Auteur : Gouvernance des entreprises | Jacques Grisé

Ce blogue fait l’inventaire des documents les plus pertinents et récents en gouvernance des entreprises. La sélection des billets, « posts », est le résultat d’une veille assidue des articles de revue, des blogues et sites web dans le domaine de la gouvernance, des publications scientifiques et professionnelles, des études et autres rapports portant sur la gouvernance des sociétés, au Canada et dans d’autres pays, notamment aux États-Unis, au Royaume-Uni, en France, en Europe, et en Australie. Chaque jour, je fais un choix parmi l’ensemble des publications récentes et pertinentes et je commente brièvement la publication. L’objectif de ce blogue est d’être la référence en matière de documentation en gouvernance dans le monde francophone, en fournissant au lecteur une mine de renseignements récents (les billets quotidiens) ainsi qu’un outil de recherche simple et facile à utiliser pour répertorier les publications en fonction des catégories les plus pertinentes. Jacques Grisé est professeur titulaire retraité (associé) du département de management de la Faculté des sciences de l’administration de l’Université Laval. Il est détenteur d’un Ph.D. de la Ivy Business School (University of Western Ontario), d’une Licence spécialisée en administration des entreprises (Université de Louvain en Belgique) et d’un B.Sc.Comm. (HEC, Montréal). En 1993, il a effectué des études post-doctorales à l’University of South Carolina, Columbia, S.C. dans le cadre du Faculty Development in International Business Program. Il a été directeur des programmes de formation en gouvernance du Collège des administrateurs de sociétés (CAS) de 2006 à 2012. Il est maintenant collaborateur spécial au CAS. Il a été président de l’ordre des administrateurs agréés du Québec de 2015 à 2017. Jacques Grisé a été activement impliqué dans diverses organisations et a été membre de plusieurs comités et conseils d'administration reliés à ses fonctions : Professeur de management de l'Université Laval (depuis 1968), Directeur du département de management (13 ans), Directeur d'ensemble des programmes de premier cycle en administration (6 ans), Maire de la Municipalité de Ste-Pétronille, I.O. (1993-2009), Préfet adjoint de la MRC l’Île d’Orléans (1996-2009). Il est présentement impliqué dans les organismes suivants : membre de l'Ordre des administrateurs agréés du Québec (OAAQ), membre du Comité des Prix et Distinctions de l'Université Laval. Il préside les organisations suivantes : Société Musique de chambre à Ste-Pétronille Inc. (depuis 1989), Groupe Sommet Inc. (depuis 1986), Coopérative de solidarité de Services à domicile Orléans (depuis 2019) Jacques Grisé possède également une expérience de 3 ans en gestion internationale, ayant agi comme directeur de projet en Algérie et aux Philippines de 1977-1980 (dans le cadre d'un congé sans solde de l'Université Laval). Il est le Lauréat 2007 du Prix Mérite du Conseil interprofessionnel du Québec (CIQ) et Fellow Adm.A. En 2012, il reçoit la distinction Hommage aux Bâtisseurs du CAS. En 2019, il reçoit la médaille de l’assemblée nationale. Spécialités : Le professeur Grisé est l'auteur d’une soixantaine d’articles à caractère scientifique ou professionnel. Ses intérêts de recherche touchent principalement la gouvernance des sociétés, les comportements dans les organisations, la gestion des ressources humaines, les stratégies de changement organisationnel, le processus de consultation, le design organisationnel, la gestion de programmes de formation, notamment ceux destinés à des hauts dirigeants et à des membres de conseil d'administration.

En rappel | Ce que chaque administrateur de sociétés devrait savoir à propos de la sécurité infonuagique

Cet article est basé sur un rapport de recherche de Paul A. Ferrillo, avocat conseil chez Weil, Gotshal & Manges, et de Dave Burg et Aaron Philipp de PricewaterhouseCoopers. Les auteurs présentent une conceptualisation des facteurs infonuagiques (cloud computing) qui influencent les entreprises, en particulier les comportements de leurs administrateurs.

L’article donne une définition du phénomène infonuagique et montre comment les conseils d’administration sont interpellés par les risques que peuvent constituer les cyber-attaques. En fait, la partie la plus intéressante de l’article consiste à mieux comprendre, ce que les auteurs appellent, la « Gouvernance infonuagique » (Cloud Cyber Governance).

L’article propose plusieurs questions critiques que les administrateurs doivent adresser à la direction de l’entreprise.

Vous trouverez, ci-dessous, les points saillants de cet article lequel devrait intéresser les administrateurs préoccupés par les aspects de sécurité des opérations infonuagiques.

Bonne lecture !

Cloud Cyber Security: What Every Director Needs to Know

« There are four competing business propositions affecting most American businesses today. Think of them as four freight trains on different tracks headed for a four-way stop signal at fiber optic speed.

First, with a significant potential for cost savings, American business has adopted cloud computing as an efficient and effective way to manage countless bytes of data from remote locations at costs that would be unheard of if they were forced to store their data on hard servers. According to one report, “In September 2013, International Data Corporation predicted that, between 2013 and 2017, spending on pubic IT cloud computing will experience a compound annual growth of 23.5%.” Another report noted, “By 2014, cloud computing is expected to become a $150 billion industry. And for good reason—whether users are on a desktop computer or mobile device, the cloud provides instant access to data anytime, anywhere there is an Internet connection.”

The second freight train is data security. Making your enterprise’s information easier for you to access and analyze also potentially makes it easier for others to do, too. 2013 and 2014 have been the years of “the big data breach,” with millions of personal data and information records stolen by hackers. Respondents to the 2014 Global State of Information Security® Survey reported a 25% increase in detected security incidents over 2012 and a 45% increase compared to 2011. Though larger breaches at global retailers are extremely well known, what is less known is that cloud providers are not immune from attack. Witness the cyber breach against a file sharing cloud provider that was perpetrated by lax password security and which caused a spam attack on its customers. “The message is that cyber criminals, just like legitimate companies, are seeing the ‘business benefits’ of cloud services. Thus, they’re signing up for accounts and reaching sensitive files through these accounts. For the cyber criminals this only takes a run-of-the-mill knowledge level … This is the next step in a new trend … and it will only continue.”

The third freight train is the plaintiff’s litigation bar. Following cyber breach after cyber breach, they are viewing the corporate horizon as rich with opportunities to sue previously unsuspecting companies caught in the middle of a cyber disaster, with no clear way out. They see companies scrambling to contend with major breaches, investor relation delays, and loss of brand and reputation.

The last freight train running towards the intersection of cloud computing and data security is the topic of cyber governance—i.e., what directors should be doing or thinking about to protect their firm’s most critical and valuable IP assets. In our previous article, we noted that though directors are not supposed to be able to predict all potential issues when it comes to cyber security issues, they do have a basic fiduciary duty to oversee the risk management of the enterprise, which includes securing its intellectual property and trade secrets. The purpose of this article is to help directors and officers potentially avoid a freight train collision by helping the “cyber governance train” control the path and destiny of the company. We will discuss basic cloud security principles, and basic questions directors should ask when considering whether or not the data their management desires to run on a cloud-based architecture will be as safe from attack as possible. As usual when dealing with cyber security issues, there are no 100% foolproof answers. Even cloud experts disagree on cloud-based data security practices and their effectiveness] There are only good questions a board can ask to make sure it is fulfilling its duties to shareholders to protect the company’s valuable IP assets.

What is Cloud Computing/What Are Its Basic Platforms

“Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services). Cloud computing is a disruptive technology that has the potential to enhance collaboration, agility, scaling, and availability, and provides the opportunities for cost reduction through optimized and efficient computing. The cloud model envisages a world where components can be rapidly orchestrated, provisioned, implemented and decommissioned, and scaled up or down to provide an on-demand utility-like model of allocation and consumption.”

Cloud computing is generally based upon three separate and distinct architectures that matter when considering the security of the data sitting in the particular cloud environment.

……

Cloud Cyber Governance

As shown above, what is commonly referred to as the cloud actually can mean many different things depending on the context and use. Using SaaS to manage a customer base has a vastly different set of governance criteria to using IaaS as a development environment. As such, there are very few accepted standards for properly monitoring/administering a cloud-based environment. There are many IT consultants in the cloud-based computing environment that can be consulted in that regard. Our view, however, is that directors are ultimately responsible for enterprise risk management, and that includes cyber security, a subset of which is cloud-based cyber-security. Thus it is important for directors to have a basic understanding of the risks involved in cloud-based data storage systems, and with cloud-based storage providers. Below are a few basic questions that come to mind that a director could pose to management, and the company’s CISO and CIO:

1. Where will your data be stored geographically (which may determine which laws apply to the protection of the company’s data), and in what data centers?

2. Is there any type of customer data co-mingling that could potentially expose the company data to competitors or other parties?

3. What sort of encryption does the cloud-based provider use?

4. What is the vendor’s backup and disaster recovery plan?

5. What is the vendor’s incident response and notification plan?

6. What kind of access will you have to security information on your data stored in the cloud in the event the company needs to respond to a regulatory request or internal investigation?

7. How transparent is the cloud provider’s own security posture? What sort of access can your company get to the cloud provider’s data center and personnel to make sure it is receiving what it is paying for?

8. What is the cloud servicer’s responsibility to update its security systems as technology and sophistication evolves?

9. What is the cloud provider’s ability to timely detect (i.e., continuously monitor) and respond to a security incident, and what sort of logging information is kept in order to potentially detect anomalous activity?

10. Are there any third party requirements (such as HITECH/HIPAA) that the provider needs to conform to for your industry?

11. Is the cloud service provider that is being considered already approved under the government’s FedRamp authorization process, which pre-approves cloud service providers and their security controls?

12. Finally, does the company’s cyber insurance liability policy cover cloud-based Losses assuming there is a breach and customer records are stolen or otherwise compromised? This is a very important question to ask, especially if the company involved is going to use a cyber-insurance policy as a risk transfer mechanism. When in doubt, a knowledgeable cyber-insurance broker should be consulted to make sure cloud-based Losses are covered.

High-profile breaches have proven conclusively that cybersecurity is a board issue first and foremost. Being a board member is tough work. Board members have a lot on their plate, including, first and foremost, financial reporting issues. But as high-profile breaches have shown, major cyber breaches have almost the same effect as a high profile accounting problem or restatement. They cause havoc with investors, stock prices, vendors, branding, corporate reputation and consumers. Directors should be ready to ask tough questions regarding cyber security and cloud-based security issues so they do not find themselves on the wrong end of a major data breach, either on the ground or in the cloud. »

La valeur stratégique du développement durable | Une enquête de McKinsey

Vous trouverez, ci-dessous, les résultats d’un Survey réalisé par la firme McKinsey* qui porte sur la valeur stratégique à accorder au développement durable et sur l’évolution de l’intérêt des entreprises pour cette dimension de la gouvernance.

Il s’agit ici d’un article très soigné qui présente les analyses de plusieurs facteurs qui contribuent aux changements stratégiques à long terme des organisations. L’intérêt de l’étude est qu’elle est de type comparatif puisque c’est un sujet de gouvernance que McKinsey étudie depuis plusieurs années.

Le tableau présenté dans cet extrait montre l’évolution des trois (3) principales raisons évoquées par les répondants pour investir dans le développement durable :

(1) l’alignement avec les objectifs d’affaires de l’entreprise

(2) l’amélioration de la réputation de l’organisation

(3) la réduction des coûts

Je vous invite donc à prendre connaissance de cet article de référence en matière de développement durable et de responsabilité sociale des entreprises.

Sustainability’s strategic worth: McKinsey Global Survey results

« Executives at all levels see an important business role for sustainability. But when it comes to mastering the reputation, execution, and accountability of their sustainability programs, many companies have far to go »

« Company leaders are rallying behind sustainability, and executives overall believe the issue is increasingly important to their companies’ strategy. But as it continues to grow into a core business issue, challenges to capturing its full value lie ahead. These are among the key findings from our most recent McKinsey survey on the topic,¹ which asked respondents about the actions their companies are taking to address environmental, social, or governance issues, the practices they use to manage sustainability, and the value at stake.

