Comment la COVID-19 affecte-t-elle la rémunération des PDG et des administrateurs ?


Voici un article très intéressant de Andrew Gordon (Equilar, inc.), David F. Larcker (Stanford University), et Courtney Yu (Equilar, inc.) qui analyse les effets de la pandémie sur les rémunérations globales de CEO et des membres des conseils d’administration.

Cet article a été publié sur le Forum en gouvernance de Harvard Law School.

Voici les conclusions et les questionnements des auteurs à la suite d’une étude très détaillée des grandes entreprises américaines. J’ai utilisé l’outil de traduction de google afin de vous présenter les résultats.

Indépendamment de la valeur des ajustements annuels de rémunération que les entreprises ont effectués, les PDG ont subi une perte de richesse considérable en raison de leur propriété directe dans les actions de l’entreprise.

Sharing the Pain: How Did Boards Adjust CEO Pay in Response to COVID-19

 

U.S. firms shield CEO pay as pandemic hits workers, investors | Reuters

 

Pourquoi est-ce important ?

À la suite du COVID-19, moins de 20 % des entreprises publiques ont choisi d’apporter des modifications à leurs programmes de rémunération des dirigeants et des administrateurs. Selon l’angle à travers lequel ces changements sont mesurés — changement de salaire, rémunération totale ou perte de richesse — cela peut être considéré comme un sacrifice relativement modeste ou une perte importante de valeur.

Quelle a été la souffrance économique du PDG type ? En général, cela indique-t-il le succès ou l’échec de la conception du programme de compensation ?

Les entreprises qui ont connu des difficultés économiques étaient beaucoup plus susceptibles de réduire la rémunération des PDG et des administrateurs que celles qui ne l’ont pas fait. Ces PDG ont-ils la responsabilité de placer leurs entreprises dans une position de risque plus élevé entraînant des pertes plus importantes, ou leurs difficultés économiques étaient-elles dues à des facteurs tels que l’exposition à l’industrie qui étaient hors du contrôle du PDG ?

Dans ce dernier cas, les PDG de ces entreprises devraient-ils recevoir à l’avenir des primes supplémentaires pour compenser leurs pertes ? Quelle est la bonne chose à faire d’un point de vue économique ? Une perspective sociétale ?

Les PDG bénéficient généralement d’environnements économiques positifs et de valorisations boursières globales en hausse.

Les PDG devraient-ils être à l’abri des inversions de ces mêmes facteurs ? Dans l’affirmative, quelles implications cette asymétrie a-t-elle sur les incitatifs des PDG ? Cela crée-t-il une condition dans laquelle le PDG bénéficie de tout événement exogène ?

Le concept d’ESG (environnemental, social et de gouvernance) se concentre sur le fait que les entreprises qui embrassent réellement leurs parties prenantes et investissent dans leurs besoins ont un risque plus faible et des performances plus élevées. On s’attend à ce que ces entreprises subissent moins de pertes économiques en cas de ralentissement et qu’elles « agissent correctement » par leurs employés. Cependant, nous n’avons trouvé aucune différence observable entre les scores ESG des entreprises qui ont volontairement réduit la rémunération des PDG/administrateurs et celles qui ne l’ont pas fait, malgré des différences de performance.

Nous n’avons pas non plus trouvé de différence dans les scores ESG selon qu’ils choisissent ou non de licencier des employés.

Qu’est-ce que cela dit sur notre capacité à mesurer avec précision l’ESG ? Les entreprises affichant des scores ESG plus favorables sont-elles réellement « meilleures » du point de vue des parties prenantes ?

L’article complet est disponible en téléchargement ici.

Bonne lecture !

Comment devenir administrateur de société de nos jours ? | Billet revisité


Plusieurs personnes très qualifiées me demandent comment procéder pour décrocher un poste d’administrateur de sociétés… rapidement.

Dans une période où les conseils d’administration ont des tailles de plus en plus restreintes ainsi que des exigences de plus en plus élevées, comment faire pour obtenir un poste, surtout si l’on a peu ou pas d’expérience comme administrateur ou comme PDG d’une entreprise ?

Je leur réponds qu’ils doivent (1) se concentrer sur un secteur d’activité dans lequel ils ont une solide expertise (2) de bien saisir en quoi ils se démarquent (en revisitant le CV) (3) réfléchir aux atouts qui peuvent ajouter de la valeur à l’organisation (4) faire appel à leurs réseaux de contacts (5) s’assurer de bien comprendre l’industrie et le modèle d’affaires de l’entreprise (6) faire connaître ses champs d’intérêt et ses compétences en gouvernance, notamment en communiquant avec le président du comité de gouvernance de l’entreprise convoitée, et (7) surtout… d’être patients !

Si vous n’avez pas suivi une formation en gouvernance, je vous encourage fortement à consulter les programmes du Collège des administrateurs de sociétés (CAS).

L’article qui suit présente une démarche de recherche d’un mandat d’administrateur en six étapes. L’article a été rédigé par Alexandra Reed Lajoux, directrice de la veille en gouvernance à la National Association of Corporate Directors (NACD).

Vous trouverez, ci-dessous, une brève introduction de l’article paru sur le blogue de Executive Career Insider, ainsi qu’une énumération des 6 éléments à considérer.

Je vous conseille de lire ce court article en vous rappelant qu’il est surtout destiné à un auditoire américain. Vous serez étonné de constater les similitudes avec la situation canadienne.

6 Steps to Becoming a Corporate Director This Year

 

 

Of all the career paths winding through the business world, few can match the prestige and fascination of corporate board service. The honor of being selected to guide the future of an enterprise, combined with the intellectual challenge of helping that enterprise succeed despite the odds, make directorship a strong magnet for ambition and a worthy goal for accomplishment.

Furthermore, the pay can be decent, judging from the NACD and Pearl Meyer & Partners director compensation studies. While directors do risk getting underpaid for the accordion-like hours they can be called upon to devote (typical pay is a flat retainer plus stock, but hours are as needed with no upper limit), it’s typically equivalent to CEO pay, if considered hour for hour. For example, a director can expect to work a good 250 hours for the CEO’s 2,500 and to receive nearly 10 percent of the CEO’s pay. In a public company that can provide marketable equity (typically half of pay), the sums can be significant—low six figures for the largest global companies.

Granted, directorship cannot be a first career. As explained in my previous post, boards offer only part time engagements and they typically seek candidates with track records. Yet directorship can be a fulfilling mid-career sideline, and a culminating vocation later in life—for those who retire from day to day work, but still have much to offer.

So, at any age or stage, how can you get on a board? Here are 6 steps, representing common wisdom and some of my own insights based on what I have heard from directors who have searched for – or who are seeking – that first board seat.

      1. Recast your resume – and retune your mindset – for board service
      2. Integrate the right keywords
      3. Suit up and show up
      4. Cast a wide net
      5. Join NACD
      6. Pace yourself

La gouvernance du capital humain, source de différentiation


Voici un article publié sur le site du Harvard Law School Forum on Corporate Governance par Steve W. Klemash, Jennifer Lee et Jamie Smith de la firme EY Americas Center for Board Matters.

Cet article met l’accent sur la gestion du capital humain comme élément fondamental d’une gouvernance exemplaire. En effet, sous la pression des grands investisseurs institutionnels, les entreprises doivent redoubler d’efforts afin d’associer cette dimension à la croissance de leur valeur marchande.

J’ai procédé à la traduction et à l’adaptation de ce document en utilisant l’outil de traduction de Google. Vous trouverez, ci-dessous, l’introduction au document ainsi que ces principales conclusions.

C’est un document très intéressant qu’il faut lire au complet. Celui-ci est très bien illustré.

Bonne lecture !

Human capital: Key Findings from a Survey of Public Company Directors

 

 

« L’accent mis sur le capital humain et les talents dans la gouvernance d’entreprise s’intensifie, car de plus en plus de parties prenantes — dirigées par de grands investisseurs institutionnels — cherchent à comprendre comment les entreprises intègrent les considérations de capital humain dans la stratégie globale pour créer de la valeur à long terme. Après tout, les actifs incorporels d’une entreprise, qui comprennent le capital humain et la culture, représentent désormais une part importante de la valeur marchande d’une entreprise.

De nombreux groupes influents, dont la Global Reporting Initiative, le Embankment Project for Inclusive Capitalism, la Business Roundtable et le Sustainability Accounting Standards Board (SASB), ont identifié le capital humain comme un moteur clé de la valeur à long terme. Les développements récents reflètent un appétit clair et croissant du marché pour comprendre comment les entreprises gèrent et mesurent le capital humain. Cela inclut des investisseurs influents faisant du capital humain une priorité d’engagement auprès des administrateurs, ainsi que des lettres de commentaires de diverses parties prenantes à la Securities and Exchange Commission des États-Unis soutenant une plus grande divulgation du capital humain et affirmant l’importance de la gestion du capital humain dans l’évaluation de la valeur et de la performance potentielles d’une entreprise sur le long terme.

Dans le même temps, il y a un changement culturel continu provoqué par les nouvelles générations de travailleurs, la numérisation, l’automatisation et d’autres mégatendances liées à l’avenir du travail. Dans cette nouvelle ère, il est essentiel que les équipes de direction et les conseils d’administration suivent le rythme de cette transformation et envisagent de redéfinir la valeur à long terme et l’objectif de l’entreprise. La création de valeur pour plusieurs parties prenantes, y compris les employés, contribuera en fin de compte à créer et à maintenir la valeur pour les actionnaires à long terme. Pour mieux comprendre où en sont les entreprises dans cette aventure, un administrateur, en partenariat avec le EY Center for Board Matters, a interrogé 378 membres de conseils d’administration de sociétés ouvertes américaines à l’automne 2019.

Cet article présente nos résultats.

