during the year. (A small portion of index constituents may not have a general meeting during a given calendar year due to mergers and acquisitions, new listings, or other extraordinary circumstances).

Based on our review of 19,791 directorships in the Russell 3000, we observe five major trends in new director appointments for 2019, as outlined below.

1. Board renewal rates continue to increase, as board refreshment, director qualifications, and board diversity remain high-priority issues for companies and investors.

2. The percentage of women joining boards reaches a new record high, with 45 percent of new Russell 3000 board seats filled by women in 2019 (compared to only 12 percent in 2008) and 19 percent of all Russell 3000 seats held by women.

3. Ethnic diversity also reached record highs, but has grown at a much slower rate, with approximately 10 percent of Russell 3000 directors currently belonging to an ethnic minority group, while 15 percent of new directors are ethnically diverse.

4. New director appointments focus on non-financial skillsets, with an increased proportion of directors having international experience, ESG expertise, and background in human resources.

5. The average director age continues to increase, as the appointment of younger directors is less frequent than in previous years, with only 7.2 percent of new directorships filled by directors younger than 45 years, compared to 11.5 percent of new directors in 2008.

Board Refreshment

 

After a decline in board renewal rates in the first years after the Great Recessions, boards began to add more new directors starting in 2012 and reached record numbers of board replenishment in 2017 and 2018, as a growing number of investors focused on board refreshment and board diversity. In 2019, the trend of board renewal continued, as we observe relatively higher rates of new director appointments as a percentage of all directorships compared to the beginning of the decade. But overall renewal rates are low. As of May 2019, only 5.3 percent of profiled Russell 3000 board directors were new to their boards, down from the record-high figure of 5.7 percent in 2018.

 

Proposals by Category

 

The surge in new director appointments observed in the past few years can be attributed to a greater emphasis on board gender diversity and board refreshment by many investors and companies. The percentage of companies introducing at least one new board member increased from 34.3 percent in 2018 to 35.6 percent this year. The percentage of companies introducing at least two new directors declined from 11.2 percent in 2018 to 10.2 percent in 2019, consistently above the 10-percent threshold along with the record-setting years of 2017 and 2018.

 

Proposals by Category

Gender Diversity

 

Gender diversity on boards accelerated further this year, breaking another record in terms of the percentage of new directors who are women. In the Russell 3000, 45 percent of new directors are women, up from 34 percent in 2018. Unlike previous years, when the percentage of new female directors was higher at large-capitalization companies, the high rate of new female directors—at almost parity—is consistent across all market segments. Several asset owners and asset managers had voting policies related to gender diversity prior to 2017. However, following State Street’s policy initiative to require at least one female director at every board in 2017, many more large investors have become more vocal about improving gender diversity on boards in the past two years, and many have introduced similar voting policies. We expect this trend to continue, as more investors are beginning to require more than the bare minimum of at least one woman on the board. Proxy advisors also introduced similar policies, with ISS’ policy to make adverse recommendation at all-male boards coming into effect in 2020.

But, more importantly, the push for gender diversity is no longer driven by shareholder engagement and voting only. New regulation in California mandates that all boards of companies headquartered in the state should have at least one woman on their boards in 2019, while at least three women board members are required by 2021 for boards with six members or more. Other states may follow suit, as New Jersey recently introduced legislation modeled after the California law, and Illinois is debating a bill that will require both gender and ethnic diversity on corporate boards.

Given the California mandate (affecting close to 700 public companies) and the continued focus by investors, it is no surprise that smaller firms, where gender diversity has been considerably lower compared to large companies, are revamping their efforts to improve gender diversity.

 

Proposals by Category

 

As a result of the record-setting recruitment of women on boards, 2019 saw the biggest jump in the overall gender diversity. The S&P 500 is well on its way of reaching 30 percent directorships held by women in the next couple of years, much earlier than we had predicted in the beginning of last year using a linear regression analysis. Obviously, female director recruitments has seen exponential growth in the past two years, which has accelerated the trend.

 

Proposals by Category

Ethnic Diversity

 

In 2019, we also see record number of ethnic minorities joining boards as new board members, with more than one-in-five new directorships being filled by non-Caucasian nominees at S&P 500, while approximately 15 percent of new board seats at all Russell 3000 companies are filled by minorities (the figure stands at 13 percent when excluding the S&P 500). As the discussion of diversity moves beyond gender, we may see the trend of higher minority representation on boards continue.

 

Proposals by Category

 

While the trend of increasing ethnic diversity on boards is visible, the rate of change is considerably slower than the trend in board gender diversity. Among board members whose race was identified, non-white Russell 3000 directors crossed the 10-percent threshold for the first time in 2019, compared to approximately 8 percent in 2008. These figures stand well below the proportion of non-White, non-Hispanic population in the U.S. of approximately 40 percent, according to the U.S. census bureau.

 

Proposals by Category

Director Skills

 

But diversity among new directors goes beyond gender and ethnicity. We observe a change in the skillsets disclosed by companies for new directors compared to incumbent directors. The rate of disclosure of skills is generally higher for new directors compared to directors who have served on boards for five years or more. Relative to tenure directors, we observe an increase in the percentage of new directors with expertise in technology (10 percentage points), sales (8 percentage points), international experience (8 percentage points), and strategic planning (6 percentage points). At the same time, we see a decrease in some traditional skills, such as financial and audit expertise, and CEO experience.

 

Proposals by Category

The increase in non-traditional skills becomes more pronounced when we look at the percentage difference in the frequency of each skill for new directors compared to directors with tenure of five years or more. Based on this analysis, international expertise, experience in corporate social responsibility, and human resources expertise all increase by more than 50 percent at new directors compared to their counterparts with tenure on the board of at least five years. As sustainability and corporate culture become focus items for many investors and companies, we expect this trend to continue. The percentage of “other” skills, which do not fall neatly in the established categories, also increases considerably. The list of skills that rank the lowest in terms of change compared to the tenured directors is telling of the increased emphasis in non-traditional skills: CFO experience, financial expertise, CEO experience, government experience, and audit expertise.

Proposals by Category

Age Diversity

 

U.S. boards are getting older. During the past twelve years, the average director age in the Russell 3000 has increased from 59.7 years in 2008 to 62.1 years in 2019. This trend becomes apparent when observing the age groups of newly appointed directors. In 2008, approximately 11.5 percent of new director were younger than 45 years, and this number has dropped to an all-time low of 7.2 percent in 2019. The percentage of newly appointed directors above the age of 67 has also been decreasing in the past five years reaching 6.5 percent in 2019, compared to its peak of 10.8 in 2014.

 

Proposals by Category

 

However, as incumbent directors stay on boards with the passing of time, the overall percentage of directors above the age of 67 years continues to increase, reaching a record high of 31.6 percent of all directorships in 2019, compared to 22.1 percent in 2008. We observe the opposite trend in relation to younger directors, whereby the proportion of directors younger than 45 years has dropped by almost 40 percent from 5.1 percent of directorships in 2008 to 3.2 of directorships in 2019.