One such challenge is reputation management. Year over year, large shares of executives cite reputation as a top reason their companies address sustainability; of the 13 core activities we asked about, they say reputation has the most value potential for their industries. However, many of this year’s respondents say their companies are not pursuing the reputation-building activities that would maximize that financial value.

Comparing companies with the most effective sustainability programs (our sustainability “leaders”) with others in their industries highlights another obstacle: incorporating sustainability into key organizational processes, such as performance management, one area where the leaders report better results than others. Beyond strong performance on processes, the leaders share other characteristics that are keys to a successful sustainability program—among them, aggressive goals (both internal and external), a focused strategy, and broad leadership buy-in.

Sustainability rising

According to executives, sustainability is becoming a more strategic and integral part of their businesses. In past surveys, when asked about their companies’ reasons for pursuing sustainability, respondents most often cited cost cutting or reputation management. Now 43 percent (and the largest share) say their companies seek to align sustainability with their overall business goals, mission, or values²—up from 30 percent who said so in 2012 (Exhibit 1).

Exhibit 1

More and more companies are addressing sustainability to align with their business goals

One reason for the shift may be that company leaders themselves believe the issue is more important. CEOs are twice as likely as they were in 2012 to say sustainability is their top priority. Larger shares of all other executives also count sustainability as a top three item on their CEOs’ agendas ».

___________________________________________________

* The contributors to the development and analysis of this survey include Sheila Bonini, a senior expert in McKinsey’s Silicon Valley office, and Anne-Titia Bové, a specialist in the São Paulo office.

Le mentorat, une démarche précieuse pour préparer la relève | En rappel

Debra Wheatman* a publié un billet intéressant dans CEO.com qui fait l’éloge du mentorat en vue de mieux réussir le processus de préparation de la relève du président et chef de direction (PCD, CEO).

Une firme de recrutement au niveau mondial, InterSearch Worldwide, a montré que seulement 45 % des organisations avait un processus de planification de la relève du premier dirigeant !

L’auteure propose de mettre en place un plan de mentorat à l’échelle de toute l’organisation et elle expose les avantages pressentis d’une telle démarche.

Pour elle, le mentorat est bénéfique pour le raffermissement de la culture, la croissance et la viabilité de l’organisation.

Voici un extrait de ce court article. Bonne lecture !

Getting A CEO Succession Right

Mentoring Provides a Foundation for Positive Performance

Given the dynamic and changing business environment in which we all work, there are many instances in which people with little to no experience are required to assume new responsibilities and adapt to rapidly changing business situations. Oftentimes, these people are asked to do things that are unfamiliar and represent unchartered territory.

Pairing these individuals with senior executives with the expertise and organizational knowledge can help more inexperienced staff develop the skills and expertise to be effective and grow within the organization. By working with a mentor, a mentee will be able to develop a positive work approach and be motivated to assume increasing responsibility, with the resulting impact being strong job performance, productivity and confidence.

Mentoring Supports a Culture of Learning and Knowledge Transfer

The ongoing health and wellness of any organization is largely predicated on ensuring employees are equipped to add continuous value. Providing staff with the means to acquire the knowledge and skills to be effective supports short- and long-term goals for learning and sets the tone for organization-wide knowledge distribution. By encouraging knowledge transfer efforts, the foundation of learning is established.

Mentoring programs also serve to empower employees, promoting a culture of inclusivity where people are encouraged to communicate, fostering productivity and a focus on achieving corporate goals.

Mentoring is Key for Developing Future Leaders

One of the key benefits of a robust mentoring program is that it helps to provide a solid training ground for future leaders. One of the things that employees desire when they join an organization is to have an understanding of opportunities for upward mobility and growth.

With a well-developed mentoring program, employees can review their career goals and pursue advancement opportunities. The partnerships established from the program helps employees understand what they need to do to progress within the organization. The assistance from a mentor can help propel employees forward, providing a strong foundation of commitment and drive for success.

Mentoring Leads to Increased Employee Retention

Mentoring increases employee retention because it sends a positive message that the organization cares about employees’ development into leadership roles. One of the things that can sometimes hinder growth is an employee’s inability to understand or embrace an organization’s corporate culture. With an active mentoring program, mentees are given the opportunity to navigate such intangibles, thereby increasing opportunities for long-term success.

Mentoring Increases Self-Awareness

One of the things that help people grow into effective leaders is the understanding of their own strengths and shortcomings. This can be a hard thing for a person to identify on his or her own. In a mentoring relationship, the mentee will be given feedback by the mentor as a means to conducting a thoughtful self-evaluation. Though it might be difficult, self-awareness is critical to understanding areas for improvement and is the first step in making meaningful changes that can positively impact career outcomes.

Mentoring Is a Great Idea Even If You Aren’t Going Anywhere Anytime Soon

Mentoring provides significant benefits both to you and your successor. As a teacher, you will have the opportunity to revisit past decisions, plans and re-assess the company’s goals and objectives. As your mentee asks tough questions about why things are the way they are, it will give you the chance to look at the past, present and future through a set of fresh eyes. Even if you don’t plan on going anywhere soon, mentoring and building your succession plan can dramatically improve the performance of you, your team and your organization.

*Career and personal branding expert Debra Wheatman is president and owner of Careers Done Write. She is globally recognized as an expert in advanced career search techniques, with more than 18 years’ corporate human resource experience helping clients make gratifying career choices.

En rappel | L’évaluation du CA et des administrateurs : 7 étapes à considérer

Cet article rédigé par Geoffrey KIEL, James BECK et Jacques GRISÉ (1) et paru dans les Documents de travail de la Faculté des sciences de l’administration en 2008, est toujours d’actualité. Il présente un guide pratique des questions clés que les conseils d’administration doivent prendre en considération lorsqu’ils planifient une évaluation.

On met l’accent sur l’utilité d’avoir des évaluations bien menées ainsi que sur les sept étapes à suivre pour des évaluations efficaces d’un conseil d’administration et des administrateurs. Bonne lecture.

SEPT ÉTAPES À SUIVRE POUR DES ÉVALUATIONS EFFICACES D’UN CONSEIL D’ADMINISTRATION ET DES ADMINISTRATEURS

Lorsqu’une crise se produit au sein d’une société, comme celles qu’ont connues Nortel et Hollinger International, les intervenants, les médias, les organismes de réglementation et la collectivité se tournent vers le conseil d’administration pour trouver des réponses. Étant donné que ce dernier est le chef décisionnel ultime de la société, il est responsable des actions et du rendement de la société.

Le défi actuel que doivent relever les conseils d’administration consiste à accroître la valeur des organisations qu’ils gouvernent. Grâce à l’évaluation du rendement, les conseils d’administration peuvent s’assurer qu’ils ont les connaissances, les compétences et la capacité de relever ce défi.

Plusieurs guides et normes de pratiques exemplaires reconnaissent cette notion. Ainsi, la Commission des valeurs mobilières de l’Ontario indique dans les lignes directrices sur la gouvernance des sociétés (NP 58-201) que « le conseil d’administration, ses comités et chacun de ses administrateurs devraient faire l’objet régulièrement d’une évaluation à l’égard de leur efficacité et de leur contribution ».

L’évaluation du conseil d’administration est trop souvent perçue comme un mal nécessaire – un processus mécanique consistant à cocher des points sur une liste qui, en bout de ligne, a peu de valeur réelle pour le conseil d’administration si ce n’est pour satisfaire aux exigences en matière de conformité. Toutefois… un processus efficace d’évaluation du conseil d’administration peut donner lieu à une transformation.

Une publication du Collège des administrateurs de sociétés (CAS), sous forme de questions et réponses sur la gouvernance, a été conçue à l’intention des administrateurs nommés par le gouvernement du Québec comme membre d’un conseil d’administration d’une société d’État ou d’un organisme gouvernemental. Celle-ci vise à répondre aux questions les plus courantes qu’un administrateur nouvellement nommé peut légitimement se poser en matière de gouvernance. On y indique qu’ « une évaluation faite à intervalles périodiques est essentielle pour assurer le maintien d’une gouvernance efficace » (2).

Cet article offrira une approche pratique en matière d’évaluations efficaces des conseils d’administration et des administrateurs en appliquant un cadre comportant sept étapes qui pose les questions clés que tous les conseils d’administration devraient prendre en considération lorsqu’ils planifient une évaluation. Même les conseils d’administration efficaces peuvent tirer profit d’une évaluation bien menée.

Comme nous l’avons résumé dans le tableau 1, une évaluation menée adéquatement peut contribuer considérablement à des améliorations du rendement à trois niveaux : organisation, conseil d’administration et administrateur. Selon Lawler et Finegold « les conseils qui évaluent leurs membres et qui s’évaluent ont tendance à être plus efficaces que ceux qui ne le font pas ». Toutefois, il faut souligner que ces avantages ne sont possibles qu’au moyen d’une évaluation du conseil d’administration menée de manière appropriée; si l’évaluation n’est pas faite correctement, cela peut causer de la méfiance parmi les membres du conseil d’administration et entre le conseil lui-même et la direction.

Une publication de l’École d’administration publique du Québec (ENAP), produite en collaboration avec le Collège des administrateurs de sociétés (CAS), présente une section traitant de l’évaluation de la performance du conseil d’administration (3).

Selon les auteurs, « L’évaluation est une composante essentielle d’une saine gouvernance d’entreprise. Elle permet de jeter un regard sur la façon dont les décisions ont été prises et sur la manière d’exercer la gestion des activités de l’organisation et ce, dans une perspective d’amélioration continue… Il incombe au président du conseil d’instaurer une culture d’évaluation du rendement et de la performance. Pour ce faire, il doit veiller à la mise en place d’un processus d’évaluation clair, à l’élaboration de règles et d’outils pertinents, à la définition des responsabilités de chaque intervenant dans le processus d’évaluation, à la diffusion de l’information et à la mise en place des correctifs nécessaires ». Dans cette publication, on présente dix outils détaillés d’évaluations (questionnaires) qui concernent les groupes cibles suivants :

1. l’évaluation du conseil

2. l’évaluation du fonctionnement du conseil

3. l’évaluation du président du conseil

4. l’évaluation d’un membre de conseil

5. l’évaluation du comité de gouvernance et d’éthique

6. l’évaluation du comité de vérification

7. l’évaluation du comité des ressources humaines

8. l’évaluation du fonctionnement d’un comité

9. l’évaluation d’un membre de comité

10. l’évaluation du président d’un comité

(1) Geoffrey Kiel, Ph.D., premier vice-chancelier délégué et doyen de l’École d’administration, University of Notre Dame, Australie, et président de la société Effective Governance Pty Ltd, James Beck, directeur général, Effective Governance Pty Ltd, Jacques Grisé, Ph.D., F.Adm.A., collaborateur spécial du Collège des administrateurs de sociétés (CAS), Faculté des sciences de l’administration, Université Laval, Québec.

(2) Collège des administrateurs de sociétés, Être un administrateur de sociétés d’état : 16 questions et réponses sur la gouvernance, Faculté des sciences de l’administration, Université Laval, 2007.

(3) ENAP, Les devoirs et responsabilités d’un conseil d’administration, Guide de référence, Bibliothèque et Archives nationales du Québec, 2007.

L’art d’établir des consensus au conseil d’administration | En rappel

Je vous invite à prendre connaissance de la lettre informative (Newsletter) du mois d’août 2014 de la firme de consultation The Brown Governance intitulée Consensus and Dissent.

Les auteurs traitent de la pratique de la décision par consensus, un sujet vraiment crucial pour la bonne gestion d’un conseil d’administration.

Voici un extrait de cette lettre. Vous pouvez vous inscrire par la recevoir à chaque mois.