Principales conclusions :

    • Il existe un écart entre les administrateurs qui considèrent les questions de capital humain et de talent comme des sujets importants pour le conseil et ceux qui croient que ces questions ne relèvent pas de la compétence du conseil.
    • Près de 80 % des administrateurs affirment que leur conseil d’administration passe plus de temps à discuter de la stratégie en matière de talents qu’il y a cinq ans à peine, mais de nombreux conseils d’administration ne surveillent pas les indicateurs clés des talents.
    • Les administrateurs se tiennent au courant des tendances du capital humain et des talents, principalement par le biais de séances d’information de la direction ; pourtant, près de la moitié disent que le directeur des ressources humaines (ou équivalent) ne fait pas régulièrement rapport au conseil d’administration sur le capital humain.
    • Près de 85 % des administrateurs soutiennent les investissements dans la formation et la requalification des employés pour garantir des avantages de valeur à long terme même s’ils peuvent ne pas générer de rendements à court terme.
    • Près de la moitié des administrateurs ne pensent pas que les rapports externes de leur entreprise communiquent la stratégie de l’organisation en matière de capital humain et les résultats pour les parties prenantes qu’elle vise à produire.
    • Il existe un écart entre les administrateurs qui considèrent les questions de capital humain et de talent comme des sujets importants pour le conseil et ceux qui croient que ces questions ne relèvent pas de la compétence du conseil.

L’intérêt des intervenants pour la gouvernance du capital humain et la stratégie en matière de talents a pris de l’ampleur ces dernières années en raison de plusieurs transformations qui se sont produites au sein de la main-d’œuvre. La plus grande génération de travailleurs commence à quitter le marché du travail, des technologies de pointe sont mises en œuvre, une jeune génération de travailleurs cherche de nouvelles méthodes de travail et les parties prenantes se concentrent de plus en plus sur les questions sociales. Ces développements bouleversent la nature même du travail — et de plusieurs industries.

Certains administrateurs estiment que la question des talents appartient au niveau des ressources humaines ou de la gestion et ne relève pas de la responsabilité de surveillance du conseil, certains citant le mantra de gouvernance “nose in, fingers out” pour justifier leur point de vue. Cela peut résulter, au moins en partie, des opinions générationnelles des administrateurs dont l’expérience provient d’un environnement de travail et d’une culture très différents, et dont le conseil d’administration a longtemps adhéré aux attentes selon lesquelles la surveillance des talents se limite à la planification et au développement de la relève de C-Suite.

À l’inverse, d’autres administrateurs soutiennent non seulement que le changement de génération en cours, la transformation de la relation employeur-employé traditionnel et l’élévation de la culture d’entreprise en tant que catalyseur stratégique-clé comportant de nouveaux risques importants, mais aussi qu’un processus bien pensé et exécuté la stratégie des talents sert de différenciateur compétitif, donnant ainsi une pertinence aux questions de capital humain à la table du conseil. Certains disent que c’est la nature changeante du travail — par le biais de la numérisation, de l’automatisation et de l’économie des concerts — qui remet en question la vision à long terme et, par conséquent, les conseils d’administration doivent intégrer cette réalité en évolution dans leur discussion stratégique de base. En conséquence, selon l’étude, près de 40 % des conseils discutent régulièrement des questions de capital humain à chaque réunion du conseil.

Dans l’ensemble, la plupart des administrateurs interrogés déclarent que le problème est maîtrisé, où qu’il se trouve et sous quelque angle qu’il soit perçu. Près de 70 % des administrateurs affirment que leur conseil d’administration passe suffisamment de temps à discuter de la stratégie et des enjeux en matière de talents, 78 % affirment que leur conseil a une bonne compréhension des problèmes actuels liés aux talents et à la main-d’œuvre, et 66 % affirment que leur conseil possède les compétences et l’expérience appropriées pour superviser la stratégie des talents à l’ère de la transformation d’aujourd’hui ».

Vous recevez une invitation à vous joindre à un CA ! Comment devriez-vous agir ?


Dois-je me joindre à ce conseil d’administration ? Pourquoi me sollicite-t-on à titre de fiduciaire de ce CA ? Comment me préparer à assumer ce rôle ? J’appréhende la première rencontre ! Comment agir ?

Voilà quelques questions que se posent les nouveaux membres de conseils d’administration. L’article de Nada Kakabadse, professeure de stratégie, de gouvernance et d’éthique à Henley Business School, répond admirablement bien aux questions que devraient se poser les nouveaux membres.

L’article a été publié sur le site de Harvard Law School on Corporate Governance.

L’auteure offre le conseil suivant aux personnes sollicitées :

Avant d’accepter l’invitation à vous joindre à un CA, effectuez un audit informel pour vous assurer de comprendre la dynamique du conseil d’administration, l’étendue de vos responsabilités, et comment vous pouvez ajouter de la valeur.

Bonne lecture !

 

 

The coveted role of non-executive director (NED) is often assumed to be a perfect deal all round. Not only is joining the board viewed as a great addition to any professional’s CV, but those offered the opportunity consistently report feeling excited, nervous and apprehensive about the new role, the responsibilities it entails and how they will be expected to behave.

Our ongoing research into this area is packed with commentary such as:

“If you’re a new face on the board, you pay a lot of attention to others’ behaviour, and you are very apprehensive. You try to say only things that you perceive that are adding value. You feel that saying the wrong thing or at the wrong time may cost you your reputation and place at the board”—new female NED.

“Joining the board I felt intimidated because I was in a foreign territory. I did not know how it was all going to work. I did not know personalities, nor a pecking order for the group”—male NED.

Despite this, the status that comes with being offered a place on the board usually serves to quickly put any such concerns to one side.

Board members who are perceived to be high profile or status tend to experience a feeling of high achievement, which is further magnified if the position is symbolic of their personal progress.

“I just felt very privileged to be invited and be part of this board, recognising the quality of the individuals that are already here”—male NED.

Questions to consider

 

Savvy and experienced NEDs begin by conducting an informal audit before joining the board. Questions that should come to mind include:

    • How will my business acumen help me understand this organisation’s situation?
    • Will my knowledge of governance, legal and regulatory frameworks allow me to effectively discharge my responsibilities?
    • Will my financial astuteness enable me to understand the company’s debt and finance issues?
    • Have I got the emotional intelligence to handle interpersonal relationships judiciously and empathetically?
    • Will my integrity help or hinder this board operation?
    • Ultimately, how will I add value to this board?

Many new NEDs don’t take this approach because they are just thrilled that an opportunity has arrived and eagerly accept the nomination. Then they attend their first board meeting and reality bites. The questions they find themselves suddenly asking are:

    • What kind of board have I joined?
    • What culture does this board have?
    • How will I contribute to the board?

“I am always honoured to be invited on to a board. But, I always undertake an audit about who sits on the board. Particularly important for me is ‘who is the chair of the board?’ I accept the invitation only if the chair meets my criteria”—experienced female NED.

It is important for all new NEDs to recognise the complexity that goes hand-in-hand with sitting on the board of any modern organisation. Areas that will need careful review include the nature of the business and its ownership structure, information overload, digitalisation, and society and stakeholder’s shifting expectations of what a board is for.

While the board and chair shape the culture, they cannot force it upon an organisation

The board and NED’s job are nuanced and challenging. Dilemmas, rather than routine choices, underpin most decisions. Mergers and acquisitions, restructuring and competitive pressures often bring this activities into sharp focus.

Ultimately the chair has the role of “responsibility maximiser”. They have to ensure that all groups’ views are considered and that, in the long term, these interests are served as well as possible. The chair should also ensure that decisions are felt to be well-considered and fair, even if they might not be to everyone’s liking.

According to the UK Corporate Governance Code one of the key roles for boards is to establish the culture, values and ethics of a company. It is important that the board sets the correct “tone from the top”.

A healthy corporate culture is an asset, a source of competitive advantage and vital to the creation and protection of long-term value. While the board and chair shape the culture, they cannot force it upon an organisation. Culture must evolve.

“The culture of the board is to analyse and debate. A kind of robustness of your argument, rather than getting the job done and achieving an outcome. Although decisions also must be made”—male NED.

An appetite for risk

 

Culture is closely linked to risk and risk appetite, and the code also asks boards to examine the risks which might affect a company and its long-term viability. Chairs and chief executives recognise the relevance of significant shifts in the broader environment in which a business operates.

Well-chosen values typically stand the test of time, but need to be checked for ongoing relevance

Acceptable behaviour evolves, meaning company culture must be adjusted to mirror current context and times. For example, consumers are far more concerned about the environmental behaviour and impact of an organisation than they were 20 years ago. Well-chosen values typically stand the test of time, but need to be checked for ongoing relevance as society moves on and changes.

The board’s role is to determine company purpose and ensure that its strategy and business model are aligned. Mission should reflect values and culture, something which cannot be developed in isolation. The board needs to oversee both and this responsibility is an inherently complex business that needs to satisfy multiple objectives and manage conflicting stakeholder demands.

Remuneration and promotion policies

 

Novice NEDs have the freedom to ask innocent and penetrating questions as they learn how to operate on a new board.

An excellent starting point is to ask HR for employee data and look for any emerging trends, such as disciplinary matters, warnings given, firings, whistleblowing or any gagging agreements. This information quickly unveils the culture of an organisation and its board.

Remuneration and promotion policies exert a significant influence over organisational culture

NEDs should further request details of remuneration and promotion policies. These exert a significant influence over organisational culture and as such should be cohesive, rather than divisive.

Most performance reviews take into account the fit between an executive and company’s managerial ethos and needs. Remuneration, in particular, shapes the dominant corporate culture. For example, if the gender pay gap is below the industry standard, this flags a potential problem from the outset.

Joining the board

 

Once a NED understands board culture they can begin to develop a strategy about how to contribute effectively. However, the chair also needs to play an essential role of supporting new members with comparatively less experience by giving them encouragement and valuing their contribution. New board members will prosper, provided there is a supportive chair who will nurture their talent.

Before joining the board undertake an audit. Interview other board members, the chair and CEO. Listen to their description of what a board needs, and then ask the questions:

    • Are there any taboo subjects for the board?
    • What is the quality of relationship between the chair and the rest of the board, the management team, and the CEO?

The answers to these questions will determine whether the prospective board member can add value. If “yes”, join; if “no”, then decline. As a new board member, get to know how the board really functions and when you gain in confidence start asking questions.

Take your time to fully appreciate the dynamics of the board and the management team so that, as a new member, you enhance your credibility and respect by asking pertinent questions and making relevant comments.