 

Proposals by Category

The Changing Landscape for U.S. Boards

The U.S. is experiencing a significant shift in the composition of corporate boards, as the market expects companies to address a new set of challenges and their boards to better reflect developments in society. Board refreshment continues its upward trajectory in 2019, with higher rates of new directors compared to the beginning of the decade. While traditional skillsets remain paramount, we see a greater emphasis on non-financial skills, highlighting the need to focus on corporate culture, sustainability, and technology. At the same time, investors, companies, and regulators recognize the benefits of diversity, as we see record numbers of women and minorities on boards. Experience and qualifications appear more important than ever, which may explain the decline in younger directors in the past decade. These trends will likely continue, as investors continue to focus on board quality and governance as a foremost measure for protecting their investments and managing risk for sustainable growth.

Top 15 de Harvard Law School Forum on Corporate Governance au 13 juin 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 13 juin 2019.

Cette fois-ci,, j’ai relevé les quinze principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top 15 »

 

  1. Blurred Lines: Government Involvement in Corporate Internal Investigations and Implications for Individual Accountability
  2. Board Development and Director Succession Planning in the Age of Shareholder Activism, Engagement and Stewardship
  3. French Legislation on Corporate Purpose
  4. Will the Long-Term Stock Exchange Make a Difference?
  5. A New Era of Extraterritorial SEC Enforcement Actions
  6. Ten Years of Say-on-Pay Data
  7. New DOJ Compliance Program Guidance
  8. Board Diversity by Term Limits?
  9. Climate Change Risk Oversight Framework for Directors
  10. EVA, Not EBITDA: A Better Measure of Investment Value
  11. CFO Gender and Financial Statement Irregularities
  12. Help! I Settled With an Activist!
  13. What’s New on the SEC’s new RegFlex Agenda?
  14. Corporate Governance by Index Exclusion
  15. Precluding Pre-Merger Communications in Post-Merger Dispute

Compilation des billets en gouvernance les plus vus depuis un an


Aujourd’hui, je vous présente la compilation des billets les plus vus sur mon blogue en gouvernance depuis un an.

Bonne lecture !

 

Résultats de recherche d'images pour « compilation »

 

Cinq (5) principes simples et universels de saine gouvernance ?
Composition du conseil d’administration d’OSBL et recrutement d’administrateurs
Le rôle du secrétaire général d’une société
Vous siégez à un conseil d’administration | comment bien se comporter ?
Cadre de référence pour évaluer la gouvernance des sociétés | Questionnaire de 100 items
Le rôle du comité exécutif versus le rôle du conseil d’administration
Qu’est-ce qu’un président « exécutif » de conseil d’administration ? | Le cas de Bombardier 
Le processus de gestion des réunions d’un conseil d’administration | Première partie
Séparation des fonctions de PDG et de président du conseil d’administration | Signe de saine gouvernance !
Indicateurs de mesure de la performance des fonctions d’audit interne
Séparation des fonctions de président du conseil et de chef de la direction : retour sur un grand classique !
L’évaluation des conseils d’administration et des administrateurs | Sept étapes à considérer
Trois obstacles à la « bonne gouvernance » selon Marcel Côté
Attention aux huis clos du CA | en rappel
Le processus de gestion des réunions d’un conseil d’administration | Deuxième partie

Top 10 de Harvard Law School Forum on Corporate Governance au 6 juin 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 6 juin 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top dix »

 

 

  1. The Never-Ending Quest for Shareholder Rights: Special Meetings and Written Consent
  2. Rulemaking Petition on Non-GAAP Financials in Proxy Statements
  3. Legal Tools for the Active or Activist Shareholders
  4. Strategic Trading as a Response to Short Sellers
  5. Designing Pay Plans in the New 162(m) World
  6. The Business Case for ESG
  7. The New DOJ Compliance Guidelines and the Board’s Caremark Duties
  8. Institutional Trading around M&A Announcements
  9. Sustainability Accounting Standards and SEC Filings
  10. Statement on Final Rules Governing Investment Advice

Top 10 de Harvard Law School Forum on Corporate Governance au 30 mai 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 30 mai 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top ten »

 

 

  1. UK Shareholder Activism and Battles for Corporate Control
  2. The Corporate Form for Social Good
  3. President Trump’s Executive Order and Shareholder Engagement on Climate Change
  4. Management Duty to Set the Right “Tone at the Top”
  5. Compliance, Compensation and Corporate Wrongdoing
  6. A Fresh Look at Exclusive Forum Provisions
  7. Corporate Law and the Myth of Efficient Market Control
  8. Corporate Purpose: Stakeholders and Long-Term Growth
  9. SEC Roundtable on Short-Termism and Periodic Reporting System
  10. A Quarter Century of Exchange-Traded Fun!

Le rôle du CA dans le développement durable et la création de valeur pour les actionnaires et les parties prenantes


Aujourd’hui, je présente un article publié par Azeus Convene qui montre l’importance accrue que les entreprises doivent apporter au développement durable.
L’article insiste sur le rôle du conseil d’administration pour faire des principes du développement durable à long terme les principales conditions de succès des organisations.
Les administrateurs doivent concevoir des politiques qui génèrent une valeur ajoutée à long terme pour les actionnaires, mais ils doivent aussi contribuer à améliorer le sort des parties prenantes, telles que les clients, les communautés et la société en général.
Il n’est cependant pas facile d’adopter des politiques qui mettent de l’avant les principes du développement durable et de la gestion des risques liés à l’environnement.Dans ce document, publié sur le site de Board Agenda, on explique l’approche que les conseils d’administration doivent adopter en insistant plus particulièrement sur trois points :

 

  1. Un leadership capable de faire valoir les nombreux avantages stratégiques à tirer de cette approche ;
  2. Des conseils eu égard à l’implantation des changements
  3. Le processus de communication à mettre en œuvre afin de faire valoir les succès des entreprises

 

L’article qui suit donne plus de détails sur les fondements et l’application de l’approche du développement durable.

 

Bonne lecture ! Vos commentaires sont appréciés.

 

Le développement durable, la création de valeur et le rôle du CA

 

 

 

Businesses everywhere are developing sustainability policies. Implementation is never easy, but the right guidance can show the way.

When the experts sat down to write the UK’s new Corporate Governance Code earlier this year, they drafted a critical first principle. The role of the board is to “promote the long-term sustainable success of the company”. Boardroom members should generate value for shareholders, but they should also be “contributing to wider society”.

It is the values inherent in this principle that enshrines sustainability at the heart of running a company today.

Often sustainability is viewed narrowly, relating to policies affecting climate change. But it has long since ceased to be just about the environment. Sustainability has become a multifaceted concern embracing the long-term interests of shareholders, but also responsibilities to society, customers and local communities.

Publications like Harvard Business Review now publish articles such as “Inclusive growth: profitable strategies for tackling poverty and inequality”, or “Competing on social purpose”. Forbes has “How procurement will save the world” and “How companies can increase market rewards for sustainability efforts”. Sustainability is a headline issue for company leaders and here to stay.