Également, sur le site de Brown Governance, vous pourrez visionner une vidéo de David Brown qui explique la mécanique des huis clos afin d’éviter que ceux-ci traînent en longueur.

Brown Governance

Building Consensus by Addressing the Roots of Dissent

Boards today often strive to make decisions by consensus, which is both healthy and sustainable compared to forced votes; how to build consensus while honouring dissent is the subject of this Brown Governance newsletter. How Boards deal with dissent is one of the biggest changes in boardroom governance in the past generation – instead of ignoring, discouraging or quashing dissent, high performance boards seek to understand and deal with dissent. Here we will explore the typical roots of dissent as a tool to help Chairs and Board members to understand, identify and so address dissent more effectively:

Information gap

Knowledge gap

Direction gap

Strategy gap

Political gap

Personal gap

What is Consensus anyway?

Consensus does not necessarily mean unanimity. Consensus means reaching a point that different viewpoints have been listened to, and no one is going to stand in the way of us moving forward. Everyone “consents” to move forward, not necessarily everyone in agreement with the specific direction. “Consensus” comes from the Latin, “feeling together”. It may be that everyone is of one accord, or it may be that dissenting views have been dealt with to the satisfaction of the dissenters: consensus means “unity not unanimity”. Consensus decision-making is a group decision-making process that seeks the consent of all participants.

Consensus may be defined professionally as an acceptable resolution, one that can be supported, even if not the « favourite » of each individual. It may seem counter intuitive that two of the most visible trends in modern governance are to strive for decision-making by consensus rather than just a majority vote, and to encourage dissent and divergent views from the one being proposed.

Yet these two potentially conflicting forces can be brought into harmony, by exploring and better understanding the root causes behind the dissenting view, and using the most effective tool to address and deal with each, to bring the dissenter into the consensus. Here is how Board and Committee Chairs and Members can use this in practice during meetings:

Have the proposed solution (e.g. strategy, decision, problem or issue) presented briefly;

Invite Board members to express any additional or different perspectives;

Once these divergent views have been expressed, move on to convergent thinking (consensus building) by exploring the root causes of each divergent view (the Chair may need to “name” or explicitly articulate the divergent view since the stated dissent is often not the underlying cause), and proposing that each be dealt with based on addressing its root, including amending and revising the proposed solution;

Probe and test for consensus: do we have consent to move forward on this path?

En rappel | Le C.A. doit clarifier les rôles de chef de la conformité (CCO) et de chef des affaires juridiques (General Counsel)

On note une ambigüité de rôle croissante entre les fonctions de chef de la conformité (CCO) et de chef du contentieux (General Counsel). Cet article de Michael W. Peregrine, associé de la firme McDermott Will & Emery vise à souligner les responsabilités réciproques de chaque poste ainsi qu’à montrer que celles-ci ont intérêt à être mieux définies afin d’éviter les risques de conflits associés à leur exécution.

L’auteur suggère que le rôle de chef de la conformité prend une place de plus en plus prépondérante dans la structure des organisations, en vertu du caractère « d’indépendance » rattaché à cette fonction. Les deux postes doivent donc être dissociés, le chef du contentieux se rapportant au PDG et le chef de la conformité se rapportant au conseil d’administration !

L’article insiste sur une meilleure description de ces deux postes et sur le rôle que doit jouer le conseil d’administration à cet égard.

Je vous invite à lire ce court article paru sur le blogue du Harvard Law School Forum on Corporate Governance afin de mieux connaître la nature des arguments invoqués. Bonne lecture !

Compliance or Legal? The Board’s Duty to Assure Clarity

Key Developments

Government Positions. The first, and perhaps most pronounced, of these developments has been efforts of the federal government to encourage (and, in some cases, to require) that the positions of compliance officer and general counsel be separate organizational positions held by separate officers; that the compliance officer not report to the general counsel; and that the compliance officer have a direct reporting relationship to the governing board.

There also appears to be a clear trend—while certainly not universal—among many corporations to follow the government’s lead and adopt the “separate relationship” structure, for a variety of valid and appropriate reasons. Yet, the focus on compliance officer “independence” obscures the need for compliance programs to have leadership from, coordination of or other connection to, the general counsel.

Another concern arises from the (dubious) perspective that the compliance officer should not have a reporting relationship to the general counsel. One of the underlying premises here is that the general counsel somehow has at least a potential, if not actual, conflict of interest with respect to advice that the compliance officer may provide to management or the board. However, this perspective ignores critical professional responsibility obligations of the general counsel (e.g., Rules 1.6, 1.7 and 1.13).

The third, and potentially most significant of these potential concerns relates to the preservation of the attorney-client privilege when the chief compliance officer is not the general counsel. In a recent published article, a leading corporate lawyer argues persuasively that the forced separation of the compliance and legal functions jeopardizes the ability to preserve the privilege in connection with corporate compliance based investigations.

Corporate Guardian. A second, and more subtle, development has been a series of public comments by compliance industry thought leaders suggesting that the role of “guardian of the corporate reputation” is exclusively reserved for the corporate compliance officer; that the compliance officer is the organizational “subject matter expert” for ethics and culture, as well as compliance. This “jurisdictional claim” appears to be premised on the questionable perspective that “lawyers tell you whether you can do something, and compliance tells you whether you should”.

This perspective ignores the extent to which the general counsel is specifically empowered to provide such advice by virtue of the rules of professional responsibility; principally Rule 2.1 (“Advisor”). It is also contrary to long standing public discourse that frames the lawyer’s role as a primary guardian of the organizational reputation. For example, the estimable Ben Heineman, Jr. has described the role of the general counsel as the “lawyer-statesman”, the essence of which is the responsibility to “move beyond the first question—‘is it legal?’—to the ultimate question—‘is it right?’”

Job Descriptions. The third significant development is efforts by compliance industry commentators to extend the portfolio of the CCO, to a point where it appears to conflict with the expanding role of the general counsel. As one prominent compliance authority states, “The CCO mandate is ambitious, broad, and complex; no less than to oversee the organization’s ability to ‘prevent and detect misconduct’”.

This point of view is being used to justify greater compliance officer involvement in matters such as internal investigations, corporate governance, conflict of interest resolution, the development of codes of ethics, and similar areas of organizational administration.

The debate over roles and responsibilities is exacerbated by the extent to which the term “compliance” continuously appears in the public milieu in the form of “shorthand”. In this way, the term appears to reference some sort of broad organizational commitment to adherence with applicable law; i.e., more as a state of corporate consciousness than as an executive-level job description. To the extent that “compliance” is used loosely in the business and governance media, it serves to confuse corporate leadership about the real distinctions between accepted legal and compliance components.

Expansive definitions of the compliance function are also at odds with new surveys that depict the expanding organizational prominence of the general counsel. These new surveys lend empirical support to the view that the general counsel of a sophisticated enterprise (such as a health care system) has highly consequential responsibilities, and thus should occupy a position of hierarchical importance within the organization.

The Board’s Role

As developments cause the roles and responsibilities of the compliance officer and the general counsel to become increasingly blurred, the board has an obligation to establish clarity and reduce the potential for organizational risk. The failure to clearly delineate the respective duties of these key corporate officers can create administrative waste and inefficiency; increase internal confusion and tension; jeopardize application of the attorney-client privilege, and “draw false distinctions between organizational and legal risk”.

An effective board response would certainly include directing the compliance officer and general counsel, with the support of the CEO and outside advisors, to prepare for board consideration a set of mutually acceptable job descriptions for their respective positions. This would include a confirmation of the board reporting rights of both officers. It would also include the preparation of a detailed communication protocol that would address important GC/CCO coordination issues.

The perceptive board may also wish to explore, with the support of external advisors, the very sensitive core issues associated with compliance officer independence, and with the hierarchical position of the compliance officer; i.e., should that position be placed in the corporate hierarchy on an equal footing with the corporate legal function, or in some subordinate or other supporting role.

The board can and should be assertive in adopting measures that support the presence of a vibrant, effective compliance program that teams productively with the general counsel.

La sauvegarde des grands principes de gouvernance : le mirage du changement | En rappel

Voici un article qui présente la conduite des actionnaires activistes comme relativement symbolique, c’est-à-dire exempte de véritables enjeux critiques, paru récemment sur le blogue du Harvard Law School Forum on Corporate Governance.

Les auteurs Marcel Kahan et Edward Rock, professeurs de droit des affaires à l’Université de Pennsylvanie, ont observé que l’ensemble des positions des différents acteurs (actionnaires, activistes, administrateurs, dirigeants …) renforcent les grands principes de la gouvernance corporative en limitant les effets trop drastiques de leurs actions, tout en préservant l’intérêt des principaux protagonistes.

Les revendications des activistes, du point de vue de la gouvernance, sont largement symboliques et ont pour résultats la préservation de la primauté d’une « gouvernance orientée vers les intérêts des actionnaires », une gouvernance qui met l’accent sur les besoins des actionnaires.

La synthèse de l’article est présentée clairement au dernier paragraphe du texte ci-dessous. Quel est votre opinion à ce sujet ?

Croyez-vous que les manœuvres des activistes et des dirigeants donnent lieu à peu de changements significatifs et que celles-ci consistent surtout à renforcer le point de vue d’une gouvernance centrée sur le pouvoir des actionnaires plutôt que sur le pouvoir du conseil d’administration ?

Bonne lecture ! Vos commentaires sont appréciés.

Symbolic Corporate Governance Politics

Corporate governance politics display a peculiar feature: while the rhetoric is often heated, the material stakes are often low. Consider, for example, shareholder resolutions requesting boards to redeem poison pills. Anti-pill resolutions were the most common type of shareholder proposal from 1987–2004, received significant shareholder support, and led many companies to dismantle their pills. Yet, because pills can be reinstated at any time, dismantling a pill has no impact on a company’s ability to resist a hostile bid. Although shareholder activists may claim that these proposals vindicate shareholder power against entrenched managers, we are struck by the fact that these same activists have not made any serious efforts to impose effective constraints on boards, for example, by pushing for restrictions on the use of pills in the certificate of incorporation. Other contested governance issues, such as proxy access and majority voting, exhibit a similar pattern: much ado about largely symbolic change.

What accounts for this persistent gap between rhetoric and reality? In our article, Symbolic Corporate Governance Politics, we consider several explanations drawn from “public interest” and “public choice” perspectives. Ultimately, we conclude that Thurman Arnold’s “symbolic” view of politics, developed in his magnum opus, The Folklore of Capitalism, complements these explanations to provide a fuller understanding.

From a “public interest” perspective, the pursuit by shareholder activists of reforms with minimal direct impact can be rationalized in a number of ways. For one, the cost of such activism is low, both in relation to the value of public companies and in relation to the portfolio on institutional investors. Moreover, even largely symbolic reforms can have a larger indirect impact: they may educate investors, directors, and managers about the importance of shareholder-centric governance; they may serve as show of strength of shareholder power and thereby lead directors, managers, and policy makes to pay more attention to shareholder interests; or they may be a first step in a longer battle for more meaningful reform.

From a “public choice” perspective, shareholder activists may pursue activism for its own sake, to keep themselves busy (and employed). And even if the stakes are low, pro-management forces may oppose meaningless changes to prove loyalty to their clients and generate business.

These explanations, however, leave several questions unanswered: Why the heated rhetoric? What explains the selection of the largely symbolic issues that are being pursued? If these issues are (wrongly) depicted as important, won’t their pursuit divert energy from other issues that are more consequential?

Thurman Arnold’s theory of the role of symbols, myth, and folklore can provide some answers. As a society, Arnold would argue, we need to believe that managers are held accountable even—and especially—in the largest corporations. It is only because “shareholders” exercise ultimate control over managers that it is acceptable that a small group of managers control huge concentrations of capital and get paid princely sums for doing so. This creates a tension. On the one hand, individual shareholders do not, in fact, play that role. On the other hand, large concentrations of capital are necessary for many businesses operating in world product and capital markets. It thus becomes necessary to develop a procedure for reconciling the ideal with practical reality by constantly attacking “the separation of ownership and control” on rational legal and economic ground, while at the same time never really interfering with it. The battles over shareholder power fulfill this function.