Guide pratique à l’intention des administrateurs qui cible les situations problématiques | En reprise


Voici un guide pratique à l’intention des administrateurs de sociétés qui aborde les principales questions de gouvernance auxquelles ils sont confrontés.

Ce guide publié par Katherine Henderson et Amy Simmerman, associés de la firme Wilson Sonsini Goodrich & Rosati, est un outil indispensable pour les administrateurs, mais surtout pour les présidents de conseil.

Les principaux thèmes abordés dans ce document sont les suivants :

    • Le but de l’entreprise et le rôle des parties prenantes ;
    • Le processus de délibération du conseil et la gestion des informations de nature corporative ;
    • L’indépendance des administrateurs et les conflits d’intérêts ;
    • Les conflits d’intérêt des actionnaires de contrôle ;
    • La formation des comités du conseil lors de situations délicates ;
    • Les procès-verbaux ;
    • La découverte de dossiers et de communications électroniques du CA par des actionnaires ;
    • Les obligations de surveillance des administrateurs et des dirigeants ;
    • Les informations relatives à la concurrence et aux occasions d’affaires de l’entreprise ;
    • La rémunération des administrateurs et l’approbation des actionnaires ;
    • La planification de la relève des administrateurs et des dirigeants.

Chaque point ci-dessus fait l’objet de conseils pratiques à l’intention du conseil d’administration. Voici un bref extrait du guide.

Vous pouvez télécharger le document complet en cliquant sur le lien ci-dessous.

Bonne lecture !

A Guidebook to Boardroom Governance Issues

 

Résultats de recherche d'images pour « A Guidebook to Boardroom Governance Issues »

 

In recent years, we have seen boards and management increasingly grapple with a recurring set of governance issues in the boardroom. This publication is intended to distill the most prevalent issues in one place and provide our clients with a useful and practical overview of the state of the law and appropriate ways to address complex governance problems. This publication is designed to be valuable both to public and private companies, and various governance issues overlap across those spaces, although certainly some of these issues will take on greater prominence depending on whether a company is public or private. There are other important adjacent topics not covered in this publication—for example, the influence of stockholder activism or the role of proxy advisory firms. Our focus here is on the most sensitive issues that arise internally within the boardroom, to help directors and management run the affairs of the corporation responsibly and limit their own exposure in the process.

Répertoire des articles en gouvernance publiés sur LinkedIn | En reprise


L’un des moyens utilisés pour mieux faire connaître les grandes tendances en gouvernance de sociétés est la publication d’articles choisis sur ma page LinkedIn.

Ces articles sont issus des parutions sur mon blogue Gouvernance | Jacques Grisé

Depuis janvier 2016, j’ai publié un total de 43 articles sur ma page LinkedIn.

Aujourd’hui, je vous propose la liste des 10 articles que j’ai publiés à ce jour en 2019 :

 

Liste des 10 articles publiés à ce jour en 2019

 

Image associée

 

 

1, Les grandes firmes d’audit sont plus sélectives dans le choix de leurs mandats

2. Gouvernance fiduciaire et rôles des parties prenantes (stakeholders)

3. Problématiques de gouvernance communes lors d’interventions auprès de diverses organisations – Partie I Relations entre président du CA et DG

4. L’âge des administrateurs de sociétés représente-t-il un facteur déterminant dans leur efficacité comme membres indépendants de CA ?

5. On constate une évolution progressive dans la composition des conseils d’administration

6. Doit-on limiter le nombre d’années qu’un administrateur siège à un conseil afin de préserver son indépendance ?

7. Manuel de saine gouvernance au Canada

8. Étude sur le mix des compétences dans la composition des conseils d’administration

9. Indice de diversité de genre | Equilar

10. Le conseil d’administration est garant de la bonne conduite éthique de l’organisation !

 

Si vous souhaitez voir l’ensemble des parutions, je vous invite à vous rendre sur le Lien vers les 43 articles publiés sur LinkedIn depuis 2016

 

Bonne lecture !

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


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

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

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

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

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

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

Bonne lecture !

 

U.S. Board Diversity Trends in 2019

 

 

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

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

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

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

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

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

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

Board Refreshment

 

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

 

Proposals by Category

 

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

 

Proposals by Category

Gender Diversity

 

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

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

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

 

Proposals by Category

 

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

 

Proposals by Category

Ethnic Diversity

 

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

 

Proposals by Category

 

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

 

Proposals by Category

Director Skills

 

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

 

Proposals by Category

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

Proposals by Category

Age Diversity

 

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

 

Proposals by Category

 

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

 

Proposals by Category

The Changing Landscape for U.S. Boards

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

Guide pratique à l’intention des administrateurs qui cible les situations problématiques


Voici un guide pratique à l’intention des administrateurs de sociétés qui aborde les principales questions de gouvernance auxquelles ils sont confrontés.

Ce guide publié par Katherine Henderson et Amy Simmerman, associés de la firme Wilson Sonsini Goodrich & Rosati, est un outil indispensable pour les administrateurs, mais surtout pour les présidents de conseil.

Les principaux thèmes abordés dans ce document sont les suivants :

    • Le but de l’entreprise et le rôle des parties prenantes ;
    • Le processus de délibération du conseil et la gestion des informations de nature corporative ;
    • L’indépendance des administrateurs et les conflits d’intérêts ;
    • Les conflits d’intérêt des actionnaires de contrôle ;
    • La formation des comités du conseil lors de situations délicates ;
    • Les procès-verbaux ;
    • La découverte de dossiers et de communications électroniques du CA par des actionnaires ;
    • Les obligations de surveillance des administrateurs et des dirigeants ;
    • Les informations relatives à la concurrence et aux occasions d’affaires de l’entreprise ;
    • La rémunération des administrateurs et l’approbation des actionnaires ;
    • La planification de la relève des administrateurs et des dirigeants.

Chaque point ci-dessus fait l’objet de conseils pratiques à l’intention du conseil d’administration. Voici un bref extrait du guide.

Vous pouvez télécharger le document complet en cliquant sur le lien ci-dessous.

Bonne lecture !

A Guidebook to Boardroom Governance Issues

 

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In recent years, we have seen boards and management increasingly grapple with a recurring set of governance issues in the boardroom. This publication is intended to distill the most prevalent issues in one place and provide our clients with a useful and practical overview of the state of the law and appropriate ways to address complex governance problems. This publication is designed to be valuable both to public and private companies, and various governance issues overlap across those spaces, although certainly some of these issues will take on greater prominence depending on whether a company is public or private. There are other important adjacent topics not covered in this publication—for example, the influence of stockholder activism or the role of proxy advisory firms. Our focus here is on the most sensitive issues that arise internally within the boardroom, to help directors and management run the affairs of the corporation responsibly and limit their own exposure in the process.

Répertoire des articles en gouvernance publiés sur LinkedIn


L’un des moyens utilisés pour mieux faire connaître les grandes tendances en gouvernance de sociétés est la publication d’articles choisis sur ma page LinkedIn.

Ces articles sont issus des parutions sur mon blogue Gouvernance | Jacques Grisé

Depuis janvier 2016, j’ai publié un total de 43 articles sur ma page LinkedIn.

Aujourd’hui, je vous propose la liste des 10 articles que j’ai publiés à ce jour en 2019 :

 

Liste des 10 articles publiés à ce jour en 2019

 

Image associée

 

 

1, Les grandes firmes d’audit sont plus sélectives dans le choix de leurs mandats

2. Gouvernance fiduciaire et rôles des parties prenantes (stakeholders)

3. Problématiques de gouvernance communes lors d’interventions auprès de diverses organisations – Partie I Relations entre président du CA et DG

4. L’âge des administrateurs de sociétés représente-t-il un facteur déterminant dans leur efficacité comme membres indépendants de CA ?

5. On constate une évolution progressive dans la composition des conseils d’administration

6. Doit-on limiter le nombre d’années qu’un administrateur siège à un conseil afin de préserver son indépendance ?

7. Manuel de saine gouvernance au Canada

8. Étude sur le mix des compétences dans la composition des conseils d’administration

9. Indice de diversité de genre | Equilar

10. Le conseil d’administration est garant de la bonne conduite éthique de l’organisation !

 

Si vous souhaitez voir l’ensemble des parutions, je vous invite à vous rendre sur le Lien vers les 43 articles publiés sur LinkedIn depuis 2016

 

Bonne lecture !

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


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

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

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

 

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

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

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

Bonne lecture !

 

U.S. Board Diversity Trends in 2019

 

 

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

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

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

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

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

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

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

Board Refreshment

 

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

 

Proposals by Category

 

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

 

Proposals by Category

Gender Diversity

 

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

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

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

 

Proposals by Category

 

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

 

Proposals by Category

Ethnic Diversity

 

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

 

Proposals by Category

 

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

 

Proposals by Category

Director Skills

 

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

 

Proposals by Category

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

Proposals by Category

Age Diversity

 

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

 

Proposals by Category

 

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

 

Proposals by Category

The Changing Landscape for U.S. Boards

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

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


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

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

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

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

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

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

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

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

Bonne lecture !

 

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

 

 

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

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

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

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

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

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

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

The complete paper is available for download here.

___________________________________________________________________________________

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

Congédiement du directeur général (DG) par le conseil d’administration | Situation de crise


Cette semaine, je donne la parole à SOPHIE-EMMANUELLE CHEBIN* et à JOANNE DESJARDINS** qui agissent à titre d’auteures invitées sur mon blogue en gouvernance.

Les auteures ont une solide expérience de consultation dans plusieurs grandes sociétés et sont associées de la firme Arsenal Conseils, spécialisée en gouvernance et en stratégie.

Elles sont aussi régulièrement invitées comme conférencières et formatrices dans le domaine de la stratégie et de la gouvernance.

Dans ce billet, qui a d’abord été publié dans le Journal Les Affaires, elles abordent une situation vraiment difficile pour tout conseil d’administration : le congédiement de son directeur général.

Les auteures discutent des motifs liés au congédiement, de l’importance d’une absolue confidentialité et du courage requis de la part des administrateurs.

La publication de ce billet sur mon blogue a été approuvée par les auteurs.

Bonne lecture ! Vos commentaires sont les bienvenus.