But it’s not always easy to see how sustainability is integrated into a company’s existing strategy. So, why should your company engage with sustainability and what steps can it take to ensure it is done well?

…one of the biggest issues at the heart of the drive for sustainability is leadership. Implementing the right policies is undoubtedly a “top-down” process, not least because legal rulings have emphatically cast sustainability as a fiduciary duty.

The reasons for adopting sustainability are as diverse as the people and groups upon which companies have an impact. First, there is the clear environmental argument. Governments alone cannot tackle growing environment risk and will need corporates to play their part through their strategies and business models.

The issues driving political leaders have also filtered down to investment managers who have developed deep concerns that companies should be building strategies that factor in environmental, social and governance (ESG) risk. Companies that ignore the issue risk failing to attract capital. A 2015 study by the global benchmarking organisation PRI (Principles for Responsible Investment), conducted with Deutsche Bank Asset Management, showed that among 2,200 studies undertaken since 1970, 63% found a positive link between a company’s ESG performance and financial performance.

There’s also the risk of being left behind, or self-inflicted damage. In an age of instant digital communication news travels fast and a company that fails on sustainability could quickly see stakeholder trust undermined.

Companies that embrace the topic can also create what might be termed “sustainability contagion”: businesses supplying “sustainable” clients must be sustainable themselves, generating a virtuous cascade of sustainability behaviour throughout the supply chain. That means positive results from implemented sustainability policies at one end of the chain, and pressure to comply at the other.

Leadership

But perhaps one of the biggest issues at the heart of the drive for sustainability is leadership. Implementing the right policies is undoubtedly a “top-down” process, not least because legal rulings have emphatically cast sustainability as a fiduciary duty. That makes executive involvement and leadership an imperative. However, involvement of management at the most senior level will also help instil the kind of culture change needed to make sustainability an ingrained part of an organization, and one that goes beyond mere compliance.

Leaders may feel the need to demonstrate the value of a sustainability step-change. This is needed because a full-blooded approach to sustainability could involve rethinking corporate structures, processes and performance measurement. Experts recognise three ways to demonstrate value: risk, reward and recognition.

“Risk” looks at issues such as potential dangers associated with ignoring sustainability such as loss of trust, reputational damage (as alluded to above), legal or regulatory action and fines.

A “rewards”-centred approach casts sustainability as an opportunity to be pursued, as long as policies boost revenues or cut costs, and stakeholders benefit.

Meanwhile, the “recognition” method argues that sharing credit for spreading sustainability policies promotes long-term engagement and responsibility.

Implementation

Getting sustainability policies off the ground can be tricky, particularly because of their multifaceted nature.

recent study into European boards conducted by Board Agenda & Mazars in association with the INSEAD Corporate Governance Centre showed that while there is growing recognition by boards about the importance of sustainability, there is also evidence that they experience challenges about how to implement effective ESG strategies.

Proponents advise the use of “foundation exercises” for helping form the bedrock of sustainability policies. For example, assessing baseline environmental and social performance; analysing corporate management, accountability structures and IT systems; and an examination of material risk and opportunity.

That should provide the basis for policy development. Then comes implementation. This is not always easy, because being sustainable can never be attributed to a single policy. Future-proofing a company has to be an ongoing process underpinned by structures, measures and monitoring.
Policy delivery can be strengthened by the appointment of a chief sustainability officer (CSO) and establishing structures around the role, such as regular reporting to the chief executive and board, as well as the creation of a working committee to manage implementation of policies across the company.

Proponents advise the use of “foundation exercises” for helping form the bedrock of sustainability policies.

Sustainability values will need to be embedded at the heart of policies directing all business activities. And this can be supported through the use of an organisational chart mapping the key policies and processes to be adopted by each part of the business. The chart then becomes a critical ready reckoner for the boardroom and its assessment of progress.

But you can only manage what you measure, and sustainability policies demand the same treatment as any other business development initiative: key metrics accompanying the plan.

But what to measure? Examples include staff training, supply chain optimisation, energy efficiency, clean energy generation, reduced water waste, and community engagement, among many others.

Measuring then enables the creation of targets and these can be embedded in processes such as audits, supplier contracts and executive remuneration. If they are to have an impact, senior management must ensure the metrics have equal weight alongside more traditional measures.

All of this must be underpinned by effective reporting practices that provide a window on how sustainability practices function. And reporting is best supported by automated, straight-through processing, where possible.

Reliable reporting has the added benefit of allowing comparison and benchmarking with peers, if the data is available. The use of globally accepted standards—such as those provided by bodies like the Global Reporting Initiative—build confidence among stakeholders. And management must stay in touch, regularly consulting with the CSO and other stakeholders—customers, investors, suppliers and local communities—to ensure policies are felt in the right places.

Communication

Stakeholders should also hear about company successes, not just deliver feedback. Communicating a sustainability approach can form part of its longevity, as stakeholders hear the good news and develop an expectation of receiving more.

Companies are not expected to achieve all their sustainability goals tomorrow. Some necessarily take time. What is expected is long-term commitment and conviction, honest reporting and steady progress.

Care should be taken, however. Poor communication can be damaging, and a credible strategy will be required, one that considers how to deliver information frequently, honestly and credibly. It will need to take into account regulatory filings and disclosures, and potentially use social media as a means of reaching the right audience.

And that’s because successful sustainability policies are something to shout about. There is enormous pressure on companies to think differently, to reject a blinkered focus only on the bottom line and develop strategies that enable their companies to provide value, not only for shareholders but other stakeholders—society, customers, and suppliers—alike.

Companies are not expected to achieve all their sustainability goals tomorrow. Some necessarily take time. What is expected is long-term commitment and conviction, honest reporting and steady progress. The landscape on which businesses function is changing. They must change with it.

This article has been produced by Board Agenda in collaboration with Azeus Convene, a supporter of Board Agenda.

Top 10 de Harvard Law School Forum on Corporate Governance au 23 mai 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 23 mai 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top 10 »

 

 

  1. Educating Investors Through Leading Questions
  2. Reasons for “Male and Pale” Boards
  3. Are Share Buybacks a Symptom of Managerial Short-Termism?
  4. Evaluating Corporate Compliance—DOJ Guidelines for Prosecutors
  5. Unleashing the Power of Diversity Through Inclusive Leadership
  6. Global Divestment Study
  7. Share Buybacks Under Fire
  8. SEC Guidance on Auditor Independence
  9. SEC Staff Roundtable on Short-Term/Long-Term Management of Public Companies, Our Periodic Reporting System and Regulatory Requirements
  10. Seven Venial Sins of Executive Compensation

On assiste à une grande résistance aux changements dans la composition des CA en 2018 !


Aujourd’hui, je vous invite à faire un bref tour d’horizon des pratiques des conseils d’administration dans les compagnies publiques américaines (S&P 500 and Russell 3000) au cours de la dernière année.

Cet article publié par Matteo Tonello, Directeur de la recherche  ESG du Conference Board, a été publié sur le site de Harvard Law School Forum on Corporate Governance.