But to serve the ceremonial function of asserting shareholder control, shareholder activists must pick issues where the chances of success are reasonably high. Symbolic activism thus serves everyone’s interests. For shareholder activists, who lack strong monetary incentives that directly reward them for increasing share values, symbolic affirmations of shareholder power has allure and is likely to be supported by other shareholders. For managerialists, losing is acceptable and actual (as opposed to rhetorical) resistance is not too high. Activism keeps the activists busy. Plausible arguments for shareholder benefit, combined with low potential costs, assure little internal opposition.

Our analysis has several implications for governance debates. First, the rhetoric used by activists on all sides should be taken with a large pinch of salt: most issues described as momentous generally are not. Second, one should be aware that symbolic battles may divert attention (for better or for worse) from more meaningful reform. Third, shareholder activists and managers and their defenders all have more complex motivations than maximizing firm value or protecting privileges. Rather than epic battles between the forces of good and evil, governance debates typically involve disputes between different shades of grey. Finally, looking out through Thurman Arnold’s eyes, one may observe all the battles and conclude that we live, if not in the best of all possible worlds, then at least in a pretty good one. Despite the back and forth, corporate governance in the U.S. is characterized by a high degree of stability and slow paced, gradual change. Because we ritually affirm the principle of shareholder control—maintained by the symbolic, and largely harmless, disputes we have discussed in this article—the current system of corporate governance enjoys widespread support. Shareholder activism, rather than undermining the legitimacy of the current system, serves an important, legitimating function by showing that shareholders have power and that reform for the better is possible.

The full paper is available for download here.

Pour une supervision efficace de la fonction audit interne | En rappel

Vous trouverez ci-dessous un document de référence publié par PwC et paru dans la série Audit Committee Excellence. Ce document, partagé par Denis Lefort, CPA, CIA, CRMA, expert-conseil en Gouvernance, audit et contrôle, apporte des réponses très complètes à plusieurs questions que les membres de conseils d’administration se posent eu égard au rôle de la fonction audit interne dans l’organisation.

1. Pourquoi la surveillance de l’audit interne est-elle critique pour les comités d’audit ?

2. Quel est le rôle des administrateurs dans l’optimisation des activités de l’audit interne ?

3. Comment aider l’audit interne à mieux définir sa mission ?

4. Quelles sont les lignes d’autorité et les besoins en ressources de cette activité ?

5. Quel est le processus de révision des résultats de l’audit interne ?

6. Que faire si votre entreprise ne possède pas une fonction d’audit interne ?

Ce document sera donc très utile à tout administrateur soucieux de parfaire ses connaissances sur le rôle très important qu’un service d’audit interne peut jouer.

Voici une introduction au rapport de PwC . Bonne lecture ! Vos commentaires sont les bienvenus.

Effective oversight of the internal audit function | PwC

The audit committee’s role is not getting any easier, but an audit committee has a lot of resources in its arsenal to help meet today’s high expectations. One of these tools is the internal audit function. Directors can, and should, focus on maximizing the value proposition of this group to ensure their own success.

A lot goes on in companies — and a lot can go wrong, even when you have good people and thoughtfully designed processes. That’s why so many audit committees look to internal audit as their eyes and ears — a way to check whether things are working as they should. Some companies staff the function internally, while others choose to outsource some or all of the role. Some do not have an internal audit function at all.

For many audit committees, overseeing internal audit isn’t just the right thing to do, it’s a requirement. At NYSE companies, audit committees have to oversee internal audit’s performance and periodically meet in private sessions. NASDAQ is currently considering whether to require its listed companies to have an internal audit function and what role audit committees should play.

Whether a required function or not, we believe it’s critical that audit committees focus on internal audit. Why? PwC’s 2014 State of the internal audit profession study found that about one-third of board members believe internal audit adds less than significant value to the company, and only 64% of directors believe internal audit is performing well at delivering expectations. Even Chief Audit Executives (CAEs) are critical of their functions’ performance, with just two-thirds saying it’s performing well.

Indicateurs de mesure d’un « bon » conseil d’administration | Quelques éléments à considérer

Aujourd’hui, je vous propose la lecture d’un excellent article de Knud B. Jensen, paru dans le numéro Juillet-Août 2014, du Ivey Business Journal, section Governance.

L’auteur a fait une analyse attentive des études établissant une relation entre l’efficacité des « Boards » et les résultats financiers de l’entreprise. Sa conclusion ne surprendra pas les experts de la gouvernance car on sait depuis un certain temps que la plupart des études sont de nature analytique et que les relations étudiées sont associatives, donc de l’ordre des corrélations statistiques.

Mais, même les résultats dits scientifiques (empiriques), n’apportent pas une réponse claire aux relations causales entre l’efficacité des conseils d’administration et les résultats attendus, à court et long terme … Pourquoi ?

L’auteur suggère qu’un modèle de gouvernance ne peut être utilisé à toutes les sauces, parce que les organisations évoluent dans des contextes (certains diront univers) éminemment différents !

L’analyse fine de l’efficacité des C.A. montre que les variables contextuelles devraient avoir une place de choix dans l’évaluation de l’efficacité de la gouvernance.

La gouvernance est une discipline organisationnelle et son analyse devrait reposer sur les « théories organisationnelles, tels que le design, la culture, la personnalité et le leadership du PDG (CEO), ainsi que sur les compétences « contextuelles » des administrateurs ». C’est plus complexe et plus difficile que de faire des analyses statistiques … ce qui n’empêche pas de poursuivre dans la voie de la recherche scientifique.

Voici un extrait de cet article. Je vous invite cependant à le lire au complet afin de bien saisir toutes les nuances.

Bonne lecture ! Vos commentaires sont grandement appréciés.

Reconceptualizing the board and its metrics

« The key to rating boards is understanding context. Most researchers and public policies assume a similar board system across industries. This assumption allows law makers and researchers to ignore inter-company board differences. Nevertheless, board functions and effectiveness must reflect the context in which an organization finds itself. After all, board processes and functions are clearly dependent on context (growth or the lack of it, competition, strategy or the lack of it, etc.). For example, after it became very clear that the functioning of the board of directors at Canadian Pacific was no longer suitable to drive company growth, an activist shareholder pushed for new directors and a reorganized board. This led to a dramatic increase in cost ratios, profit and share price. It changed the function of the board. Other illustrations where context called for a change of the board include BlackBerry (formerly RIM) and Barrick Gold….

When it comes to an effective governance model, one size does not fit all. Context is paramount. Context is both endogenous and exogenous. Endogenous variables include complexity, asset base, competitive advantage, capital structure, quality of management, and board culture and leadership. Exogenous variables include industry structures, position in growth cycle, competitive force, macroeconomics (interest rate, commodity pricing), world supply and growth, political changes, and unforeseen events (earthquakes, tsunamis, etc.). These variables are key inputs for company performance and determine whether earnings are above or below average. Simply put, companies may need a different type of board to fit with different sets of endogenous and exogenous variables.

Boards and management typically have different mandates, not to mention a different social architecture to carry them out. It is generally agreed that the CEO and the management teams run the firm, while the board approves strategy, selects the CEO and determines the incentives, sets risk management, and approves major investments and changes to the capital structure. But as discussed in Boards that Lead (2014) by Ram Charan, Dennis Casey and Michael Useen, directors must also lead the corporation on the most crucial issues. As a result, the ideal level of board involvement remains a grey area and is rarely defined. Setting boundaries when there are overlapping responsibilities is difficult. Nevertheless, how the functional relationships between the board and management work is probably far more important than board features to the growth, and sometimes survival, of the organization.

In Back to the Drawing Board (2004), Colin Carter and Jay Lorsch suggest the reason so little has resulted from the various reforms aimed at improving governance is the focus on visible variables, or what others have labeled structural issues, instead of a focus on process or inside board behavior. In other words, features have trumped functions.

The increase in complexity may be another issue. Keep in mind that directors don’t spend a lot of time together, which is a barrier to good behavior and process and makes it difficult for boards to function as a dynamic team. According to a 2013 McKinsey survey of over 700 corporate board members, directors spend an average of 22 days per year on company issues and two thirds do not think they have a complete understanding of the firm’s strategy. Clearly, there are severe limitations on boards, which have more to do than time available, especially with their limited number of board meetings packed with presentations from management.

Boards should be viewed as an organizational system, with context part of any performance judgment. This view has more merit in distinguishing between effective and ineffective boards than the structural view. Human resource metrics may hold more promise and be more important than the structural indices currently used to distinguish between effective and ineffective boards. »

________________________________________________________

*Knud B. Jensen est professeur d’administration à Ryerson University’s Ted Rogers School of Management de Toronto.

L’état des travaux de recherche relatifs à la contribution des investisseurs activistes | En rappel

Ainsi que mon billet du 19 août 2014 en faisait état, le débat est de plus en plus vif en ce qui regarde la contribution des « Hedge Funds » à l’amélioration de la performance à long terme des entreprises ciblées.

Vous trouverez, ci-dessous, un court billet de Martin Lipton, partenaire fondateur de la firme Wachtell, Lipton, Rosen & Katz, paru sur le site du Harvard Law School Forum on Corporate Governance, qui décrit la problématique et les principaux enjeux liés au comportement des investisseurs « activistes ».

L’auteur accorde une grande place aux travaux d’Yvan Allaire et de François Dauphin de l’IGOPP (Institut sur la Gouvernance d’Organisations Privées et Publiques) qui pourfendent l’approche économétrique de la recherche phare de Bebchuk-Brav-Jiang.

Le résumé ci-dessous relate les principaux jalons relatifs à cette saga !

The post puts forward criticism of an empirical study by Lucian Bebchuk, Alon Brav, and Wei Jiang on the long-term effects of hedge fund activism; this study is available here, and its results are summarized in a Forum post and in a Wall Street Journal op-ed article. As did an earlier post by Mr. Lipton available here, this post relies on the work of Yvan Allaire and François Dauphin that is available here. A reply by Professors Bebchuk, Brav, and Jiang to this earlier memo and to the Allaire-Dauphin work is available here. Additional posts discussing the Bebchuk-Brav-Jiang study, including additional critiques by Wachtell Lipton and responses to them by Professors Bebchuk, Brav, and Jiang, are available on the Forum here.

The Long-Term Consequences of Hedge Fund Activism

The experience of the overwhelming majority of corporate managers, and their advisors, is that attacks by activist hedge funds are followed by declines in long-term future performance. Indeed, activist hedge fund attacks, and the efforts to avoid becoming the target of an attack, result in increased leverage, decreased investment in CAPEX and R&D and employee layoffs and poor employee morale.

Several law school professors who have long embraced shareholder-centric corporate governance are promoting a statistical study that they claim establishes that activist hedge fund attacks on corporations do not damage the future operating performance of the targets, but that this statistical study irrefutably establishes that on average the long-term operating performance of the targets is actually improved.

In two recent papers, Professor Yvan Allaire, Executive Chair of the Institute for Governance of Private and Public Organizations, has demonstrated that the statistics these professors rely on to support their theories are not irrefutable and do not disprove the real world experience that activist hedge fund interventions are followed by declines in long-term operating performance. The papers by Professor Allaire speak for themselves:

“Activist” hedge funds: creators of lasting wealth? What do the empirical studies really say?

Hedge Fund Activism and their Long-Term Consequences; Unanswered Questions to Bebchuk, Brav and Jiang

Le laxisme et la passivité des Boards UK | Qu’en est-il au Canada ?

Vous trouverez, ci-dessous, l’extrait d’un article très pertinent publié par Dina Medland , laquelle couvre le domaine de la gouvernance dans Forbes, qui fait état d’une entrevue conduite avec le professeur de Gouvernance Andrew Kakabadse, de la Henley Business School de Grande-Bretagne.