 

Lorsque le CA doit congédier le PDG

par

Sophie-Emmanuelle Chebin et Joanne Desjardins

 

Résultats de recherche d'images pour « congédiement PDG »
De plus en plus de PDG congédiés pour des manquements à l’éthique

 

Peu importe le motif, le congédiement du PDG demeure une des décisions les plus difficiles à prendre pour un conseil d’administration. Selon notre expérience, aucun CA n’est jamais tout à fait prêt à faire face à cette situation. Toutefois, certains facteurs peuvent faciliter la gestion de cette crise.

 

Le motif de congédiement influence la rapidité de réaction du conseil d’administration

 

Selon une étude américaine, les administrateurs sont plus prompts et rapides à congédier un PDG qu’autrefois, et ils le font de plus en plus pour des raisons éthiques.

Bien entendu, la décision de congédier le PDG sera plus facile à prendre lorsque le comportement du PDG pose un risque réputationnel pour l’entreprise. C’est notamment le cas en présence de comportements inadéquats, de fraude ou de perte de confiance des clients.

À titre d’exemple, la triste histoire de Brandon Truaxe, qualifié de génie des cosmétiques et fondateur de la marque de cosmétique canadienne The Ordinary, véritable phénomène mondial. L’automne dernier, les actionnaires et administrateurs de Deciem, groupe duquel fait partie la marque ont demandé et obtenu sa destitution, à titre d’administrateur et de PDG de Deciem. Le Groupe Estée Lauder, actionnaire minoritaire et dont un représentant est administrateur, estimait alors que le comportement erratique du PDG, qui a annoncé sans fondement la fermeture de son entreprise et qualifié ses employés de criminels, nuisait à la réputation de son entreprise, de ses administrateurs et de ses actionnaires en plus de compromettre le futur de l’entreprise.

À l’opposé, les administrateurs tergiversant plus longuement lorsque la situation est plus ambiguë et moins cristalline. Stratégie défaillante, équipe de gestion inadéquate ou mise à niveau technologique mal gérée, ces situations ne font pas toujours l’unanimité au sein du conseil à savoir si elles constituent ou non des motifs suffisants de congédiement. Dans ces cas, les discussions seront souvent plus longues et plus partagées.

Une bonne dynamique au sein du conseil d’administration facilite la tâche des administrateurs lorsque survient une crise. Dans ces circonstances, il est essentiel que les administrateurs placent l’intérêt supérieur de l’organisation au sommet de leurs préoccupations. Les intérêts personnels doivent demeurer au vestiaire. Pas toujours facile lorsque le conseil a appuyé un PDG pendant plusieurs années, que celui-ci a contribué à notre recrutement comme administrateur ou que l’entreprise se porte généralement bien, mais que le conseil d’administration juge que le PDG n’est plus la bonne personne pour mener l’organisation vers ses nouveaux défis.

Un CA mobilisé fait une différence lors des prises de décisions difficiles. Cette mobilisation se prépare de longue date. Elle n’apparaît pas de façon spontanée en période de haute tension.

Par ailleurs, les conseils qui mènent, sur une base annuelle, des exercices de simulation de crise sont également plus efficaces dans la prise de décisions difficiles, et sous-pression, tel le congédiement du PDG.

 

Confidentialité absolue

 

Une fois saisi de la question du congédiement du PDG, le conseil d’administration, même sous pression, doit agir rapidement tout en prenant le temps requis pour délibérer. Délicat équilibre à trouver ! Choisir de se départir du PDG est une décision fondamentale qui ne doit pas être prise à la légère. Pour ce faire, certains CA choisissent de mandater le comité exécutif ou un comité ad hoc pour évaluer en profondeur les tenants et aboutissants de la situation. Le CA sera par la suite mis au fait de leurs travaux et en discutera en plénière. Trois choix possibles : supporter, coacher ou congédier.

Dans tous les cas, aucun compromis possible sur la confidentialité des échanges ! Rien de pire qu’une décision de cette nature qui s’ébruite ou qui traîne en longueur. Parlez-en à cette PME des Laurentides dont le sujet du congédiement du PDG a alimenté les discussions de corridor et miné le moral des employés pendant quelques semaines alors que les rencontres du CA sur le sujet se tenaient dans une salle à l’insonorisation sonore…

Congédier le PDG est une chose, choisir son successeur en est une autre. Peu importe qu’une solution par intérim ou permanente soit retenue, le conseil d’administration doit prévoir le futur et la continuité des opérations. Il doit impérativement développer un plan pour la succession du PDG ou activer celui déjà en place. Pendant cette période de transition, les administrateurs doivent être conscients que leur engagement envers l’entreprise pourrait être plus soutenu.

 

Faire face à la musique

 

Enfin, le CA doit s’assurer d’une stratégie de communication impeccable pour le congédiement du PDG. Employés, clients, autorités gouvernementales, les parties prenantes de l’entreprise devront tôt ou tard être mises au fait de ce changement à la tête de l’entreprise. Assurez-vous de développer des messages cohérents et de choisir les bons canaux de communication.


Sophie-Emmanuelle Chebin*, LL.L, MBA, IAS.A, accompagne depuis 20 ans les équipes de direction et les conseils d’administration dans l’élaboration et le déploiement de leurs stratégies d’affaires. Au fil des ans, elle a développé une solide expertise dans les domaines des stratégies de croissance, de la gouvernance et de la gestion des parties prenantes. Joanne Desjardins**, LL.B., MBA, ASC, CRHA, possède une solide expérience comme administratrice de sociétés ; elle rédige actuellement un livre sur la stratégie des entreprises. Elle blogue régulièrement sur la stratégie et la gouvernance.

Recommandations pour l’amélioration de la gouvernance des organismes publics au Québec


Je suis tout à fait d’accord avec la teneur de l’article de l’IGOPP, publié par Yvan Allaire* intitulé « Six mesures pour améliorer la gouvernance des organismes publics au Québec», lequel dresse un état des lieux qui soulève des défis considérables pour l’amélioration de la gouvernance dans le secteur public et propose des mesures qui pourraient s’avérer utiles. Celui-ci fut a été soumis au journal Le Devoir, pour publication.

L’article soulève plusieurs arguments pour des conseils d’administration responsables, compétents, légitimes et crédibles aux yeux des ministres responsables.

Même si la Loi sur la gouvernance des sociétés d’État a mis en place certaines dispositions qui balisent adéquatement les responsabilités des C.A., celles-ci sont poreuses et n’accordent pas l’autonomie nécessaire au conseil d’administration, et à son président, pour effectuer une véritable veille sur la gestion de ces organismes.

Selon l’auteur, les ministres contournent allègrement les C.A., et ne les consultent pas. La réalité politique amène les ministres responsables à ne prendre principalement avis que du PDG ou du président du conseil : deux postes qui sont sous le contrôle et l’influence du ministère du conseil exécutif ainsi que des ministres responsables des sociétés d’État (qui ont trop souvent des mandats écourtés !).

Rappelons, en toile de fond à l’article, certaines dispositions de la loi :

– Au moins les deux tiers des membres du conseil d’administration, dont le président, doivent, de l’avis du gouvernement, se qualifier comme administrateurs indépendants.

– Le mandat des membres du conseil d’administration peut être renouvelé deux fois

– Le conseil d’administration doit constituer les comités suivants, lesquels ne doivent être composés que de membres indépendants :

1 ° un comité de gouvernance et d’éthique ;

2 ° un comité d’audit ;

3 ° un comité des ressources humaines.

– Les fonctions de président du conseil d’administration et de président-directeur général de la société ne peuvent être cumulées.

– Le ministre peut donner des directives sur l’orientation et les objectifs généraux qu’une société doit poursuivre.

– Les conseils d’administration doivent, pour l’ensemble des sociétés, être constitués à parts égales de femmes et d’hommes.

Yvan a accepté d’agir en tant qu’auteur invité dans mon blogue en gouvernance. Voici donc son article.

 

Six mesures pour améliorer la gouvernance des organismes publics au Québec

par Yvan Allaire*

 

La récente controverse à propos de la Société immobilière du Québec a fait constater derechef que, malgré des progrès certains, les espoirs investis dans une meilleure gouvernance des organismes publics se sont dissipés graduellement. Ce n’est pas tellement les crises récurrentes survenant dans des organismes ou sociétés d’État qui font problème. Ces phénomènes sont inévitables même avec une gouvernance exemplaire comme cela fut démontré à maintes reprises dans les sociétés cotées en Bourse. Non, ce qui est remarquable, c’est l’acceptation des limites inhérentes à la gouvernance dans le secteur public selon le modèle actuel.

 

535284-membres-conseils-administration-16-societes

 

En fait, propriété de l’État, les organismes publics ne jouissent pas de l’autonomie qui permettrait à leur conseil d’administration d’assumer les responsabilités essentielles qui incombent à un conseil d’administration normal : la nomination du PDG par le conseil (sauf pour la Caisse de dépôt et placement, et même pour celle-ci, la nomination du PDG par le conseil est assujettie au veto du gouvernement), l’établissement de la rémunération des dirigeants par le conseil, l’élection des membres du conseil par les « actionnaires » sur proposition du conseil, le conseil comme interlocuteur auprès des actionnaires.

Ainsi, le C.A. d’un organisme public, dépouillé des responsabilités qui donnent à un conseil sa légitimité auprès de la direction, entouré d’un appareil gouvernemental en communication constante avec le PDG, ne peut que difficilement affirmer son autorité sur la direction et décider vraiment des orientations stratégiques de l’organisme.

Pourtant, l’engouement pour la « bonne » gouvernance, inspirée par les pratiques de gouvernance mises en place dans les sociétés ouvertes cotées en Bourse, s’était vite propagé dans le secteur public. Dans un cas comme dans l’autre, la notion d’indépendance des membres du conseil a pris un caractère mythique, un véritable sine qua non de la « bonne » gouvernance. Or, à l’épreuve, on a vite constaté que l’indépendance qui compte est celle de l’esprit, ce qui ne se mesure pas, et que l’indépendance qui se mesure est sans grand intérêt et peut, en fait, s’accompagner d’une dangereuse ignorance des particularités de l’organisme à gouverner.