Il est notable que les pratiques des conseils d’administration n’aient pas évolué au même rythme que les changements dans les processus de gouvernance.

L’étude montre que la composition des conseils d’administration reste inchangée pour environ la moitié des entreprises cotées.

Cela laisse donc peu de place aux jeunes administrateurs de la relève puisque, lorsqu’il y a un poste vacant au sein d’un conseil, celui-ci est comblé par l’ajout d’un administrateur qui a déjà une longue expérience sur des conseils d’administration.

Parmi les résultats les plus concluants, je retiens les suivants :

  1. Directors are in for a long ride: their average tenure exceeds 10 years.
  2. Despite demand for more inclusiveness and a diverse array of skills, in their director selection companies continue to value prior board experience.
  3. Corporate boards remain quite inaccessible to younger generations of business leaders, with the highest number of directors under age 60 seen in new-economy sectors such as information technology and communications. 
  4. While progress on gender diversity of corporate directors is being reported, a staggering 20 percent of firms in the Russell 3000 index still have no female representatives on their board.
  5. Periodically evaluating director performance is critical to a more meritocratic and dynamic boardroom.
  6. Among smaller companies, staggered board structures also stand in the way of change

Pour plus d’information, je vous incite à lire le bref article qui suit.

Bonne lecture !

 

Corporate Board Practices in the S&P 500 and Russell 3000 | 2019 Edition

 

 

Résultats de recherche d'images pour « conseils d'administration »

 

According to a new report by The Conference Board and ESG data analytics firm ESGAUGE, in their 2018 SEC filings 50 percent of Russell 3000 companies and 43 percent of S&P 500 companies disclosed no change in the composition of their board of directors. More specifically, they neither added a new member to the board nor did they replace an existing member. In those cases where a replacement or addition did happen, it rarely affected more than one board seat. Only one-quarter of boards elected a first-time director who had never served on a public company board before.

These findings provide some important context to the current debate on gender diversity and board refreshment, underscoring the main reasons why progress remains slow: average director tenure continues to be quite extensive (at 10 years or longer), board seats rarely become vacant and, when a spot is available, it is often taken by a seasoned director rather than a newcomer with no prior board experience.

The study, Corporate Board Practices in the Russell 3000 and S&P 500: 2019 Edition, documents corporate governance trends and developments at 2,854 companies registered with the US Securities and Exchange Commission (SEC) that filed their proxy statement in the January 1 to November 1, 2018 period and, as of January 2018, were included in the Russell 3000 Index. Data are based on disclosure included by companies in proxy statements and other periodic SEC reports as well as on other organizational and policy documents (charters, bylaws, board committee charters, and corporate governance principles) accessible through the EDGAR database and the investor relations section of corporate websites. For comparative purposes, data are compared with the S&P 500 index and segmented by 11 business sectors under the Global Industry Classification Standard (GICS), five annual revenue groups, and three asset value groups.

The project was developed in collaboration with the John L. Weinberg Center for Corporate Governance (successor of the Investor Responsibility Research Center Institute (IRRCi)), Debevoise & Plimpton and Russell Reynolds Associates. Part of The Conference Board ESG Intelligence suite of benchmarking products, the study continues the long-standing tradition of The Conference Board as a provider of comparative information on organizational policies and practices. The suite is available at www.conference-board.org/ESGintelligence

Corporate governance has undergone a profound transformation in the last two decades, as a result of the legislative and regulatory changes that have expanded director responsibilities as well as the rise of more vocal shareholders. Yet the composition of the board of directors has not changed as rapidly as other governance practices. To this day, many public company boards do not see any turnover that is not the result of retirement at the end of a fairly long tenure.

Other findings from the report illustrate the state of board practices, which may vary markedly depending on the size of the organization or its business industry:

Directors are in for a long ride: their average tenure exceeds 10 years. About one-fourth of Russell 3000 directors who step down do so after more than 15 years of service. The longest average board member tenures are seen in the financial (13.2 years), consumer staples (11.1 years), and real estate (11 years) industries.

Despite demand for more inclusiveness and a diverse array of skills, in their director selection companies continue to value prior board experience. Only a quarter of organizations elect a director who has never served on a public company board before. Companies with annual revenue of $20 billion or higher are twice as likely to elect two first-time directors as those with an annual turnover of $1 billion or less (7.3 percent versus 3.2 percent).

Corporate boards remain quite inaccessible to younger generations of business leaders, with the highest number of directors under age 60 seen in new-economy sectors such as information technology and communications. Only 10 percent of Russell 3000 directors and 6.3 percent of S&P 500 directors are aged 50 or younger, and in both indexes about one-fifth of board members are more than 70 years of age. These numbers show no change from those registered two years ago. Regarding data on the adoption of retirement policies based on age, only about one-fourth of Russell 3000 companies choose to use such policies to foster director turnover.

While progress on gender diversity of corporate directors is being reported, a staggering 20 percent of firms in the Russell 3000 index still have no female representatives on their board. Albeit still slow, progress has been steady in the last few years—a reflection of the increasing demand for diversity made by multiple stakeholders and policy groups: For example, the Every Other One initiative by the Committee for Economic Development (CED) of The Conference Board advocates for a system where every other corporate board seat vacated by a retiring board member should be filled by a woman, while retaining existing female directors. [1] However, even though women are elected as corporate directors in larger numbers than before, almost all board chair positions remain held by men (only 4.1 percent of Russell 3000 companies have a female board chair).

Periodically evaluating director performance is critical to a more meritocratic and dynamic boardroom. However, even though many board members consider the performance of at least one fellow director as suboptimal, in the Russell 3000 index, only 14.2 percent of companies disclose that the contribution of individual directors is reviewed annually.

Among smaller companies, staggered board structures also stand in the way of change. Almost 60 percent of firms with revenue under $1 billion continue to retain a classified board and hold annual elections only for one class of their directors, not all. And while just 9.5 percent of financial institutions with asset value of $100 billion or higher have director classes, the percentage rises to 44.1 for those with asset value under $10 billion.

Though declining in popularity, a simple plurality voting standard remains prevalent. This voting standard allows incumbents in uncontested elections to be re-elected to the board even if a majority of the shares were voted against them. In the Russell 3000, 51.5 percent of directors retain plurality voting.

Only 15.5 percent of the Russell 3000 companies have adopted some type of proxy access bylaws. Such bylaws allow qualified shareholders to include their own director nominees on the proxy ballot, alongside candidates proposed by management. In all other companies, shareholders that want to bring forward a different slate of nominees need to incur the expense of circulating their own proxy materials.

Endnotes

1Every Other One: A Status Update on Women on Boards, Policy Brief, The Conference Board, Committee for Economic Development (CED), November 14, 2016, https://www.ced.org/reports/every-other-one-more-women-on-corporate-boards(go back)

Un plan de fusion avorté entre deux OBNL


Voici un cas publié sur le site de Julie McLelland qui aborde un processus de fusion manqué entre deux OBNL dont la mission est de s’occuper de déficience.