L’article met le doigt sur le conservatisme (et le traditionalisme) crasse des administrateurs qui siègent sur les conseils d’administration en Grande-Bretagne.

L’attitude de non-intervention de plusieurs administrateurs conduit à un sérieux manque d’innovation dans la gouvernance des entreprises anglaises (UK).

Trouve-t-on le même laxisme et la même résistance aux changements dans nos organisations nord-américaines ?

Personnellement, je ne crois pas que ce soit à la même échelle mais les conseils d’administration souffrent beaucoup du manque de questionnement de leurs membres. Il y a, ici aussi, trop de passivité eu égard aux questions d’orientation de l’entreprise ainsi qu’aux actions de la direction.

Je vous invite donc à lire ce court article et à partager votre point de vue sur la situation qui règne au Canada. Bonne lecture !

There Is A Crying Need For Innovation In Boardrooms

Andrew Kakabadse has built a reputation for sharp, insightful commentary on the boardrooms of publicly listed companies. Professor of Governance and Leadership at Henley Business School since last summer, he has spoken out before now on the declining worth of non-executive directors.

In an interview with me in April 2013, he suggested many non-executive directors in the UK’s boardrooms were ‘of little or no value to the business.’ Particularly scathing about the UK, he said : “We have a culture where we don’t ask questions.”

We also have a boardroom culture in the UK where we believe that “if it has worked fine for hundreds of years, why change it?” It is part and parcel, it seems of a national love of ritual – at which we clearly excel. The world’s love for very British celebrations -often involving members of the Royal family, horses, logistical feats of military planning and discipline and split-second timing- bears testimony to that. But the flip side of that seems to be that innovation is both rare, and resisted.

It is worth noting, therefore, that ICSA, the professional body for company secretaries – who are required for listed companies in the UK – chose Professor Kakabadse to undertake a piece of research on The Company Secretary, with a view to finding a way to progress the value of the role. (Note: for transparency, the software arm of ICSA which provides technology solutions for the boardroom is the commercial sponsor of my blog Board Talk but has no editorial control on input).

“On average, UK boards consist of 9 to 11 members, if whom the majority are over the age of 50. Fewer than half of these board members had had a job description and the chairman is very likely to be white, male and over the age of 60. Barriers to diversity remain firmly set throughout most boardrooms in the country” says the report.

It says the management and governance realities of boards indicate “animosity, a lack of intimacy with strategy, and poor communication” when it comes to top team strategy. Board and executive relations are “non-cohesive” when it comes to “shaping/negotiation of strategy, open interaction and trust.” Board members are described as “out of touch” – with “reality, markets and employees, unclear member role and contribution, productivity of meetings, engagement with the executive.”

……

Quelques mythes persistants à propos de la culture de gouvernance | En rappel

Vous trouverez, ci-dessous, un article tout à fait pertinent et intéressant, paru sur le site de INC.COM et publié par le Young Entrepreneur Council.

Voici onze (11) affirmations, ou mythes, à propos de la culture organisationnel et comment les administrateurs de sociétés peuvent tirer profit de ces enseignements.

Bonne lecture !

« Culture is a manifestation of your company’s values, and it impacts everything from talent recruiting to innovation. Unfortunately, some founders and CEOs, especially at early-stage startups, confuse culture with perks or, worse, believe that defining a company’s culture is a task best left up to someone else. Eleven founders from the Young Entrepreneur Council (YEC) call out the most persistent culture myths–and what you can do to overcome them »

11 Stubborn Myths About Company Culture

1. Perks = Culture

« Many startup founders mistakenly think that fun perks automatically make for a good culture. Don’t get me wrong–happy hours, Ping-Pong tables and catered lunches are great, but they’re not going to keep employees happy unless you work to create a fundamental culture of respect. It’s a lot easier to provide perks than it is to make sure that employees feel motivated and valued. » —Jared Feldman, Mashwork

2. Culture Doesn’t Start With You

« Most CEOs don’t realize that they are defining the culture by how they are behaving. Snap at people often? Anger will become part of your culture. Undermine your staff? Bureaucracy will invade your culture. Pretend everything is always amazing? You’ll create a culture full of fakes. If you want a culture that is always evolving and becoming more beautiful, invest in doing so yourself. » —Corey Blake, Round Table Companies

3. Employee Feedback Isn’t Important

« Some CEOs do not treat employee feedback as if it was as important as their own thoughts, because they are not viewed as equals. Though it is clear a CEO’s role is more expansive then other positions, the culture of a company can be negatively affected if people’s ideas and thoughts are suppressed. Each employee has a unique view of the organization, and the culture of sharing views is important to the company’s success. » —Phil Chen, Systems Watch

4. Remote Work Doesn’t Impact Culture

« I’ve worked for several companies remotely for years, and none of them have worked out long term. You always have things going on, and you are never as productive as when you’re together in a group. Working with others next to you is the best way for your company culture to grow. If you have to work remotely, find a way to get to the office at least twice a week to improve culture. » —John Rampton, Adogy

5. Someone Else Owns It

« They assume it’s someone else’s problem to deal with. HR doesn’t own culture. Employees don’t own culture. Everyone owns culture, and senior leaders have an enormous impact on how business gets done in the day-to-day. CEOs who don’t understand this are destined to live with whatever they get. CEOs who do understand their roles are better equipped to be intentional about the culture they create in ways that drive performance. »–Chris Cancialosi, GothamCulture

6. Culture Doesn’t Need to Be Defined

« Chris Wood of Paige Technologies says it best, ‘Organizations are really only a representation of the people in them; employers must be diligent about mapping culture.’ Products and services can be duplicated, but people can’t. Your people drive your culture and they are the one defining difference of a company. CEOs forget to understand and define the culture that they have in place early on. » —Jason Grill, JGrill Media | Sock 101

7. Culture Is Just a Set of Values

« We help many growing companies build culture, and the one thing most CEOs get wrong is forgetting to operationalize it. Culture isn’t just a set of core values on the wall–it’s a set of consistent behaviors. You have to be clear what those values look like in practice (we call them work rules) so current and future employees see culture in action and understand how works gets done in the company and align the company to them. » —Susan LaMotte, Exaqueo

8. Culture Only Matters When You Reach X Size

« Most CEOs think they don’t have to worry about company culture until their business meets certain profit or growth margins. In reality, company culture is affecting your bottom line regardless of your margins. I’ll say it again: Your company’s culture is inextricable from your company’s success. Focus on hiring the right people and offering them a place to thrive. With the wrong staff or an unmotivated staff, your company will go nowhere. » —Sean Kelly, HUMAN

9. You Can’t Hire for Culture

« You have to carefully select the type of people you add to your team if you’re going for a particular culture. For instance, if you’re a fashion company, you probably want to hire people that are actually passionate about fashion. It’s good to have people with different ideas, but generally they should have a shared common interest. With that shared interest, you can build a culture that your team members and customers can get behind. » —Andy Karuza, Brandbuddee

10. Compensation Is the Only Motivator

« Once they reach a certain salary, most non-sales employees could honestly care less about additional compensation. Employees work to feel needed, so remind them that they are your company. Recognize them, and make it public recognition. » —Justin Gray, LeadMD

11. Culture Will Wait for You to Create It

« The interesting thing about a company culture is that it will create itself if you don’t create it first. CEOs need to define and personify the company culture and instill it at every level of the organization. The best companies all have a culture based on their mission, and all employees know why they’re working so hard. When the opposite is true, the culture will create itself–and it may not be the culture you envisioned. » —Andrew Thomas, SkyBell Technologies, Inc.

Les devoirs des administrateurs selon la règlementation du Royaume-Uni (UK)

Aujourd’hui, je prends l’initiative de vous présenter un résumé de la règlementation UK eu égard aux devoirs des administrateurs de sociétés, accompagnée d’une explication de David Doughty*, expert en gouvernance, sur les sept (7) principaux devoirs de ceux-ci.

Il n’y a rien de bien nouveau quant aux responsabilités qui incombent aux administrateurs en Grande-Bretagne. En fait, le UK Company Act date de 2006 et on y trouve une description claire, et toujours d’actualité, des fonctions d’administrateurs qui s’appliquent autant aux indépendants qu’aux non-indépendants (plus particulièrement, les membres de la hautes direction qui siègent au conseil).

Ce texte est tiré d’un récent billet paru sur le blogue de David Doughty. Bonne lecture !

Les devoirs des administrateurs selon la description de la règlementation UK

The 2006 Companies Act, which set out to streamline and simplify UK Company law, ended up being one of the largest pieces of legislation ever written!

However, it did, for the first time, specify exactly what a Company Director’s duties are (which apply equally to both Executive and Non-Executive Directors), as follows:

To act within powers

To promote the success of the company

To exercise independent judgement

To exercise reasonable care, skill and diligence

To avoid conflicts of interest

Not to accept benefits from third parties

To declare interest in proposed transaction or arrangement with the company

To take them one by one – To act within powers – how does a director know what powers he or she is required to act within?

A good place to start is the Articles of Association (previously known as the Memorandum and Articles or ‘Mem and Arts’) – when was the last time you looked at these? When did your board last review them to make sure that they are still appropriate? These, together with any shareholder agreements, contracts, covenants and other items form the company’s constitutional documents which define your powers as a director.

If you haven’t looked at these for a while, or worse still, have never looked at them, then ask your Company Secretary for copies as soon as possible.

Next – To promote the success of the company – prior to the 2006 Act it used to be the case that company directors were responsible to shareholders and providing they endeavoured to ensure a decent return on the shareholders investment then they were complying with their duties.

Following the ‘unacceptable face of capitalism’ scandals of Lonrho and Slater Walker in the 1970s and the corporate failures of the ’80s leading to the Cadbury Report and the UK Corporate Governance Code it became clear that company directors had much wider duties which are now enshrined in the 2006 Companies Act, especially in respect of promoting the success of the company.

To promote the success of the company – having regard (amongst other matters) to:

The likely consequences of any decision in the long term;

The interests of the company’s employees;

The need to foster the company’s business relationships with suppliers, customers and others;

The impact of the company’s operations on the community and the environment;

The desirability of the company maintaining a reputation for high standards of business conduct; and

The need to act fairly as between the members of the company

Clearly, the new act, which applies equally to Executive and Non-Executive company directors in the UK, establishes a legal duty for directors to avoid short-termism in their strategic decision making and take into account the legitimate interests of their staff, suppliers, customers, the community and the environment as well as their shareholders.

With regard to the need To exercise independent judgement – it is important that, regardless of job title or board role or independence, all directors come to the boardroom table as equals, with joint and several liability for the decisions that they make and that they are not unduly swayed or influenced in making those decisions.

All directors are expected To exercise reasonable care, skill and diligence – which means that they should devote sufficient time to their role (which limits the number of directorships any individual may hold) and come to every board meeting well prepared, having read all the board papers and where possible, having had off-line conversations with fellow directors about key strategic matters.

Turning up to board meetings late and trying to read the papers during the meeting for the first time is unlikely to lead to an effective contribution to decision making or a satisfactory discharge of your duties as a company director.

Holding more than one board position or running your own business whilst serving on the board of another company are likely to compromise your legal duty To avoid conflicts of interest – whilst it is not always possible to avoid conflicts of interest, you should be aware of the possibility and alert the board when conflicts are likely to occur.

A well run board will have a Register of Interests, which will be reviewed annually, containing a list of all directors’ outside interests. The standing agenda for each board meeting should include an item for Declarations of Interests, at which point directors should declare if they have an interest in an agenda item. Often, if this is the case, the director will formally leave the meeting whilst the matter is being discussed and will only re-join once a decision has been made.

All directors should be aware of the requirement Not to accept benefits from third parties – compliance with this aspect of the act can be demonstrated by maintaining a Gifts and Hospitality register and ensuring that there is a company-wide policy on entertainment paid for by third parties.