Ce constat des limites des conseils d’administration que font les ministres et les ministères devrait les inciter à modifier ce modèle de gouvernance, à procéder à une sélection plus serrée des membres de conseil, à prévoir une formation plus poussée des membres de C.A. sur les aspects substantifs de l’organisme dont ils doivent assumer la gouvernance.

Or, l’État manifeste plutôt une indifférence courtoise, parfois une certaine hostilité, envers les conseils et leurs membres que l’on estime ignorants des vrais enjeux et superflus pour les décisions importantes.

Évidemment, le caractère politique de ces organismes exacerbe ces tendances. Dès qu’un organisme quelconque de l’État met le gouvernement dans l’embarras pour quelque faute ou erreur, les partis d’opposition sautent sur l’occasion, et les médias aidant, le gouvernement est pressé d’agir pour que le « scandale » s’estompe, que la « crise » soit réglée au plus vite. Alors, les ministres concernés deviennent préoccupés surtout de leur contrôle sur ce qui se fait dans tous les organismes sous leur responsabilité, même si cela est au détriment d’une saine gouvernance.

Ce brutal constat fait que le gouvernement, les ministères et ministres responsables contournent les conseils d’administration, les consultent rarement, semblent considérer cette agitation de gouvernance comme une obligation juridique, un mécanisme pro-forma utile qu’en cas de blâme à partager.

Prenant en compte ces réalités qui leur semblent incontournables, les membres des conseils d’organismes publics, bénévoles pour la plupart, se concentrent alors sur les enjeux pour lesquels ils exercent encore une certaine influence, se réjouissent d’avoir cette occasion d’apprentissage et apprécient la notoriété que leur apporte dans leur milieu ce rôle d’administrateur.

Cet état des lieux, s’il est justement décrit, soulève des défis considérables pour l’amélioration de la gouvernance dans le secteur public. Les mesures suivantes pourraient s’avérer utiles :

  1. Relever considérablement la formation donnée aux membres de conseil en ce qui concerne les particularités de fonctionnement de l’organisme, ses enjeux, ses défis et critères de succès. Cette formation doit aller bien au-delà des cours en gouvernance qui sont devenus quasi-obligatoires. Sans une formation sur la substance de l’organisme, un nouveau membre de conseil devient une sorte de touriste pendant un temps assez long avant de comprendre suffisamment le caractère de l’organisation et son fonctionnement.
  2. Accorder aux conseils d’administration un rôle élargi pour la nomination du PDG de l’organisme ; par exemple, le conseil pourrait, après recherche de candidatures et évaluation de celles-ci, recommander au gouvernement deux candidats pour le choix éventuel du gouvernement. Le conseil serait également autorisé à démettre un PDG de ses fonctions, après consultation du gouvernement.
  3. De même, le gouvernement devrait élargir le bassin de candidats et candidates pour les conseils d’administration, recevoir l’avis du conseil sur le profil recherché.
  4. Une rémunération adéquate devrait être versée aux membres de conseil ; le bénévolat en ce domaine prive souvent les organismes de l’État du talent essentiel au succès de la gouvernance.
  5. Rendre publique la grille de compétences pour les membres du conseil dont doivent se doter la plupart des organismes publics ; fournir une information détaillée sur l’expérience des membres du conseil et rapprocher l’expérience/expertise de chacun de la grille de compétences établie. Cette information devrait apparaître sur le site Web de l’organisme.
  6. Au risque de trahir une incorrigible naïveté, je crois que l’on pourrait en arriver à ce que les problèmes qui surgissent inévitablement dans l’un ou l’autre organisme public soient pris en charge par le conseil d’administration et la direction de l’organisme. En d’autres mots, en réponse aux questions des partis d’opposition et des médias, le ministre responsable indique que le président du conseil de l’organisme en cause et son PDG tiendront incessamment une conférence de presse pour expliquer la situation et présenter les mesures prises pour la corriger. Si leur intervention semble insuffisante, alors le ministre prend en main le dossier et en répond devant l’opinion publique.

_______________________________________________

*Yvan Allaire, Ph. D. (MIT), MSRC Président exécutif du conseil, IGOPP Professeur émérite de stratégie, UQÀM

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


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

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

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

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

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

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

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

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

Bonne lecture !

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

 

 

figure 3

 

 

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

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

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

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

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

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

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

The complete paper is available for download here.

___________________________________________________________________________________

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

De nombreux programmes de formation continue à l’intention des administrateurs de sociétés


Que l’on soit soumis à une politique de formation continue ou non, janvier est un bon moment pour planifier des formations d’appoint.

Ayant une bonne connaissance des formations offertes aux membres de conseils d’administration, je me permets de vous suggérer les formations offertes par le Collège des administrateurs de sociétés (CAS).

Les formations du Collège sont à la fine pointe en matière de perfectionnement des administrateurs.

En plus de leurs formations spécialisées (PME, TI, OBNL), le Collège offre des programmes de perfectionnement pour les administrateurs (ASC ou non) qui sont variés et pertinents.

De plus, je vois que les formations sont offertes en présentiel et même en ligne. Voilà un bon moyen de cumuler des heures de formation continue, sans même se déplacer !

Bonne lecture !

 

Entête programme de perfectionnement

 

 

FAIRE RAYONNER L’EXCELLENCE DES ADMINISTRATEURS DE SOCIÉTÉS CERTIFIÉS

Nouvelles perspectives pour la gouvernance en 2018


Aujourd’hui, je vous propose la lecture d’un excellent article de Martin Lipton* sur les nouvelles perspectives de la gouvernance en 2018. Cet article est publié sur le site du Harvard Law School Forum on Corporate Governance.

Après une brève introduction portant sur les meilleures pratiques observées dans les entreprises cotées, l’auteur se penche sur les paramètres les plus significatifs de la nouvelle gouvernance.

Les thèmes suivants sont abordés dans un contexte de renouvellement de la gouvernance pour le futur :

  1. La notion de l’actionnariat élargie pour tenir compte des parties prenantes ;
  2. L’importance de considérer le développement durable et la responsabilité sociale des entreprises ;
  3. L’adoption de stratégies favorisant l’engagement à long terme ;
  4. La nécessité de se préoccuper de la composition des membres du CA ;
  5. L’approche à adopter eu égard aux comportements d’actionnaires/investisseurs activistes ;
  6. Les attentes eu égard aux rôles et responsabilités des administrateurs.

À l’approche de la nouvelle année 2018, cette lecture devrait compter parmi les plus utiles pour les administrateurs et les dirigeants d’entreprises ainsi que pour toute personne intéressée par l’évolution des pratiques de gouvernance.

Bonne lecture ! Vos commentaires sont appréciés.

 

Some Thoughts for Boards of Directors in 2018

 

 

Introduction

 

As 2017 draws to a conclusion and we reflect on the evolution of corporate governance since the turn of the millennium, a recurring question percolating in boardrooms and among shareholders and other stakeholders, academics and politicians is: what’s next on the horizon for corporate governance? In many respects, we seem to have reached a point of relative stasis. The governance and takeover defense profiles of U.S. public companies have been transformed by the widespread adoption of virtually all of the “best practices” advocated to enhance the rights of shareholders and weaken takeover defenses.

While the future issues of corporate governance remain murky, there are some emerging themes that portend a potentially profound shift in the way that boards will need to think about their roles and priorities in guiding the corporate enterprise. While these themes are hardly new, they have been gaining momentum in prompting a rethinking of some of the most basic assumptions about corporations, corporate governance and the path forward.

First, while corporate governance continues to be focused on the relationship between boards and shareholders, there has been a shift toward a more expansive view that is prompting questions about the broader role and purpose of corporations. Most of the governance reforms of the past few decades targeted the ways in which boards are structured and held accountable to the interests of shareholders, with debates often boiling down to trade-offs between a board-centric versus a more shareholder-centric framework and what will best create shareholder value. Recently, efforts to invigorate a more long-term perspective among both corporations and their investors have been laying the groundwork for a shift from these process-oriented debates to elemental questions about the basic purpose of corporations and how their success should be measured and defined.

In particular, sustainability has become a major, mainstream governance topic that encompasses a wide range of issues such as climate change and other environmental risks, systemic financial stability, labor standards, and consumer and product safety. Relatedly, an expanded notion of stakeholder interests that includes employees, customers, communities, and the economy and society as a whole has been a developing theme in policymaking and academic spheres as well as with investors. As summarized in a 2017 report issued by State Street Global Advisor,

“Today’s investors are looking for ways to put their capital to work in a more sustainable way, one focused on long-term value creation that enables them to address their financial goals and responsible investing needs. So, for a growing number of institutional investors, the environmental, social and governance (ESG) characteristics of their portfolio are key to their investment strategy.”

While both sustainability and expanded constituency considerations have been emphasized most frequently in terms of their impact on long-term shareholder value, they have also been prompting fresh dialogue about the societal role and purpose of corporations.

Another common theme that underscores many of the corporate governance issues facing boards today is that corporate governance is inherently complex and nuanced, and less amenable to the benchmarking and quantification that was a significant driver in the widespread adoption of corporate governance “best practices.” Prevailing views about what constitutes effective governance have morphed from a relatively binary, check-the-box mentality—such as whether a board is declassified, whether shareholders can act by written consent and whether companies have adopted majority voting standards—to tackling questions such as how to craft a well-rounded board with the skills and experiences that are most relevant to a particular corporation, how to effectively oversee the company’s management of risk, and how to forge relationships with shareholders that meaningfully enhance the company’s credibility. Companies and investors alike have sought to formulate these “next generation” governance issues in a way that facilitates comparability, objective assessment and accountability. For example, many companies have been including skills matrices in their proxy statements to show, in a visual snapshot, that their board composition encompasses appropriate skills and experiences. Yet, to the extent that complicated governance issues cannot be reduced to simple, user-friendly metrics, it remains to be seen whether this will prompt new ways of defining “good” corporate governance that require a deeper understanding of companies and their businesses, and the impact that could have on the expectations and practices of stakeholders.