C’est un bris de confiance dramatique qui se produit entre les deux organisations, et la plupart des organisations sont dépourvues lorsqu’une telle situation se présente.

Kalinda, la présidente du conseil d’administration, se pose beaucoup de questions sur l’éjection de deux de ses hauts dirigeants qui siégeaient au CA de l’entreprise ciblée.

Elle n’est pas certaine de la meilleure approche à adopter dans une telle situation et c’est la raison pour laquelle elle cherche les meilleures avenues pour l’organisation et pour les cadres déchus.

Le cas présente la situation de manière assez factuelle, puis trois experts se prononcent sur le cas.

Bonne lecture ! Vos commentaires sont toujours les bienvenus.

 

Un plan de fusion avorté entre deux OBNL

 

 

Kalinda chairs a small disability-sector not for profit company. For almost a year the company has been in friendly merger discussions with a similar company operating in an adjacent geographic area.

Kalinda’s CEO and CFO were elected to the board of the neighbouring company in advance of the merger. Everyone expected the merger to proceed. Kalinda’s CEO and CFO reported that the merger was a major topic of that board’s discussions, but they could not give details as it would be a conflict of interest and they were excluded from most of the discussions.

Now Kalinda has received a letter from the chair of the other board saying the merger is not going ahead because due diligence uncovered some ‘worrying information’.

The letter also said the CEO and CFO must resign immediately as it was ‘no longer appropriate’ for them to be directors. Kalinda immediately called the executives who said they had no idea what had happened: They had not been made aware of any issues.

Kalinda’s executives called the CEO of the other company but she refused to talk to them and said the other directors had voted them off in a special meeting three days ago. Kalinda tried calling the other chair but her calls were all declined.

She wants to know what has been found and if there is any possibility of getting the merger discussions back on course. Her company has deferred several strategic projects, incurred legal costs, and refrained from bidding for a government contract so as not to compete against the other company.

What should Kalinda do?

 

Julia’s Answer

Kalinda should identify the actual reasons for the merger failing and analyse whether the show stoppers are on her side, the partner’s side, or connected to a third-party.

What if the problem is in her company and not evident to her? It could possibly be known or even invented (?) by the partner company – but they don’t seem to be open to providing any information. They could even think she is involved herself. It could be fraud, financial problems or any other major issues they consider as deal breaking. Kalinda needs to do her homework in her own company, carefully prioritising, and usually with external support. Her aim is to eliminate any potential time bombs quickly and efficiently.

Step two – analysing third party show stoppers on the partner’s side: The partner has been offered more attractive merger conditions by another company – Kalinda should identify the competitor and consider adapting her conditions, or they decided not to merge anymore, e.g. due to changing market circumstances or new, promising chances for business growth without a partner – Kalinda should find out what these could be and what they mean for her. The partner could also think that his and Kalinda’s executives are not a good match in general. In this case Kalinda needs to evaluate the consequences of a future with a merger but without her CEO and CFO.

Kalinda also needs to consider a completely new strategy starting from scratch – without the original target partner, possibly with a different partner or a business model and growth strategy her executive team drives alone. In each case Kalinda should evaluate whether her executive team is capable of delivering the future target performance and adds value with regards to the option/s she finally chooses and whether alternative executives would add more value.

Julia Zdrahal-Urbanek is Managing Partner of AltoPartners Austria and heads their board practice. She is based in Vienna, Austria.

 

Julie’s Answer

What a mess!

Kalinda is too far removed from the negotiations. She needs to talk with whoever has been handling the merger discussions from her company’s side and find out what are the issues that have led to this decision. If these are a concern to the prospective merger partner they should be a concern to the board.

She then needs to decide how she is going to move forwards when her two most senior executives are on the other party’s board and thus bound to act in the other party’s interests.  Kalinda is in no position to instruct her CEO and/or CFO on whether they should resign; that is a personal decision for them to make. Whilst they are on the other board they cannot act for Kalinda’s board on the merger.

It is the members, rather than the directors, who can vote directors off a board and, until there is a properly constituted members’ meeting they remain on the board unless they resign; they are not off the board simply because the other directors said so!

There should be a draft heads of agreement setting out how the parties will treat each other. Kalinda should reread it and see what it says about the costs of the deal, non-compete on tendering, deferral of projects, and other issues, that have now harmed her company.  She needs to consult her company’s legal adviser and find out if they can recover costs or claim damages.

Most important, she needs to schedule a board meeting and build consensus on a way forward. That is a board decision and not hers, as chair, to make. With any merger, acquisition, or divestment, a good board should always have a contingency plan. It is now time to implement it.

Julie Garland McLellan is a non-executive director and board consultant based in Sydney, Australia.

 

Brendan’s Answer

Kalinda needs to take a hard look at how they approached this potential and so called “friendly” merger.

Conscious Governance uses a six-step model for assessing partnerships, alliances, mergers and acquisitions: you must have the right strategy, information, timing, price, conditions, and integration.

From the information available, Kalinda, her Board and her executives failed significantly in their duty to their own organisation, especially on the first three items.

Firstly, I hear no clear strategic imperative for the merger to be entertained.  It is also puzzling why Kalinda’s CEO and CFO were elected to the other Board.  It is puzzling why Kalinda’s and the organisation’s policies allowed them to join the other board as Directors.  It is also puzzling, if not troubling, that the other Board facilitated their engagement as Directors, especially while merger discussions were underway.

Conscious Governance also encourages Boards to consider 20 tough questions (copies available on request) before embarking on merger discussions, and hopefully before someone wants to merge with you.  One question proposes a $30,000 break fee if the other party pulls out of the merger discussions.  This will test how serious they are.  It would also would have helped Kalinda’s organisation cover some costs but would not recompense lost business opportunities or contracts.

Brendan Walsh is a Senior Associate at Conscious Governance. He is based in Parkville, Victoria, Australia.

 

 

 

 

Top 10 de Harvard Law School Forum on Corporate Governance au 25 avril 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 25 avril 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top ten »

 

  1. The Long-term Habits of a Highly Effective Corporate Board
  2. Nuveen 2019 Proxy Season Preview
  3. On Proxy Advisors and Important Issues for Investors in 2019
  4. Lazard’s 1Q 2019 Activism Review
  5. Three Dilemmas for Creating a Long-Term Board
  6. Disclosure Simplification Round Two: a Deep Dive into SEC’s New Amendments
  7. Governing Law and Forum Selection Clauses
  8. Five Ways to Enhance Board Oversight of Culture
  9. Claims Based on Warranty and Indemnity Liability (W&I) Policies
  10. Providing Retail Investors a Voice in the Proxy Process

Top 10 de Harvard Law School Forum on Corporate Governance au 18 avril 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 18 avril 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top ten »

 

Résultats de recherche d'images pour « Top 10 en gouvernance Harvard Law School »

 

 