Finally, directors need to comply with the requirement To declare interest in proposed transaction or arrangement with the company – most commonly this covers property transactions or contracts with businesses that a director has an interest in. The sphere of interests that need to be declared also usually includes the director’s spouse, children and immediate family.

If you are a company director and you have been aware of your duties under the 2006 Companies Act and you have been complying with them then you can be satisfied that you are acting within the law – if not, then you should review how you and your board operates to make sure that you are discharging your director’s duties correctly.

*David Doughty, Corporate Governance Expert, Chartered Director, Chairman, Non-Executive Director, Entrepreneur. He works with company directors to help them and their boards to be more effective. He provides Investment Due-dilligence, Board Evaluation, Director Development and facilitated Board Strategic Away-days.

En rappel | Les C.A de petites tailles performent mieux !

Selon une étude du The Wall Street Journal publié par Joann S. Lublin, les entreprises qui comptent moins d’administrateurs ont de meilleurs résultats que les entreprises de plus grandes tailles.

Bien qu’il n’y ait pas nécessairement de relation de type cause à effet, il semble assez clair que la tendance est à la diminution de nombre d’administrateurs sur les conseils d’administration des entreprises publiques américaines. Pourquoi en est-il ainsi ?

Il y a de nombreuses raisons dont l’article du WSJ, ci-dessous, traite. Essentiellement, les membres de conseils de petites tailles :

sont plus engagés dans les affaires de l’entité
sont plus portés à aller en profondeur dans l’analyse stratégique
entretiennent des relations plus fréquentes et plus harmonieuses avec la direction
ont plus de possibilités de communiquer entre eux
exercent une surveillance plus étroite des activités de la direction
sont plus décisifs, cohésif et impliqués.

Les entreprises du domaine financier ont traditionnellement des conseils de plus grandes tailles mais, encore là, les plus petits conseils ont de meilleurs résultats.

La réduction de la taille se fait cependant très lentement mais la tendance est résolument à la baisse. Il ne faut cependant pas compter sur la haute direction pour insister sur la diminution de la taille des C.A. car il semblerait que plusieurs PCD s’accommodent très bien d’un C.A. plus imposant !

Il faut cependant réaliser que la réduction du nombre d’administrateurs peut constituer un obstacle à la diversité si l’on ne prend pas en compte cette importante variable. Également, il faut noter que le C.A. doit avoir un président du conseil expérimenté, possédant un fort leadership. Un conseil de petite taille, présidé par une personne inepte, aura des résultats à l’avenant !

Voici deux autres documents, partagés par Richard Leblanc sur son groupe de discussion LinkedIn Boards and Advisors, qui pourraient vous intéresser :

« Higher market valuation of companies with a small board of directors« : http://people.stern.nyu.edu/eofek/PhD/papers/Y_Higher_JFE.pdf

« Larger Board Size and Decreasing Firm Value in Small Firms« : http://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=1403&context=facpub

Je vous convie donc à la lecture de l’article du WSJ dont voici un extrait de l’article. Bonne lecture !

Smaller Boards Get Bigger Returns

Size counts, especially for boards of the biggest U.S. businesses.

Companies with fewer board members reap considerably greater rewards for their investors, according to a new study by governance researchers GMI Ratings prepared for The Wall Street Journal. Small boards at major corporations foster deeper debates and more nimble decision-making, directors, recruiters and researchers said. Take Apple Inc. In the spring when BlackRock founding partner Sue Wagner was up for a seat on the board of the technology giant, she met nearly every director within just a few weeks. Such screening processes typically take months.

But Apple directors move fast because there only are eight of them. After her speedy vetting, Ms. Wagner joined Apple’s board in July. She couldn’t be reached for comment.

Smaller boards at major corporations have more nimble decision-making processes, directors, recruiters and academic researchers say. Eric Palma

Among companies with a market capitalization of at least $10 billion, typically those with the smallest boards produced substantially better shareholder returns over a three-year period between the spring of 2011 and 2014 when compared with companies with the biggest boards, the GMI analysis of nearly 400 companies showed.

Companies with small boards outperformed their peers by 8.5 percentage points, while those with large boards underperformed peers by 10.85 percentage points. The smallest board averaged 9.5 members, compared with 14 for the biggest. The average size was 11.2 directors for all companies studied, GMI said.

« There’s more effective oversight of management with a smaller board, » said Jay Millen, head of the board and CEO practice for recruiters DHR International. « There’s no room for dead wood. »

Many companies are thinning their board ranks to improve effectiveness, Mr. Millen said. He recently helped a consumer-products business shrink its 10-person board to seven, while bringing on more directors with emerging-markets expertise.

GMI’s results, replicated across 10 industry sectors such as energy, retail, financial services and health care, could have significant implications for corporate governance.

Small boards are more likely to dismiss CEOs for poor performance—a threat that declines significantly as boards grow in numbers, said David Yermack, a finance professor at New York University’s business school who has studied the issue.

It’s tough to pinpoint precisely why board size affects corporate performance, but smaller boards at large-cap companies like Apple and Netflix Inc. appear to be decisive, cohesive and hands-on. Such boards typically have informal meetings and few committees. Apple directors, known for their loyalty to founder Steve Jobs, have forged close ties with CEO Tim Cook, according to a person familiar with the company. Mr. Cook frequently confers with individual directors between board meetings « to weigh the pros and cons of an issue, » an outreach effort that occurs quickly thanks to the board’s slim size, this person said.

Mr. Cook took this approach while mulling whether to recruit Angela Ahrendts, then CEO of luxury-goods company Burberry Group PLC for Apple’s long vacant position of retail chief. Private chats with board members helped him « test the thought » of recruiting her, the person said. She started in April.

Ms. Wagner, Apple’s newest director, replaced a retiring one. The board wants no more than 10 members to keep its flexibility intact, according to the person familiar with the company, adding that even « eye contact and candor change » with more than 10 directors.

Apple returns outperformed technology sector peers by about 37 cumulative percentage points during the three years tracked by GMI. An Apple spokeswoman declined to comment.

Netflix, with seven directors, demonstrated equally strong returns, outperforming sector peers by about 32 percentage points. Board members of the big video-streaming service debate extensively before approving important management moves, said Jay Hoag, its lead independent director.

« We get in-depth, » he said. « That’s easier with a small group. »

Netflix directors spent about nine months discussing a proposed price increase, with some pushing back hard on executives about the need for an increase, Mr. Hoag said. Netflix increased prices this spring for new U.S. customers of the company’s streaming video plan, its first price bump since 2011.

A board twice as big wouldn’t have time for « diving deeper into the business on things that matter, » Mr. Hoag said.

….

Pourquoi nommer un administrateur indépendant comme président du conseil | En rappel

Plusieurs se questionnent sur les raisons qui expliquent l’importance de choisir un administrateur indépendant comme président du conseil, même dans les entreprises dont le fondateur possède le contrôle.

Le court article de Gerard Buckley paru dans itbusiness le 25 août 2014 montre les avantages réels à se doter d’une gouvernance exemplaire.

Voici, selon l’auteur, neuf points à considérer dans le choix de cette option. Bonne lecture !

1. Increased share price on acquisition
2. Investor due diligence is smoother
3. Greater interest in follow-on investment rounds
4. Increased transparency through supplying shareholder information
5. Increased accountability of management
6. Stronger risk and crisis management policies
7. Stronger customer acquisition process resulted from customers’ appreciation that the company is stronger than its individual executives.
8. Competitors take notice of the seriousness of your company’s approach
9. Creates environment for innovative change

The use of a non-executive chairperson for a private corporation, including early and growth stage companies, allows the company to start acting as if the company is structured for success and is serious about its responsibilities to shareholders, customers, and staff.

9 reasons to name a non-executive chairperson to your board

It is natural for entrepreneurs and founders to want to control the destiny of their company. Facebook and Mark Zuckerberg are often cited as examples of why a founder should stay in control.

In this example, Zuckerberg owned less than 30 per cent of Facebook; however, he maintained a controlling vote through multiple voting rights. These voting rights enabled him to singlehandedly buy Instagram for over $1 billion without board approval.

Some entrepreneurial observers may say that this is a good thing. Others who have been schooled in corporate governance would suggest too much power rested in one shareholder’s hands, and one who holds less than 50 per cent of the equity of the company. This example of a lack of corporate governance points a founder in the direction of how a private company and its strategic direction should be directed and controlled, while maintaining the vision the founders had when they formed the company.

When a company accepts equity investment from outside shareholders, the shareholders have an expectation that their rights will be protected by the board of directors. For a growth stage company, these many responsibilities become burdensome. I agree with most founders that their primary responsibility is to drive product development and acquire profitable customers. A founder who is both comfortable with and understands the alignment of the vision and strategic direction should be comfortable handing off some of the leadership responsibilities that guide the company.

Best practices of corporate governance for a public company separate the role of CEO of the company and the chairperson of the board of directors, often referred to as the non-executive chairperson or lead director. Under this structure, the CEO manages the affairs of the company under the direction of the board, and the governance structure or board of directors and its members are managed by the non-executive chairperson. Many founders are concerned with a loss of control in this structure; however, they need not be. With a strong selection process that was developed from a skills matrix, and a desire to have open and regular communication between the two roles, the company should be positioned for success.

….

En rappel | Les relations d’amitié entre un administrateur et son PCD (CEO) peuvent-elles influer sur ses obligations de diligence ?

Voici un compte rendu, paru dans le NYT, d’un article scientifique, publié dans The Accounting Review en juillet 2014, qui montre que les administrateurs ayant des relations d’amitié avec le président et chef de la direction (PCD) de l’entreprise sont moins enclins à exercer une supervision serrée des activités de la direction.

Cependant, le fait de divulguer ces relations personnelles n’a pas pour effet de raffermir les devoirs de diligence et de vigilance des administrateurs, mais sert plutôt de prétexte pour les dédouaner en leur permettant d’être encore plus tolérants envers certaines actions de leur PCD.

Les auteurs tirent deux conclusions de ces résultats :

(1) le fait de divulguer des conflits ou des relations personnelles n’élimine pas les conséquences négatives reliées à cette divulgation

(2) les actionnaires doivent se méfier des liens trop étroits que certains administrateurs entretiennent avec leur PCD.

Rappelons-nous que trop près n’est pas préférable à trop loin. Un juste équilibre doit s’imposer !

L’étude “Will Disclosure of Friendship Ties between Directors and CEOs Yield Perverse Effects? » a été conduite par Jacob M. Rose et Anna M. Rose de Bentley University, Carolyn Strand Norman de Virginia Commonwealth University et Cheri R. Mazza de Sacred Heart University.

En voici quelques extraits. Bonne lecture !

The C.E.O. Is My Friend. So Back Off

…

But the research makes a counterintuitive finding as well. The conventional wisdom holds that when you disclose personal ties, you create transparency and better governance. The experiment found that when social relationships were disclosed as part of director-independence regulations, board members didn’t toughen their oversight of their chief-executive pals. Rather, the directors went easier on the C.E.O., perhaps believing that they had done their duty by disclosing the Relationship.

…

Now for the results: Among the directors who counted the C.E.O. as a friend, 46 percent said they would cut research and development by one-quarter or more to ensure a bonus payout to their pal. By contrast, only 6 percent of directors with no personal ties to the chief executive agreed to reduce research and development to generate a bonus.

That’s to be expected.

The results get more interesting when disclosure is added to the mix. An astonishing 62 percent of directors who disclosed a friendship with the C.E.O. said they would cut $10 million or more from the budget — the amount necessary to generate a bonus. Only 28 percent of the directors who had not disclosed their relationship with the executive agreed to make the cuts necessary to generate a bonus.

Only one director with no ties to the executive agreed to cut the budget by $10 million or more.

Mr. Rose, an author of the paper, said he and his colleagues were surprised that so many directors said they’d be willing to put the company at risk to ensure a bonus for their pal, the C.E.O. “If just by mentioning that you’re friends with the C.E.O. it affects their decision-making, we think the effects going on in the real world are much, much larger than what we picked up in the lab,” Mr. Rose said in an interview last week.