Against this backdrop, a few of the more significant issues that boards of directors will face in the coming year, as well as an overview of some key roles and responsibilities, are highlighted below. Parts II through VI contain brief summaries of some of the leading proposals and thinking for corporate governance of the future. In Part VII, we turn to the issues boards of directors will face in 2018 and suggestions as to how to prepare to deal with them.

 

Expanded Stakeholders

 

The primacy of shareholder value as the exclusive objective of corporations, as articulated by Milton Friedman and then thoroughly embraced by Wall Street, has come under scrutiny by regulators, academics, politicians and even investors. While the corporate governance initiatives of the past year cannot be categorized as an abandonment of the shareholder primacy agenda, there are signs that academic commentators, legislators and some investors are looking at more nuanced and tempered approaches to creating shareholder value.

In his 2013 book, Firm Commitment: Why the Corporation is Failing Us and How to Restore Trust in It, and a series of brilliant articles and lectures, Colin Mayer of the University of Oxford has convincingly rejected shareholder value primacy and put forth proposals to reconceive the business corporation so that it is committed to all its stakeholders, including the community and the general economy. His new book, Prosperity: Better Business Makes the Greater Good, to be published by Oxford University Press in 2018, continues the theme of his earlier publications and will be required reading.

Similarly, an influential working paper by Oliver Hart and Luigi Zingales argues that the appropriate objective of the corporation is shareholder welfare rather than shareholder wealth. Hart and Zingales advocate that corporations and asset managers should pursue policies consistent with the preferences of their investors, specifically because corporations may be able to accomplish objectives that shareholders acting individually cannot. In such a setting, the implicit separability assumption underlying Milton Friedman’s theory of the purpose of the firm fails to produce the best outcome for shareholders. Indeed, even though Hart and Zingales propose a revision that remains shareholder-centered, by recognizing the unique capability of corporations to engage in certain kinds of activities, their theory invites a careful consideration of other goals such as sustainability, board diversity and employee welfare, and even such social concerns, as, for example, reducing mass violence or promoting environmental stewardship. Such a model of corporate decision-making emphasizes the importance of boards establishing a relationship with significant shareholders to understand shareholder goals, beyond simply assuming that an elementary wealth maximization framework is the optimal path.

Perhaps closer to a wholesale rejection of the shareholder primacy agenda, an article by Joseph L. Bower and Lynn S. Paine, featured in the May-June 2017 issue of the Harvard Business Review, attacks the fallacies of the economic theories that have been used since 1970 to justify shareholder-centric corporate governance, short-termism and activist attacks on corporations. In questioning the benefits of hedge fund activism, Bower and Paine argue that some of the value purportedly created for shareholders by activists is not actually value created, but rather value transferred from other parties or from the public purse, such as shifting a company’s tax domicile to a lower-tax jurisdiction or eliminating exploratory research and development. The article supports the common sense notion that boards have a fiduciary duty not just to shareholders, but also to employees, customers and the community—a constituency theory of governance penned into law in a number of states’ business corporation laws.

Moreover, this theme has been metastasizing from a theoretical debate into specific reform initiatives that, if implemented, could have a direct impact on boards. For example, Delaware and 32 other states and the District of Columbia have passed legislation approving a new corporate form—the benefit corporation —a for-profit corporate entity with expanded fiduciary obligations of boards to consider other stakeholders in addition to shareholders. Benefit corporations are mandated by law to consider their overall positive impact on society, their workers, the communities in which they operate and the environment, in addition to the goal of maximizing shareholder profit.

This broader sense of corporate purpose has been gaining traction among shareholders. For example, the endorsement form for the Principles published by the Investor Stewardship Group in 2017 includes:

“[I]t is the fiduciary responsibility of all asset managers to conduct themselves in accordance with the preconditions for responsible engagement in a manner that accrues to the best interests of stakeholders and society in general, and that in so doing they’ll help to build a framework for promoting long-term value creation on behalf of U.S. companies and the broader U.S. economy.”

Notions of expanded stakeholder interests have often been incorporated into the concept of long-termism, and advocating a long-term approach has also entailed the promotion of a broader range of stakeholder interests without explicitly eroding the primacy of shareholder value. Recently, however, the interests of other stakeholders have increasingly been articulated in their own right rather than as an adjunct to the shareholder-centric model of corporate governance. Ideas about the broader social purpose of corporations have the potential to drive corporate governance reforms into uncharted territory requiring navigation of new questions about how to measure and compare corporate performance, how to hold companies accountable and how to incentivize managers.

 

Sustainability

 

The meaning of sustainability is no longer limited to describing environmental practices, but rather more broadly encompasses the sustainability of a corporation’s business model in today’s fast-changing world. The focus on sustainability encompasses the systemic sustainability of public markets and pressures boards to think about corporate strategy and how governance should be structured to respond to and compete in this environment.

Recently, the investing world has seen a rise of ESG-oriented funds—previously a small, niche segment of the investment community. Even beyond these specialized funds, ESG has also become a focus of a broad range of traditional investment funds and institutional investors. For instance, BlackRock and State Street both offer their investors products that specifically focus on ESG-oriented topics like climate change and impact investing—investing with an intention of generating a specific social or environmental outcome alongside financial returns.

At the beginning of 2017, State Street’s CEO Ronald P. O’Hanley wrote a letter advising the boards of the companies in which State Street invests that State Street defines sustainability “as encompassing a broad range of environmental, social and governance issues that include, for example, effective independent board leadership and board composition, diversity and talent development, safety issues, and climate change.” The letter was a reminder that broader issues that impact all of a company’s stakeholders may have a material effect on a company’s ability to generate returns. Chairman and CEO of BlackRock, Laurence D. Fink remarked similarly in his January 2017 letter that

“[e]nvironmental, social and governance factors relevant to a company’s business can provide essential insights into management effectiveness and thus a company’s long-term prospects. We look to see that a company is attuned to the key factors that contribute to long-term growth: sustainability of the business model and its operations, attention to external and environmental factors that could impact the company, and recognition of the company’s role as a member of the communities in which it operates.”

Similarly, the UN Principles for Responsible Investment remind corporations that ESG factors should be incorporated into all investment decisions to better manage risk and generate sustainable, long-term returns.

Shareholders’ engagement with ESG issues has also increased. Previously, ESG was somewhat of a fringe issue with ESG-related shareholder proxy proposals rarely receiving significant shareholder support. This is no longer the case. In the 2017 proxy season, the two most common shareholder proposal topics related to social (201 proposals) and environmental (144 proposals, including 69 on climate change) issues, as opposed to 2016’s top two topics of proxy access (201) and social issues (160). Similar to cybersecurity and other risk management issues, sustainability practices involve the nuts and bolts of operations—e.g., life-cycle assessments of a product and management of key performance indicators (KPIs) using management information systems that facilitate internal and public reporting—and provide another example of an operational issue that has become a board/governance issue.

The expansion of sustainability requires all boards—not just boards of companies with environmentally sensitive businesses—to be aware of and be ready to respond to ESG-related concerns. The salient question is whether “best” sustainability practices will involve simply the “right” messaging and disclosures, or whether investors and companies will converge on a method to measure sustainability practices that affords real impact on capital allocation, risk-taking and proactive—as opposed to reactive—strategy.

Indeed, measurement and accountability are perhaps the elephants in the room when it comes to sustainability. Many investors appear to factor sustainability into their investing decisions. Other ways to measure sustainability practices include the presence of a Chief Sustainability Officer or Corporate Responsibility Committee. However, while there are numerous disclosure frameworks relating to sustainability and ESG practices, there is no centralized ESG rating system. Further, rating methodologies and assessments of materiality vary widely across ESG data providers and disclosure requirements vary across jurisdictions.

Pending the development of clear and agreed standards to benchmark performance on ESG issues, boards of directors should focus on understanding how their significant investors value and measure ESG issues, including through continued outreach and engagement with investors focusing on these issues, and should seek tangible agreed-upon methodologies to address these areas, while also promoting the development of improved metrics and disclosure.

Promoting a Long-Term Perspective

 

As the past year’s corporate governance conversation has explored considerations outside the goal of maximizing shareholder value, the conversation within the shareholder value maximization framework has also continued to shift toward an emphasis on long-term value rather than short term. A February 2017 discussion paper from the McKinsey Global Institute in cooperation with Focusing Capital on the Long Term found that long-term focused companies, as measured by a number of factors including investment, earnings quality and margin growth, generally outperformed shorter-term focused companies in both financial and other performance measures. Long-term focused companies had greater, and less volatile, revenue growth, more spending on research and development, greater total returns to shareholders and more employment than other firms.

This empirical evidence that corporations focused on stakeholders and long-term investment contribute to greater economic growth and higher GDP is consistent with innovative corporate governance initiatives. A new startup, comprised of veterans of the NYSE and U.S. Treasury Department, is working on creating the “Long-Term Stock Exchange”—a proposal to build and operate an entirely new stock exchange where listed companies would have to satisfy not only all of the normal SEC requirements to allow shares to trade on other regulated U.S. stock markets but, in addition, other requirements such as tenured shareholder voting power (permitting shareholder voting to be proportionately weighted by the length of time the shares have been held), mandated ties between executive pay and long-term business performance and disclosure requirements informing companies who their long-term shareholders are and informing investors of what companies’ long-term investments are.

In addition to innovative alternatives, numerous institutional investors and corporate governance thought leaders are rethinking the mainstream relationship between all boards of directors and institutional investors to promote a healthier focus on long-term investment. While legislative reform has taken a stronger hold in the U.K. and Europe, leading American companies and institutional investors are pushing for a private sector solution to increase long-term economic growth. Commonsense Corporate Governance Principles and The New Paradigm: A Roadmap for an Implicit Corporate Governance Partnership Between Corporations and Investors to Achieve Sustainable Long-Term Investment and Growth were published in hopes of recalibrating the relationship between boards and institutional investors to protect the economy against the short-term myopic approach to management and investing that promises to impede long-term economic prosperity. Under a similar aim, the Investor Stewardship Group published its Stewardship Principles and Corporate Governance Principles, set to become effective in January 2018, to establish a framework with six principles for investor stewardship and six principles for corporate governance to promote long-term value creation in American business. A Synthesized Paradigm for Corporate Governance, Investor Stewardship, and Engagement provides a synthesis of these and others in the hope that companies and investors would agree on a common approach. In fact, over 100 companies to date have signed The Compact for Responsive and Responsible Leadership: A Roadmap for Sustainable Long-Term Growth and Opportunity, sponsored by the World Economic Forum, which includes the key features of The New Paradigm.