  1. Noteworthy Developments in 2018 Affecting Executive Pay
  2. 2018 Year-End Activism Update
  3. The Life Cycle of Corporate Venture Capital
  4. 2019 Proxy Season Preview
  5. The Purposive Transformation of Company Law
  6. 2019 U.S. Executive Compensation Trends
  7. Recent Developments in Human Capital Management Disclosure
  8. What’s the Problem with Dual Class Stock? A Brief Response to Professors Bebchuk and Kastiel
  9. Communicating Culture Consistently: Evidence from Banks
  10. 2019 Say on Pay & Proxy Results

 

Top 10 de Harvard Law School Forum on Corporate Governance au 21 mars 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 21 mars 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top ten »

 

Résultats de recherche d'images pour « Top 10 en gouvernance Harvard Law School »

 

 

 

  1. Do Firms Respond to Gender Pay Gap Transparency?
  2. A Reminder About Corporate Crisis Communications
  3. Is it Time for Corporate Political Spending Disclosure?
  4. Where’s the Greenium?
  5. The Short-Termism Thesis: Dogma vs. Reality
  6. S&P 1500 Pay-for-Performance Update: Strong Financials, Negative Shareholder Returns
  7. The Unicorn IPO Report
  8. 2018 Year-End Securities Litigation Update
  9. Incentive Pay and Systemic Risk
  10. ESG Rating and Momentum

Top 10 de Harvard Law School Forum on Corporate Governance au 15 mars 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 15 mars 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « Dix premiers »

 

Résultats de recherche d'images pour « Top 10 en gouvernance Harvard Law School »

 

 

 

  1. As California Goes, So Goes the Nation? The Impact of Board Gender Quotas on Firm Performance and the Director Labor Market
  2. The Labor Market for Directors and Externalities in Corporate Governance: Evidence from the International Labor Market
  3. Equity Market Structure 2019: Looking Back & Moving Forward
  4. The Strategies of Anticompetitive Common Ownership
  5. Technology and the Boardroom: A CIO’s Guide to Engaging the Board
  6. Everything Old is New Again—Reconsidering the Social Purpose of the Corporation
  7. Behavioral Foundations of Corporate Culture
  8. Rule 14a-8 Exceptions and Executive Compensation
  9. SEC Enforcement Against Self-Reporting Token Issuer
  10. 2019 Lobbying Disclosure Resolutions

Composition du conseil d’administration d’OSBL et recrutement d’administrateurs | En rappel


Ayant collaboré à la réalisation du volume « Améliorer la gouvernance de votre OSBL » des auteurs Jean-Paul Gagné et Daniel Lapointe, j’ai obtenu la primeur de la publication d’un chapitre sur mon blogue en gouvernance.

Pour donner un aperçu de cette importante publication sur la gouvernance des organisations sans but lucratif (OSBN), j’ai eu la permission des éditeurs, Éditions Caractère et Éditions Transcontinental, de publier l’intégralité du chapitre 4 qui porte sur la composition du conseil d’administration et le recrutement d’administrateurs d’OSBL.

Je suis donc très fier de vous offrir cette primeur et j’espère que le sujet vous intéressera suffisamment pour vous inciter à vous procurer cette nouvelle publication.

Vous trouverez, ci-dessous, un court extrait de la page d’introduction du chapitre 4. Je vous invite à cliquer sur le lien suivant pour avoir accès à l’intégralité du chapitre.

 

La composition du conseil d’administration et le recrutement d’administrateurs

 

 

Résultats de recherche d'images pour « composition du CA »

 

Vous pouvez également feuilleter cet ouvrage en cliquant ici

Bonne lecture ! Vos commentaires sont les bienvenus.

__________________________________

 

Les administrateurs d’un OSBL sont généralement élus dans le cadre d’un processus électoral tenu lors d’une assemblée générale des membres. Ils peuvent aussi faire l’objet d’une cooptation ou être désignés en vertu d’un mécanisme particulier prévu dans une loi (tel le Code des professions).

L’élection des administrateurs par l’assemblée générale emprunte l’un ou l’autre des deux scénarios suivants:

1. Les OSBL ont habituellement des membres qui sont invités à une assemblée générale annuelle et qui élisent des administrateurs aux postes à pourvoir. Le plus souvent, les personnes présentes sont aussi appelées à choisir l’auditeur qui fera la vérification des états financiers de l’organisation pour l’exercice en cours.

ameliorezlagouvernancedevotreosbl

2. Certains OSBL n’ont pas d’autres membres que leurs administrateurs. Dans ce cas, ces derniers se transforment une fois par année en membres de l’assemblée générale, élisent des administrateurs aux postes vacants et choisissent l’auditeur qui fera la vérification des états financiers de l’organisation pour l’exercice en cours.

 

La cooptation autorise le recrutement d’administrateurs en cours d’exercice. Les personnes ainsi choisies entrent au CA lors de la première réunion suivant celle où leur nomination a été approuvée. Ils y siègent de plein droit, en dépit du fait que celle-ci ne sera entérinée qu’à l’assemblée générale annuelle suivante. La cooptation n’est pas seulement utile pour pourvoir rapidement aux postes vacants; elle a aussi comme avantage de permettre au conseil de faciliter la nomination de candidats dont le profil correspond aux compétences recherchées.

Dans les organisations qui élisent leurs administrateurs en assemblée générale, la sélection en fonction des profils déterminés peut présenter une difficulté : en effet, il peut arriver que les membres choisissent des administrateurs selon des critères qui ont peu à voir avec les compétences recherchées, telles leur amabilité, leur popularité, etc. Le comité du conseil responsable du recrutement d’administrateurs peut présenter une liste de candidats (en mentionnant leurs qualifications pour les postes à pourvoir) dans l’espoir que l’assemblée lui fasse confiance et les élise. Certains organismes préfèrent coopter en cours d’exercice, ce qui les assure de recruter un administrateur qui a le profil désiré et qui entrera en fonction dès sa sélection.

Quant à l’élection du président du conseil et, le cas échéant, du vice-président, du secrétaire et du trésorier, elle est généralement faite par les administrateurs. Dans les ordres professionnels, le Code des professions leur permet de déterminer par règlement si le président est élu par le conseil d’administration ou au suffrage universel des membres. Comme on l’a vu, malgré son caractère démocratique, l’élection du président au suffrage universel des membres présente un certain risque, puisqu’un candidat peut réussir à se faire élire à ce poste sans expérience du fonctionnement d’un CA ou en poursuivant un objectif qui tranche avec la mission, la vision ou encore le plan stratégique de l’organisation. Cet enjeu ne doit pas être pris à la légère par le CA. Une façon de minimiser ce risque est de faire connaître aux membres votants le profil recherché pour le président, profil qui aura été préalablement établi par le conseil. On peut notamment y inclure une expérience de conseil d’administration, ce qui aide à réduire la période d’apprentissage du nouveau président et facilite une transition en douceur.

L’âge des administrateurs de sociétés représente-t-il un facteur déterminant dans leur efficacité comme membres indépendants de conseils d’administration ? En reprise


Voici une question que beaucoup de personnes expertes avec les notions de bonne gouvernance se posent : « L’âge des administrateurs de sociétés représente-t-il un facteur déterminant dans leur efficacité comme membres indépendants de conseils d’administration ? »

En d’autres termes, les administrateurs indépendants (AI) de 65 ans et plus sont-ils plus avisés, ou sont-ils carrément trop âgés ?