Even more disturbing, he said, was that so many directors seemed to think that disclosing their friendships with the C.E.O. gave them license to put the executive’s interests ahead of the company’s.

“When you disclose things, it may make you feel you’ve met your obligations,” Mr. Rose said. “They’re not all that worried about doing something to help out the C.E.O. because everyone has had a fair warning.”

…

Le point de vue sans équivoque de l’activiste Carl Icahn | en rappel

Depuis quelques années, on parle souvent d’activistes, d’actionnaires activistes, d’investisseurs activistes ou de Hedge Funds pour qualifier la philosophie de ceux qui veulent assainir la gouvernance des entreprises et redonner une place prépondérante aux « actionnaires-propriétaires » !

Pour ceux qui sont intéressés à connaître le point de vue et les arguments d’un actionnaire activiste célèbre, je vous invite à lire l’article écrit par Carl Icahn le 22 août 2014 sur son site Shareholders’ Square Table (SST).

Vous aurez ainsi une très bonne idée de cette nouvelle approche à la gouvernance qui fait rage depuis quelque temps.

Je vous invite aussi à lire l’article de Icahn qui s’insurge contre la position de Warren Buffet de ne pas intervenir dans la décision de la rémunération globale « excessive » à Coke, suivi de la réponse de Buffet.

My article from Barron’s on Warren Buffett’s abstention from a vote on Coke’s executive-pay plan

À vous de vous former une opinion sur ce sujet ! Bonne lecture !

The Bottom Line | Carl Icahn

Among other things, I’m known to be a “reductionist.” In my line of work you must be good at pinpointing what to focus on – that is, the major underlying truths and problems in a situation. I then become obsessive about solving or fixing whatever they may be. This combination is what perhaps has lead to my success over the years and is why I’ve chosen to be so outspoken about shareholder activism, corporate governance issues, and the current economic state of America.

Currently, I believe that the facts “reduce” to one indisputable truth which is that we must change our system of selecting CEOs in order to stay competitive and get us out of an extremely dangerous financial situation. With exceptions, I believe that too many companies in this country are terribly run and there’s no system in place to hold the CEOs and Boards of these inadequately managed companies accountable. There are numerous challenges we are facing today whether it be monetary policy, unemployment, income inequality, the list can go on and on… but the thing we have to remember is there is something we can do about it: Shareholders, the true owners of our companies, can demand that mediocre CEOs are held accountable and make it clear that they will be replaced if they are failing.

I am convinced by our record that this will make our corporations much more productive and profitable and will go a long way in helping to solve our unemployment problems and the other issues now ailing our economy.

…….

Enquête sur le leadership du conseil d’administration | Korn Ferry

Ce billet publié par Robert E. Hallagan et Dennis Carey, vice-présidents de Korn Ferry, présente une partie d’une étude conduite par l’Institut Korn Ferry en 2014 portant sur le leadership du C.A.

On constatera que la séparation des fonctions de président du conseil et de président et chef de la direction s’effectue lentement chez nos voisins du sud ! En effet, bien que tous les experts de la gouvernance reconnaissent le bien fondé d’avoir un président du conseil indépendant, on note un certain progrès à cet égard mais il y a encore loin de la coupe aux lèvres, surtout dans les grandes entreprises cotées aux ÉU.

Voici un aperçu de l’introduction de cette étude. Je vous invite à lire le document complet pour avoir une meilleure idée des résultats de l’enquête. Bonne lecture !

Survey of Board Leadership 2014

This is our second annual report on board leadership.

The numbers and trends are interesting but the subtleties and substance behind them are extremely valuable as the National Association of Corporate Directors (NACD) and Korn Ferry continue their study of high-performing boards. The thoughtful selection and performance of board leaders is one of two pillars of leadership that drive long-term shareholder value—the other being the CEO of the company.

There is universal agreement that each board must have an independent leader but how each company has achieved this takes many shapes.

In this year’s report, we see continued evidence of a slow and deliberate trend toward separation of the roles, higher in mid-cap companies than the large-cap S&P 500. Key catalysts included activism, and a transition of CEO leadership that prompted the board to elect to separate the roles.

…

There is universal agreement that each board must have an independent leader but how each company has achieved this takes many shapes.

In our first report we stated our commitment to remaining an honest broker of facts in the performance debate. Many proponents of separation claim it will enhance long-term shareholder value, yet no study to date has rendered conclusive evidence in either direction. We have now isolated companies that have made the change, documented their performance before and after, and will soon be comfortable debating the results. While we clearly understand the danger in relying solely on numbers and acknowledge that there are many potential ways to slice the data, we believe our attempt to get at the “facts” will generate engaged, healthy debate among our members and clients. We look forward to a rich dialogue at NACD conferences to come.

Methodology and approach

This study examined changes to and trends in board leadership structure for 900 US companies, namely the constituents of Standard & Poor’s Large Cap 500 Index (S&P 500) and the Mid-Cap Index (the S&P 400) as of December 31, 2012. Companies are added to the S&P 500 if they have unadjusted market capitalization of $4.6 billion or more, and to the S&P 400 if they have unadjusted market capitalization of between $1.2 billion and $5.1 billion. The S&P 500 Index represents a barometer of the state of the largest publicly traded US corporations, and the majority of the research and analysis in this study focuses on this group. To expand the scope beyond large-cap companies, and thus broaden the findings of the research, the constituents of the S&P 400 were also examined in detail.

For each company, we looked at the type of board leadership structure in place at the time of its proxy filing for each year between 2008 and 2012. This report focuses primarily on the leadership structure in place as of year-end 2012, and examines each company’s overall leadership approach as it pertains to the roles of chairman, CEO, and lead director (if at all). Proxy filings, annual reports, and the corporate governance section of company websites comprise the source documents for these determinations. Please note that numbers shown in this report reflect actual statistics and not data projected from a random sampling of companies.

In addition, each company that had a change in its leadership structure since January 1, 2003 (by replacing either the CEO or chairman) was investigated to understand the reason for the change, and additional details—such as tenure, age, education, committee responsibilities—were sought for the incoming chairman. Company and outside press reports and news articles were used to determine the reason for an executive’s departure, and executive biographical and company data were culled from secondary sources, including Reuters, Businessweek, MarketWatch, and Morningstar.

The trend to separate roles continues to move steadily forward.

Though board composition is not likely to be an area marked by rapid, significant change, the slow and steady trend to separate chairman and CEO roles continued in 2012. By the end of 2012, 56% of S&P 500 chairmen also held the position of CEO. This marks a significant departure from 2009, when 63% of all chairmen also held the company’s highest executive office. The change comes almost equally from increases in non-executive chairmen and chairmen who have some past affiliation with the company; additional analysis in this report will examine what types of companies are likely to favor the different approaches.

While it is reasonable to expect this gradual trend to continue, particularly as activist shareholders keep pushing for separation, some large companies, including IBM, Disney, and Urban Outfitters, are moving in the opposite direction and are recombining roles. In the case of IBM and Disney, the recombinations are part of longterm succession, though IBM Chairman-CEO Ginny Rometty added the Chairman role just 10 months after becoming CEO—faster than many expected. In the case of Urban Outfitters, founder Richard Hayne reclaimed the CEO role after his successor had difficulty maintaining the main brand’s appeal to young people. Our continued perspective is that there is no one-size-fits-all approach to board leadership and that careful analysis and trusted advisors should be leveraged to find the appropriate structure for each organization.

In our opinion, chairmen must meet several criteria to qualify as truly “non-executive” or independent. They must not currently hold an executive role (CEO or other), must not be former executives, and must not be founders or family members of founders. From time to time, companies may characterize these types of chairmen as “non-executive” in the language of their proxy reports or even in the chairman’s title, but our analysis re-characterizes them per the criteria above. The idea of an independent chairman is that he or she can bring an impartial and objective perspective to the board, and our experience finds that founders, family members of founders, and former executives tend not to possess that objectivity. This particular debate on nomenclature is a classic case of saying it doesn’t make it so. Being independent in title is not necessarily a reflection of reality. An analysis of the types of chairmen found in the S&P 500 in 2012 is described in Figure 2.

The trend toward separation of the chairman and CEO has been more pronounced over time within the mid-cap companies in the S&P 400 than it has been in the S&P 500. Separation rates in both groups rose by two points in 2012, to 44% in the S&P 500 and 55% in the S&P 400.

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La place des jeunes sur les conseils d’administration de grandes sociétés : Êtes-vous pour ou contre ?

Vous trouverez, ci-dessous, les coordonnées d’un article d’Alan Mak et Andrew Hill sur le Blogue du FT du 2 juillet 2014. Les auteurs se questionnent sur la place des jeunes (millennials) dans les conseils d’administration du futur.

Vous y découvrirez plusieurs raisons qui militent en faveur de la nomination de jeunes au C.A. (Alan Mak) ainsi que la prise de position d’un auteur qui ne croit pas à la contribution des jeunes sur des C.A., principalement à cause de leur manque d’expérience (Andrew Hill).

Comme vous vous en doutez, je partage entièrement le point de vue d’Allan Mak qui propose l’engagement des jeunes sur les conseils.

La lecture des arguments pour et des arguments contre est intéressante. Qu’en pensez-vous ?

Bonne lecture !

Should under-35s sit on company boards ?

Yes

Alan Mak

Lord Davies in his report “Women on Boards” rightly said the best boards contain “a mix of voices [that] must include women”. It should also include millennials.

Today’s rapidly changing marketplace is more complex than ever and businesses that want to stay competitive, especially in customer-facing sectors, need Generation Y to help them deal with the big trends, from the rise of digitally empowered consumers to the febrile post-financial crisis business environment.

The business case for younger directors is strong. Generation Y, also known as millennials, are aged 18-35 and, at 2bn people, are the world’s biggest demographic group. By 2018 they will have the biggest spending power of any age group, Deloitte says. And three in four millennials say they influence the purchasing decisions of other generations. So, every business needs to understand Generation Y’s behaviour and aspirations, and younger, suitably qualified directors can be their champion in the boardroom.

Meanwhile, better decisions are made when companies draw on the widest possible range of talent regardless of age, and when directors bring to bear the broadest range of experiences, perspectives and lifestyles. In this context, “diversity” must include generational diversity, not just gender diversity. Adding a Generation Y perspective can be a powerful antidote to age-related groupthink. For example, millennials are more likely to take a longer-term approach to risk taking because they have to live with the financial and reputational consequences of failure when older colleagues may not.

The financial crisis caused an irreversible cultural and structural shift. Corporations from banks to supermarkets are redefining their values and business models to become more accountable and sustainable. As David Jones explains in his book Who Cares Wins, for business, “the new price of doing well is doing good”.

Generation Y instinctively understands this new paradigm, and they are best placed to act as boardroom cultural translators.

Such rapid cultural change is itself largely driven by fast technological and demographic change. Social media have given today’s consumers more information about how companies do business than ever before. Whereas the industrial revolution empowered the corporation, the digital revolution empowered the consumer. As Jones observes, “ … there’s not been another time in history when the youngest people understood the most about what is going on”. Companies that fail to understand this new “good business zeitgeist” find their brands and share price diminished.

Generation Y directors add value by helping their companies to navigate this volatile, Twitter-driven landscape. That is why Starbucks appointed social media expert Clara Shih, then 29, to its main board.

Meanwhile, globalisation has created increasingly complex decision-making environments that require new skills and fresh insights – for example, into emerging markets and new technologies – that were simply not around, or as needed in the past. Every company must now balance Gen X’s experience with Gen Y’s inherently global outlook, digital aptitude and commitment to life-long learning. Putting younger leaders into the boardroom helps that development while sending a wider message that an organisation rewards talent and ambition.