Similarly, the BlackRock Investment Stewardship team has proactively outlined five focus areas for its engagement efforts: Governance, Corporate Strategy for the Long-Term, Executive Compensation that Promotes Long-Termism, Disclosure of Climate Risks, and Human Capital Management. BlackRock’s outline reflects a number of key trends, including heightened transparency by institutional investors, more engagement by “passive” investors, and continued disintermediation of proxy advisory firms. In the United Kingdom, The Investor Forum was founded to provide an intermediary to represent the views of its investor members to investee companies in the hope of reducing activism, and appears to have achieved a successful start.

Similarly, in June 2017, the Coalition for Inclusive Capitalism and Ernst & Young jointly announced the launch of a project on long-term value creation. Noting among other elements that trust and social cohesion are necessary ingredients for the long-term success of capitalism, the project will emphasize reporting mechanisms and credible measurements supporting long-term value, developing and testing a framework to better reflect the full value companies create beyond simply financial value. There is widespread agreement that focusing on long-term investment will promote long-term economic growth. The next step is a consensus between companies and investors on a common path of action that will lead to restored trust and cohesion around long-term goals.

 

Board Composition

 

The corporate governance conversation has become increasingly focused on board composition, including board diversity. Recent academic studies have confirmed and expanded upon existing empirical evidence that hedge fund activism has been notably counterproductive in increasing gender diversity—yet another negative externality of this type of activism. Statistical evidence supports the hypothesis that the rate of shareholder activism is higher toward female CEOs holding all else equal, including industries, company sizes and levels of performance. A study forthcoming in the Journal of Applied Psychology investigated the reasons that hedge fund activists seemingly ignore the evidence for gender-diverse boards in their choices for director nominees and disproportionately target female CEOs. The authors suggest these reasons may include subconscious biases of hedge funds against women leaders due to perceptions and cultural attitudes.

In the United Kingdom, the focus on board diversity has spread into policy. The House of Commons Business, Energy, and Industrial Strategy Committee report on Corporate Governance, issued in 2017, included recommendations for improving ethnic, gender and social diversity of boards, noting that “[to] be an effective board, individual directors need different skills, experience, personal attributes and approaches.” The U.K. government’s response to this report issued in September 2017 notes its agreement on various diversity-related issues, stating that the “Government agrees with the Committee that it makes business sense to recruit directors from as broad a base as possible across the demographic of the UK” and further, tying into themes of stakeholder capitalism, that the “Government believes that greater diversity within the boardroom can help companies connect with their workforces, supply chains, customers and shareholders.”

In the United States, institutional investors are focused on a range of board composition issues, including term limits, board refreshment, diversity, skills matrices and board evaluation processes, as well as disclosures regarding these issues. In a recent letter, Vanguard explained that it considers the board to be “one of a company’s most critical strategic assets” and looks for a “high-functioning, well-composed, independent, diverse, and experienced board with effective ongoing evaluation practices,” stating that “Good governance starts with a great Board.” The New York Comptroller’s Boardroom Accountability Project 2.0 is focused on increasing diversity of boards in order to strengthen their independence and competency. In connection with launching this campaign, the NYC Pension Funds asked the boards of 151 U.S. companies to disclose the race and gender of their directors alongside board members’ skills in a standardized matrix format. And yet, similar to the difficulty of measuring and comparing sustainability efforts of companies, investors and companies alike continue to struggle with how to measure and judge a board’s diversity, and board composition generally, as the conversation becomes more nuanced. Board composition and diversity aimed at increasing board independence and competency is not a topic that lends itself to a “check-the-box” type measurement.

In light of the heightened emphasis on board composition, boards should consider increasing their communications with their major shareholders about their director selection and nomination processes to show the board understands the importance of its composition. Boards should consider disclosing how new director candidates are identified and evaluated, how committee chairs and the lead director are determined, and how the operations of the board as a whole and the performance of each director are assessed. Boards may also focus on increasing tutorials, facility visits, strategic retreats and other opportunities to increase the directors’ understanding of the company’s business—and communicate such efforts to key shareholders and constituents.

 

Activism

 

Despite the developments and initiatives striving to protect and promote long-term investment, the most dangerous threat to long-term economic prosperity has continued to surge in the past year. There has been a significant increase in activism activity in countries around the world and no slowdown in the United States. The headlines of 2017 were filled with activists who do not fit the description of good stewards of the long-term interests of the corporation. A must-read Bloombergarticle described Paul Singer, founder of Elliott Management Corp., which manages $34 billion of assets, as “aggressive, tenacious and litigious to a fault” and perhaps “the most feared activist investor in the world.” Numerous recent activist attacks underscore that the CEO remains a favored activist target. Several major funds have become more nuanced and taken a merchant banker approach of requesting board representation to assist a company to improve operations and strategy for long-term success. No company is too big for an activist attack. Substantial new capital has been raised by activist hedge funds and several activists have created special purpose funds for investment in a single target. As long as activism remains a serious threat, the economy will continue to experience the negative externalities of this approach to investing—companies attempting to avoid an activist attack are increasingly managed for the short term, cutting important spending on research and development and focusing on short-term profits by effecting share buybacks and paying dividends at the expense of investing in a strategy for long-term growth.

To minimize the impact of activist attacks, boards must focus on building relationships with major institutional investors. The measure of corporate governance success has shifted from checking the right boxes to building the right relationships. Major institutional investors have reiterated their commitment to bringing a long-term perspective to public companies, including, for example, Vanguard, which sent an open letter to directors of public companies world-wide explaining that a long-term perspective informed every aspect of its investment approach. Only by forging relationships of trust and credibility with long-term shareholders can a company expect to gain support for its long-term strategy when it needs it. In many instances, when an activist does approach, a previously established relationship provides a foundation for management and the board to persuade key shareholders that short-term activism is not in their best interest—an effort that is already showing some promise. General Motors’ resounding defeat of Greenlight Capital’s attempt to gain shareholder approval to convert its common stock into two classes shows a large successful company’s ability to garner the

support of its institutional investors against financial engineering. Trian’s recent proxy fight against Procter & Gamble shows the importance of proactively establishing relationships with long-term shareholders. Given Trian’s proven track record of success in urging changes in long-term strategy, Nelson Peltz was able to gain support for a seat on P&G’s board from proxy advisors and major institutional investors. We called attention to importantlessons from this proxy fight (discussed on the Forum here and here).

 

Spotlight on Boards

 

The ever-evolving challenges facing corporate boards prompts an updated snapshot of what is expected from the board of directors of a major public company—not just the legal rules, but also the aspirational “best practices” that have come to have equivalent influence on board and company behavior. In the coming year, boards will be expected to:

Oversee corporate strategy and the communication of that strategy to investors;

Set the tone at the top to create a corporate culture that gives priority to ethical standards, professionalism, integrity and compliance in setting and implementing strategic goals;

Choose the CEO, monitor the CEO’s and management’s performance and develop a succession plan;

Determine the agendas for board and committee meetings and work with management to assure appropriate information and sufficient time are available for full consideration of all matters;

Determine the appropriate level of executive compensation and incentive structures, with awareness of the potential impact of compensation structures on business priorities and risk-taking, as well as investor and proxy advisor views on compensation;

Develop a working partnership with the CEO and management and serve as a resource for management in charting the appropriate course for the corporation;

Oversee and understand the corporation’s risk management and compliance efforts, and how risk is taken into account in the corporation’s business decision-making; respond to red flags when and if they arise (see Risk Management and the Board of Directors, discussed on the Forum here);

Monitor and participate, as appropriate, in shareholder engagement efforts, evaluate potential corporate governance proposals and anticipate possible activist attacks in order to be able to address them more effectively;

Evaluate the board’s performance on a regular basis and consider the optimal board and committee composition and structure, including board refreshment, expertise and skill sets, independence and diversity, as well as the best way to communicate with investors regarding these issues;

Review corporate governance guidelines and committee charters and tailor them to promote effective board functioning;

Be prepared to deal with crises; and

Be prepared to take an active role in matters where the CEO may have a real or perceived conflict, including takeovers and attacks by activist hedge funds focused on the CEO.

To meet these expectations, major public companies should seek to:

Have a sufficient number of directors to staff the requisite standing and special committees and to meet expectations for diversity;

Have directors who have knowledge of, and experience with, the company’s businesses, even if this results in the board having more than one director who is not “independent”;

Have directors who are able to devote sufficient time to preparing for and attending board and committee meetings;

Meet investor expectations for director age, diversity and periodic refreshment;

Provide the directors with the data that is critical to making sound decisions on strategy, compensation and capital allocation;

Provide the directors with regular tutorials by internal and external experts as part of expanded director education; and

Maintain a truly collegial relationship among and between the company’s senior executives and the members of the board that enhances the board’s role both as strategic partner and as monitor.

______________________________________

*Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisitions and matters affecting corporate policy and strategy. This post is based on a Wachtell Lipton publication by Mr. Lipton, Steven A. Rosenblum, Karessa L. Cain, Sabastian V. Niles, Vishal Chanani, and Kathleen C. Iannone.

Enquête de Deloitte sur la diversité des conseils d’administration ! En rappel


Il existe une solide unanimité sur l’importance d’accroître la diversité dans les conseils d’administration.

Mike Fucci, président du conseil de Deloitte, nous présente une excellente infographie* sur le sujet.

Voici un sommaire des thèmes traités dans son article, paru dans Harvard Law School Forum on Corporate Governance.

(1) Perception de la diversité dans les conseils d’administration

Les CA sont d’accord avec la nécessité d’une grande diversité

Les leaders perçoivent clairement les bienfaits de la diversité

Cependant, il y a peu d’administrateurs qui voient le manque de diversité comme un problème majeur !