L’étude menée par Ronald Masulis* de l’Université de New South Wales Australian School of Business et de ses collègues est très originale dans sa conception et elle montre que malgré toutes les réformes réglementaires des dernières années, l’âge des administrateurs indépendants est plus élevé au lieu d’être plus bas, comme on le souhaitait.

L’étude montre que pendant la période allant de 1998 à 2014, l’âge médian des administrateurs indépendants (AI) des grandes entreprises américaines est passé de 60 à 64 ans. De plus, le pourcentage de firmes ayant une majorité de AI de plus de 65 ans est passé de 26 % à 50 % !

L’étude montre que le choix d’administrateurs indépendants de plus de 65 ans se fait au détriment d’une nouvelle classe de jeunes administrateurs dynamiques et compétents. Cela a pour effet de réduire le bassin des nouveaux administrateurs requis pour des postes d’administrateurs de la relève, ainsi que pour les besoins criants d’une plus grande diversité.

In our new study Directors: Older and Wiser, or Too Old to Govern?, we investigate this boardroom aging phenomenon and examine how it affects board effectiveness in terms of firm decision making and shareholder value creation. On the one hand, older independent directors can be valuable resources to firms given their wealth of business experience and professional connections accumulated over the course of their long careers. Moreover, since they are most likely to have retired from their full-time jobs, they should have more time available to devote to their board responsibilities. On the other hand, older independent directors can face declining energy, physical strength, and mental acumen, which can undermine their monitoring and advisory functions. They can also have less incentive to build and maintain their reputation in the director labor market, given their dwindling future directorship opportunities and shorter expected board tenure as they approach normal retirement age.

Dans la foulée des mouvements activistes, plusieurs entreprises semblent faire le choix d’AI plus âgés. Cependant, l’analyse coût/bénéfice de l’efficacité des AI plus âgés montre que leurs rendements est possiblement surfait et que la tendance à éliminer ou à retarder l’âge limite de retraite doit faire l’objet d’une bonne réflexion !

Si le sujet vous intéresse, je vous invite à lire l’article original. Vos commentaires sont les bienvenus.

Bonne lecture !

 

Directors: Older and Wiser, or Too Old to Govern?

 

 

Résultats de recherche d'images pour « age of board member »

 

The past two decades have witnessed dramatic changes to the boards of directors of U.S. public corporations. Several recent governance reforms (the 2002 Sarbanes-Oxley Act, the revised 2003 NYSE/Nasdaq listing rules, and the 2010 Dodd-Frank Act) combined with a rise in shareholder activism have enhanced director qualifications and independence and made boards more accountable. These regulatory changes have significantly increased the responsibilities and liabilities of outside directors. Many firms have also placed limits on how many boards a director can sit on. This changing environment has reduced the ability and incentives of active senior corporate executives to serve on outside boards. Faced with this reduced supply of qualified independent directors and the increased demand for them, firms are increasingly relying on older director candidates. As a result, in recent years the boards of U.S. public corporations have become notably older in age. For example, over the period of 1998 to 2014, the median age of independent directors at large U.S. firms rose from 60 to 64, and the percentage of firms with a majority of independent directors age 65 or above nearly doubled from 26% to 50%.

In our new study Directors: Older and Wiser, or Too Old to Govern?, we investigate this boardroom aging phenomenon and examine how it affects board effectiveness in terms of firm decision making and shareholder value creation. On the one hand, older independent directors can be valuable resources to firms given their wealth of business experience and professional connections accumulated over the course of their long careers. Moreover, since they are most likely to have retired from their full-time jobs, they should have more time available to devote to their board responsibilities. On the other hand, older independent directors can face declining energy, physical strength, and mental acumen, which can undermine their monitoring and advisory functions. They can also have less incentive to build and maintain their reputation in the director labor market, given their dwindling future directorship opportunities and shorter expected board tenure as they approach normal retirement age.

We analyze a sample of S&P 1500 firms over the 1998-2014 period and define an independent director as an “older independent director” (OID) if he or she is at least 65 years old. We begin by evaluating individual director performance by comparing board meeting attendance records and major board committee responsibilities of older versus younger directors. Controlling for a battery of director and firm characteristics as well as director, year, and industry fixed effects, we find that OIDs exhibit poorer board attendance records and are less likely to serve as the chair or a member of an important board committee. These results suggest that OIDs either are less able or have weaker incentives to fulfill their board duties.

We next examine major corporate policies and find a large body of evidence consistently pointing to monitoring deficiencies of OIDs. To measure the extent of boardroom aging, we construct a variable, OID %, as the fraction of all independent directors who are categorized as OIDs. As the percentage of OIDs on corporate boards rises, excess CEO compensation increases. This relationship is mainly driven by the cash component of CEO compensation. A greater OID presence on corporate boards is also associated with firms having lower financial reporting quality, poorer acquisition profitability measured by announcement returns, less generous payout polices, and lower CEO turnover-to-performance sensitivity. Moreover, we find that firm performance, measured either by a firm’s return on assets or its Tobin’s Q, is significantly lower when firms have a greater fraction of OIDs on their boards. These results collectively support the conclusion that OIDs suffer from monitoring deficiencies that impair the board’s effectiveness in providing management oversight.

We employ a number of approaches to address the endogeneity issue. First, we include firm-fixed effects wherever applicable to control for unobservable time-invariant firm-specific factors that may correlate with both the presence of OIDs and the firm outcome variables that we study. Second, we employ an instrumental variable regression approach where we instrument for the presence of OIDs on a firm’s board with a measure capturing the local supply of older director candidates in the firm’s headquarters state. We find that all of our firm-level results continue to hold under a two-stage IV regression framework. Third, we exploit a regulatory shock to firms’ board composition. The NYSE and Nasdaq issued new listing standards in 2003 following the passage of the Sarbanes-Oxley Act (SOX), which required listed firms to have a majority of independent directors on the board. We show that firms non-compliant with the new rule experienced a significantly larger increase in the percentage of OIDs over the 2000-2005 period compared to compliant firms. A major reason for this difference is that noncompliant firms needed to hire more OIDs to comply with the new listing standards. Using a firm’s noncompliance status as an instrument for the change in the board’s OID percentage, we find that firm performance deteriorates as noncompliant firms increase OIDs on their boards. We also conduct two event studies, one on OID appointment announcements and the other on the announcements of firm policy changes that increase the mandatory retirement age of outside directors. We find that shareholders react negatively to both announcements.