Pessimists may say younger figures lack the industry knowledge or operational experience to step into the boardroom. These qualities can all be developed and naysayers should listen to Peter Cave-Gibbs, former London head of recruiter Heidrick & Struggles: “Board chairmen want outstanding leaders who can help their business succeed in today’s global marketplace. Gen Y talent is highly educated, multilingual, and comfortable with change and technology. They are changing the way business is done: age is just a number in business now.”

. . .

No

Andrew Hill

Boards are changing. The devastating economic and financial crisis has exposed the risk of groupthink in the boardroom and the weaknesses in established corporate governance, as pursued by establishment people, who, let’s face it, are still predominantly “white, male and stale”. Business logic and a simple sense of equity dictate that the gender and ethnic balance in the boardroom should alter. Research increasingly suggests that diverse teams come up with better ideas.

So, if more women and people from ethnic minorities are becoming non-executive directors, for these and other excellent reasons, shouldn’t large companies invite more young people to step up to the board?

No, they shouldn’t, and here’s why.

First, the immediate priority for large companies ought to be to assemble a balanced board with an accumulation of experience that will help supervise the executive team. By definition, younger candidates have less experience.

What ambitious and talented young people know could still be useful to the board and to the company. Millennials may help a consumer products company tailor its offering to younger customers.

While the boardroom dinosaurs are struggling with their iPads, they could help a natural resources company to understand coming risks to its reputation (posed, for example, by social media protests). But these contributions can be sought in better and more efficient ways than by inviting a representative into the boardroom. Smart companies are already tapping social media – the natural heir to focus groups – for a quantitative assessment of youth trends. Phil Clarke, Tesco’s chief executive, has a 20-something staffer in his office, precisely to keep him updated on such trends.

I am as suspicious as anyone of the power of vested interests. When a headhunter recently told me that a boardroom should “not be trying to reflect the demographic” and warned that 20-something non-executives with little corporate experience might “throw in grenades that are inappropriate”, I was almost ready to help them pull the pin.

Boards do need shaking up and young people with proven records of relevant achievement could have what it takes to hold their own in a boardroom packed with company veterans. But these candidates will be few and far between. Youth per se is no qualification.

Second, a bigger priority for boards is to reflect the gender and ethnic mix around them without compromising on experience. I would choose, say, a female executive informed by diverse experiences ahead of a promising younger businessperson with only youth on his or her side.

Finally, if companies want to draw on the energy and inspiration brought by younger people – and they should – they should employ them and promote them to executive roles. It may not have dawned on aspiring Gen Y non-executives, but the board is not the engine of creativity, innovation and strategy at big companies: it is a regulator of the engine, and an important sounding board for ideas brought by the executive team.

Most entrepreneurial young people I know would simply be frustrated by boardroom politics and bluster. Those young managers who feel they should start their non-executive portfolio in their 20s have got their careers back to front: they should be directing their best efforts to founding start-ups, or at least changing the way companies work, not the way they are supervised. If it is revolution they seek, they stand a better chance of pursuing it from the bottom up than from the top down.

La divulgation du rapport entre la rémunération du PDG (CEO) et celle de l’employé médian

Aujourd’hui, je vous propose la lecture d’un article très nuancé publié par Yvan Allaire et François Dauphin de l’IGOPP, récemment paru dans Lesaffaires.com.

Les auteurs se questionnent sur l’applicabilité de la nouvelle règlementation de la SEC qui exige que les entreprises publiques (cotées) américaines divulguent le rapport entre la rémunération du PDG (CEO) et celle de l’employé médian.

Cette divulgation est vue comme de plus en plus nécessaire depuis que le ratio « salaire du PDG versus celui des employés » est passé de 25 fois en 1960 à plus de 200 fois en 2010, et sûrement beaucoup plus en 2015 !

Les auteurs montrent que la nouvelle règlementation est beaucoup plus complexe qu’il n’y paraît, notamment eu égard au calcul de l’établissement du ratio. Ils émettent des recommandations qui font reposer la rémunération des PDG sur les décisions des conseils d’administration, plutôt que sur des règles législatives.

Ainsi, la réponse à la question soulevée est oui, c’est une bonne idée, mais le calcul du ratio devrait faire l’objet d’une décision du conseil d’administration et les détails du calcul de ce ratio devraient être divulgués dans un « document d’information officiel ».

Vous trouverez, ci-dessous, les arguments développés dans cet article.

Bonne lecture ! Vos commentaires sont appréciés.

Divulguer le rapport entre la rémunération du PDG et celle des salariés de l’entreprise : une bonne idée?

Afin de contenir la rémunération des dirigeants d’entreprises, que d’aucuns jugent excessive, il fut maintes fois proposé de publier le rapport entre ce qui est payé au premier dirigeant et ce qui est payé à un employé-type de l’entreprise. L’efficacité de cette mesure proviendrait soit, d’un sentiment de gêne que susciterait cet étalage public, soit, de pressions sociales ou politiques que pourraient provoquer des inégalités criantes ainsi dévoilées.

Un tel ratio a d’ailleurs fait l’objet de demandes répétées du Mouvement d’éducation et de défense des actionnaires (MÉDAC) qui souhaiterait qu’une telle divulgation soit imposée aux entreprises canadiennes ou que celles-ci en fassent volontairement état.

Or, en août dernier, sans trop faire de bruit, la Security and Exchange Commission (SEC) a publié les derniers amendements et la version finale de sa réglementation exigeant que les entreprises cotées en bourse aux États-Unis divulguent le ratio de la rémunération du principal dirigeant comparativement à la rémunération de l’employé médian (soit la rémunération qui est telle que la moitié des employés ont une rémunération inférieure à celle-ci et la moitié une rémunération supérieure).

C’est dans la foulée de l’implantation de la Loi Dodd-Frank de 2010 que les États-Unis tenteront cette expérience, qui fera certes saliver de nombreux observateurs du milieu de la rémunération. Ainsi, tous les émetteurs cotés aux États-Unis et assujettis à cette nouvelle règle (plus de 3 500 entreprises) devront commencer à divulguer ce ratio lors de l’exercice débutant le ou après le 1^er janvier 2017. Pour le moment, les sociétés canadiennes listées aux États-Unis n’auront pas à s’y conformer.

Plusieurs organismes américains, comme Bloomberg ou la centrale syndicale AFL-CIO, publient déjà des approximations de ces ratios qui ont suscité de vives critiques sans toutefois provoquer des changements importants.

La nouvelle réglementation adoptée par la SEC offrira un nouvel étalon de mesure valide et bien calibré pour apprécier la rémunération des dirigeant (notamment pour le say on pay). Selon les données recueillies par diverses sources, on constate que la rémunération médiane d’un PDG dans les années 1960 représentait environ 25 fois le salaire moyen d’un employé de production; au cours des années 80, ce ratio augmente pour s’établir à 50 fois environ et ce jusqu’au début des années 90 puis le ratio augmente exponentiellement pour atteindre près de 200 en 2010 aux États-Unis et quelque 150 fois au Canada.

Pour plusieurs observateurs, ce ratio représente la manifestation la plus éloquente des inégalités économiques et sociales au sein de nos sociétés.

Toutefois, ce qui semble à première vue une donnée limpide et d’un calcul simple s’avère à l’examen plus complexe et moins irréfutable qu’il n’y parait.

La version finale du règlement déposé par la SEC s’étend sur 294 pages pour expliciter tous les aspects de la fabrication de ce ratio! Ainsi, la SEC dût clarifier plusieurs points litigieux, par exemple:

Comment déterminer les employés pour lesquels le calcul de ce ratio sera effectué?

Quel est le périmètre géographique pertinent?

Comment tenir compte des différences de coût de la vie selon les différentes juridictions?

Comment identifierl’employé médian dont la rémunération servira de dénominateur au calcul de ce ratio?

À ces questions s’ajoutent la détermination de la méthode de calcul de la rémunération totale (laquelle doit être sur la même base au numérateur et au dénominateur), les modalités d’ajustement lorsque survient un changement de dirigeant en cours d’année, le choix de la date retenue pour établir le nombre d’employés, et ainsi de suite.

Malheureusement, ce qui semblait une idée intéressante de prime abord devient un exercice complexe en pratique dont les résultats devront être interprétés avec prudence.

De plus, un indicateur unique capte mal la réalité spécifique à chaque entreprise, mais il sera bien difficile de résister à la tentation de tirer des conclusions dramatiques à la publication de ces ratios. Ainsi, le rapport entre la rémunération du premier dirigeant et la rémunération médiane dans une entreprise de services spécialisés (banques d’affaire, comme Goldman Sachs, etc.) sera assurément plus faible en raison des hauts salaires généralement payés dans cette industrie que pour une entreprise de distribution ou de commerce de détail où l’employé médian est, par exemple un(e) caissier(ière) à temps partiel.

Dans cet exemple, la première firme pourrait avoir un ratio de 50 et la seconde de 300. Doit-on applaudir la première pour sa frugalité et critiquer la seconde pour un score aussi scandaleux? Pourtant, le PDG de la première firme reçoit, disons, une rémunération de 10M$ et l’employé médian de 200 000 $, alors que le PDG de la seconde entreprise a obtenu une rémunération de 6M$ et l’employé médian de 20 000 $. Le premier PDG dirige 300 employés répartis dans 3 bureaux aux États-Unis et le second 75 000 employés répartis dans un réseau de 1 000 établissements dans 5 pays.

Comme nous l’avons écrit dans une prise de position antérieure (IGOPP, 2012, p.57) :

«Au-delà des principes d’équité, l’enjeu [de la rémunération des dirigeants] revêt une importance pratique pour tous ceux qui sont préoccupés du bon fonctionnement et de la compétitivité des entreprises sur le long terme. Des rémunérations fastueuses au-delà du raisonnable risquent de miner la légitimité sociale et politique de l’entreprise. D’importants décalages de rémunération au sein d’une même entreprise risquent d’engendrer la perte du sentiment d’appartenance, de solidarité, de responsabilité partagée, de cette précieuse perception chez les membres de l’organisation « que nous sommes tous dans le même bateau».

L’IGOPP y formulait la recommandation suivante:

Recommandation 3
Les conseils d’administration des sociétés cotées en bourse devraient établir un rapport juste et productif entre la rémunération totale du chef de la direction et le revenu médian des salariés de l’entreprise.

Toutefois, la décision des conseils d’administration sur cette question ne devrait pas être rendue publique, puisque cette sorte d’information exige d’être interprétée en tenant compte de beaucoup de facteurs contextuels. Sans ce contexte, un tel ratio rendu public ne servira qu’à alimenter des reportages sensationnalistes. Toutefois, les sociétés ouvertes devraient déclarer dans un document d’information officiel que leur conseil d’administration a adopté des politiques de rémunération justes et équitables, comprenant la détermination d’un plafond pour ce rapport, après considération de tous les facteurs pertinents.

Les conseils d’administration portent la responsabilité d’établir des politiques de rémunération pour les dirigeants qui soient justes et équitables, comprenant la détermination d’un plafond pour un tel ratio, tout en demeurant sensibles aux particularités contextuelles propres à l’organisation.

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Sustainability rising

Exhibit 1

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Mentoring Provides a Foundation for Positive Performance

Mentoring Supports a Culture of Learning and Knowledge Transfer

Mentoring is Key for Developing Future Leaders

Mentoring Leads to Increased Employee Retention

Mentoring Increases Self-Awareness

Mentoring Is a Great Idea Even If You Aren’t Going Anywhere Anytime Soon

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1. Perks = Culture

2. Culture Doesn’t Start With You

3. Employee Feedback Isn’t Important

4. Remote Work Doesn’t Impact Culture

5. Someone Else Owns It

6. Culture Doesn’t Need to Be Defined

7. Culture Is Just a Set of Values

8. Culture Only Matters When You Reach X Size

9. You Can’t Hire for Culture

10. Compensation Is the Only Motivator

11. Culture Will Wait for You to Create It

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Yes

No

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