In our final set of analysis, we explore cross-sectional variations in the relation between OIDs and firm performance and policies. We find that the negative relation between OIDs and firm performance is more pronounced when OIDs hold multiple outside board seats. This evidence suggests that “busyness” exacerbates the monitoring deficiency of OIDs. We also find that for firms with high advisory needs, the relation between OIDs and firm performance is no longer significantly negative and in some cases, becomes positive. These results are consistent with OIDs using their experience and resources to provide valuable counsel to senior managers in need of board advice. Also consistent with OIDs performing a valuable advisory function, our analysis of acquirer returns shows that the negative relation between OIDs and acquirer returns is limited to OIDs who have neither prior acquisition experience, nor experience in the target industry. For OIDs with either type of experience, their marginal effect on acquirer returns is non-negative, and sometimes significantly positive.

Our research is the first investigation of the pervasive and growing phenomenon of boardroom aging at large U.S. corporations and its impact on board effectiveness and firm performance. As the debate over director age limits continues in the news media and among activist shareholders and regulators, our findings on the costs and benefits associated with OIDs can provide important and timely policy guidance. For companies considering lifting or waiving mandatory director retirement age requirements, so as to lower the burden of recruiting and retaining experienced independent directors, our evidence should give them pause. Similarly, while recent corporate governance reforms and the rise in shareholder activism have made boards, and especially independent directors, more accountable for managerial decisions and firm performance, they may also have created the unintended consequence of shrinking the supply of potential independent directors who are younger active executives. This result has led firms to tap deeper into the pool of older director candidates, which our analysis shows can undermine the very objectives that corporate governance reforms seek to accomplish.

The complete paper is available for download here.

___________________________________________________________________________________

*Ronald Masulis is Scientia Professor of Finance at University of New South Wales Australian School of Business; Cong Wang is Professor of Finance at The Chinese University of Hong Kong, Shenzhen and the associate director of Shenzhen Finance Institute; Fei Xie is Associate Professor of Finance at the University of Delaware; and Shuran Zhang is Associate Professor of Finance at Jinan University. This post is based on their recent paper.

Top 10 de Harvard Law School Forum on Corporate Governance au 7 mars 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 7 mars 2019.

Comme à l’habitude, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top ten »

 

Résultats de recherche d'images pour « Top 10 en gouvernance Harvard Law School »

 

 

  1. The Director-Shareholder Engagement Guidebook
  2. Reconsidering Stockholder Primacy in an Era of Corporate Purpose
  3. Peer Group Choice and Chief Executive Officer Compensation
  4. An Early Look at 2019 US Shareholder Proposals
  5. Driving the Conversation: Long-Term Roadmaps for Long-Term Success
  6. The End of “Corporate” Governance: Hello “Platform” Governance
  7. Remarks Before the Council of Institutional Investors
  8. SEC Enforcement for Internal Control Failures
  9. Long-Term Bias
  10. Top 10 Sustainability Developments in 2018

Les actions multivotantes sont populaires aux États-Unis. Les entreprises canadiennes devraient-elles emboîter le pas ?


Je vous recommande la lecture de cet article d’Yvan Allaire*, président exécutif du conseil d’administration de l’IGOPP, paru dans le Financial Post le 6 mars 2019.

Comme je l’indiquais dans un précédent billet, Les avantages d’une structure de capital composée d’actions multivotantes, celles-ci « n’ont pas la cote au Canada ! Bien que certains arguments en faveur de l’exclusion de ce type de structure de capital soient, de prime abord, assez convaincants, il existe plusieurs autres considérations qui doivent être prises en compte avant de les interdire et de les fustiger ».

Cependant, comme l’auteur le mentionne dans son article, cette structure de capital est de plus en plus populaire dans le cas d’entreprises entrepreneuriales américaines.

Il y a de nombreux avantages de se prévaloir de la formule d’actions multivotantes. Selon Allaire, les entreprises canadiennes, plus particulièrement les entreprises québécoises, devraient en profiter pour se joindre au mouvement.

J’ai reproduit, ci-dessous, l’article publié dans le Financial Post. Quelle est votre opinion sur ce sujet controversé ?

Bonne lecture ! Vos commentaires sont les bienvenus.

 

Dual-class shares are hot in the U.S. again. Canada should join in

 

 

Image associée
Some 69 dual-class companies are now listed on the Toronto Stock Exchange, down from 100 in 2005. Peter J. Thompson/National Post 

American fund managers are freaking out about the popularity of multiple voting shares among entrepreneurs going for an initial public offering (IPO). In recent years, some 20 per cent of American IPOs (and up to a third among tech entrepreneurs) have adopted a dual-class structure. Fund managers are working overtime to squelch this trend.

In Canada, this form of capital structure has been the subject of unrelenting attacks by some fund managers, proxy-advisory firms and, to a surprising degree, by academics. Some 69 dual-class companies are now listed on the Toronto Stock Exchange, down from 100 in 2005. Since 2005, only 23 Canadian companies went public with dual-class shares and 16 have since converted to a single-class.

A dual class of shares provides some measure of protection from unwanted takeovers as well as from the bullying that has become a feature of current financial markets. (The benefits of homegrown champions, controlled by citizens of the country and headquartered in that country need no elaboration. Not even the U.S. tolerates a free-for-all takeover regime, but Canada does!)

These 69 dual-class companies have provided 19 of Canada’s industrial champions as well as 12 of the 50 largest Canadian employers. The 54 companies (out of the 69 that were listed on the TSX 10 years ago) provided investors with a mean annual compounded return of 8.98 per cent (median 9.62 per cent) as compared to 5.06 per cent for the S&P/TSX Index and 6.0 per cent for the TSX 60 index (as per calculations by the Institute for Governance of Private and Public Organizations).

As for the quality of their governance, by the standards set by The Globe and Mail for its annual governance scoring of TSX-listed companies, the average governance score of companies without a dual-class of shares is 66.15 while the score of companies with multiple voting shares, once the penalty (up to 10 points) imposed on dual-class companies is removed, is 60.1, a barely significant difference.

 


*Cet article a été et rédigé par Yvan Allaire, Ph. D. (MIT), MSRC, président exécutif du conseil d’administration de l’IGOPP.

Top 15 de Harvard Law School Forum on Corporate Governance au 28 février 2019


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 28 février 2019.

Cette fois-ci, j’ai relevé les quinze principaux billets.

Bonne lecture !

 

Résultats de recherche d'images pour « top 15 »

Résultats de recherche d'images pour « Top 10 en gouvernance Harvard Law School »

 

 

  1. Go-Shops Revisited
  2. A Capitalist’s Solution to the Problem of Excessive Buybacks
  3. CEO Pay Mix Changes Following Say on Pay Failures
  4. Corporate Governance in Emerging Markets
  5. D.C. Speaks Up: A Push for Board Diversity from the SEC and Congress
  6. Common Ownership in America: 1980-2017
  7. The Board and ESG
  8. Purpose, Culture and Long-Term Value—Not Just a Headline
  9. Successor CEOs
  10. 2019 Proxy Season Preview
  11. 2019 Institutional Investor Survey
  12. Non-Answers During Conference Calls
  13. Trends in Shareholder Activism
  14. Synthesizing the Messages from BlackRock, State Street, and T. Rowe Price
  15. Frequently Overlooked Disclosure Items in Annual Proxy Statements
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