(2) Recrutement et pratiques d’évaluation

Les CA s’en remettent trop souvent aux critères traditionnels de sélection des administrateurs (grande expérience de management ou de PDG)

Environ la moitié des organisations qui ont des plans de relève n’ont pas de processus de recrutement comportant des habiletés liées à la diversité

Presque toutes les organisations sont conscientes que les politiques concernant la limitation du nombre de mandats et de l’âge sont nécessaires pour assurer le renouvellement du CA

Cependant, les pratiques utilisées semblent limiter la diversité

(3) Nouveau modèle de gouvernance — la mixtocratie

Atteindre un équilibre entre l’expérience souhaitée et la diversité requise

Nécessité de revoir la notion de risque

Faire la promotion du modèle de diversité

Revoir systématiquement la composition du conseil

Redynamiser la planification de la relève

Avoir des objectifs clairs de diversité

 

L’infographie présentée parle d’elle-même. Bonne lecture !

 

 

2017 Board Diversity Survey

 

 

 

Part 1. Perceptions of board diversity

 

The findings in this section show that the survey found nearly universal agreement on the need for diverse skill sets and perspectives on the board, and on the potential benefits of diversity.

 

Boards agree on the need for diversity

 

Note, however, that this finding does not reveal where diversity of skill sets and perspectives are needed. Thus, the skills and perspectives could be those of, say, financial or operating or information
technology executives. Such backgrounds would represent diversity of skills and perspectives, but not the demographic diversity that the term “diversity” usually implies.

Demographic diversity remains an essential goal in that gender and racial differences are key determinates of a person’s experiences, attitudes, frame of reference, and point of view.

As the next finding reveals, however, respondents do not see demographic diversity as enough.

 

Board members see diversity as going beyond basic demographics

 

Nine in ten respondents agree that gender and racial diversity alone does not produce the diversity required for an organization to be innovative or disruptive. This may be surprising, given that gender and racial differences are generally seen as contributing to diverse perspectives. Yet those contributions may be tempered if recruiting and selection methods skew toward candidates with the backgrounds and experiences of white males with executive experience.

More to the point, it would be unfortunate if a focus on diversity of skills and perspectives were to undermine or cloud the focus on gender and racial diversity. In fact, typical definitions of board diversity include a demographic component. Deloitte’s 2016 Board Practices Report found that 53 percent of large-cap and 45 percent of mid-cap organizations disclose gender data on their board’s diversity; the respective numbers for racial diversity are, far lower, however: 18 percent and 9 percent. [1]

So, the deeper questions may be these: How does the board go about defining diversity? Does its definition include gender and racial factors? Does it also include factors such as skills, experiences, and perspectives? Will the board’s practices enable it to achieve diversity along these various lines?

Before turning to practices, we consider the potential benefits of diversity.

 

Leaders overwhelmingly perceive benefits in diversity

 


Taken at face value, these answers indicate that boards believe in diversity, however they go about defining it, for business reasons and not just for its own sake or reasons of social responsibility.

 

…Yet relatively few see a lack of diversity as a top problem

 

The foregoing findings show that leaders believe that boards need greater diversity of skills and perspectives, that demographic diversity alone may not produce that diversity, and that diversity is seen as beneficial in managing innovation, disruption, and business performance. Yet, somewhat surprisingly, few respondents cited a lack of diversity as a top problem.

So, while 95 percent of respondents agree that their board needs to seek out more candidates with diverse skills and perspectives, far smaller percentages cite lack of diversity as among the top problems they face in candidate recruitment or selection.

Does this reflect contentment with current board composition and acceptance of the status quo?

Perhaps, or perhaps not.

However, we can say that many board recruitment and selection practices remain very traditional.

 

Part 2. Recruitment and evaluation practices

 

Board recruitment practices have arguably not kept pace with the desire and need for greater board diversity.

 

Boards still rely on traditional candidate criteria

 

In addition, 81 percent of respondents would expect multiple board members to see a candidate without executive experience as unqualified to serve on the board.

The low percentage of women candidates (16 percent) is striking, as is that of racial minorities (19 percent). However, that may be a logical outcome of a process favoring selecting candidates with board experience—who historically have tended to be white and male.

So, in the recruitment process, board members are often seeking people who tend to be like themselves—and like management. Such a process may help to reinforce a lack of diversity in perspectives and experiences, as well as (in most companies) in gender and race.

Relying on resumes, which reflect organizational and educational experience, helps to reinforce traditional patterns of board composition.

 

About half of organizations have processes focused on diverse skills and disruptive views

 

Given all their other responsibilities, many boards understandably rely on existing recruitment tools and processes. They use resumes, their networks, and executive recruiters—all of which tend to generate results very similar to past results.

However, our current disruptive environment likely calls for more creative approaches to reaching diverse candidates. Some organizations have taken steps to address these needs.

 

Our survey did not assess the nature or extent of the processes for recruiting candidates with diverse skills or perspectives, indicating an area for further investigation.

 

Policies affecting board refreshment

 

Policies, as well as processes, can affect board composition. Low turnover on boards can not only hinder movement toward greater diversity but also lead to myopic views of operations or impaired ability to oversee evolving strategies and risks.

While board members expressed agreement with term and age limits, the latter are far more common. Our separate 2016 Board Practices Report found that 81 percent of large-cap and 74 percent of mid-cap companies have age limits, but only 5 percent and 6 percent, respectively, have term limits. [2] This evidences a large gap between agreement with term limits as an idea and term limits as a practice.

 

Current practices tend to limit diversity

 

Deloitte’s 2016 Board Practices Report also found that 84 percent of large-cap and 90 percent of mid-cap organizations most often rely on current directors’ recommendations of candidates. [3] That same study found that 68 percent and 79 percent, respectively, use a recruiting firm when needed, and that 62 percent and 79 percent use a board skills matrix or similar tool.

Relying on current directors’ recommendations will generally produce candidates much like those directors. Recruiting firms can be valuable, but tend to adopt the client’s view of diversity. Tools such as board competency matrices generally do not account for an organization’s strategy, nor do they provide a very nuanced view of individual board members’ experiences and capabilities. In other words, bringing people with diverse skills, perspectives, and experiences to the board—as well as women and racial and ethnic minorities—requires more robust processes than those currently used by most boards.

 

Part 3. A path forward—The Mixtocracy Model

 

The term meritocracy describes organizational advancement based upon merit—talents and accomplishments—and aims to combat the nepotism and cronyism that traditionally permeated many businesses. However, too often meritocracy results in mirrortocracy in which all directors bring similar perspectives and approaches to governance, risk management, and other board responsibilities.

A board differs from a position, such as chief executive officer or chief financial officer, in that it is a collection of individuals. A board is a team and, like any other team, it requires people who can fulfill specific roles, contribute different skills and views, and work together to achieve certain goals.

Thus, a board can include nontraditional members who will be balanced out by more traditional ones. Many existing recruiting methods do too little to achieve true diversity. The prevalence of those criteria and methods can repeatedly send boards back to the same talent pool, even in the case of women and minority candidates. For example, Deloitte’s 2016 Board Diversity Census shows that female and black directors are far more likely than white male directors to hold multiple Fortune 500 board seats. [4]

Therefore, organizations should consider institutionalizing a succession planning and recruitment process that more closely aligns to their ideal board composition and diversity goals. Here are three ways to potentially do that:

 Look beyond “the tried and true.” Even when boards account for gender and race, current practices may tend to source candidates with similar views. Succession plans should create seats for those who are truly different, for example someone with no board experience but a strong cybersecurity background or someone who more closely mirrors the customer base.

Take a truly analytical approach. Developing the optimal mix on the board calls for considering risks, opportunities, and markets, as well as customers, employees, and other stakeholders. A data-driven analytics tool that assesses management’s strategies, the board’s needs, and desired director attributes can help define the optimal mix in light of those factors.

Use more sophisticated criteria. Look beyond resumes and check-the-box approaches to recruiting women, minorities, and those with the right title. Surface-level diversity will not necessarily generate varying perspectives and innovative responses to disruption. Deep inquiry into a candidate’s outlook, experience, and fit can take the board beyond standard criteria, while prompting the board to more fully consider women and minority candidates—that is, to not see them mainly as women and minority candidates.

To construct and maintain a board that can meet evolving governance, advisory, and risk oversight needs, leaders should also consider the following steps.

 

Rethink risk

 

Digitalization continues to disrupt the business landscape. The ability to not only respond to disruption, but to proactively disrupt, has commonly become a must. Yet boards have historically focused on loss prevention rather than value creation. Every board should ask itself who best can help in ascertaining that management is taking the right risks to innovate and win in the marketplace. The more diversity of thought, perspectives, experiences, and skills a board collectively possesses, the better it can oversee moves into riskier territory in an informed and useful way—and to assist management in making bold decisions that are likely to pay off.

 

Elevate diversity

 

Current definitions of board diversity tend to focus on at-birth traits, such as gender and race. While such diversity is essential, it may promote a check-the-box approach to gender and racial diversity. Boards that include those traits and also enrich them by considering differences gained through employment paths, industry experiences, educational, artistic, and cultural endeavors, international living, and government, military, and other service will more likely achieve a true mix of perspectives
and capabilities.

They may also develop a more holistic vision of gender and racial diversity. After all, woman and minority board members do not want to be “women and minority board members”—they want to be board members. In other words, this approach should aim to generate a fuller view of candidates and board members, as well as more diversity of skills and perspectives and gender and race.

 

Retool board composition

 

Current tools for achieving an optimal mix of directors can generally be classified as simplistic, generic, and outdated. They often help in organizing information, but provide little to no support in identifying strategic needs and aligning a board’s skills, perspectives, and experiences with those needs.

Successful board composition typically demands analysis of data on organizational strategies, customer demographics, industry disruption, and market trends to identify gaps and opportunities. A board should consider not only individual member’s profiles but also assess the board as one working body to ascertain that complementary characteristics and capabilities are in place or can be put in place.

A tool to support this analysis should be the initial input into the succession planning and recruitment process. It should also be used in ongoing assessments to help ensure that the board equals a whole that is greater than the sum of its parts.

 

Revitalize succession planning

 

The process of filling an open board position may be seen as similar to that for recruiting C-suite candidates. But that would ignore the fact that the board is a collection of individuals rather than a single role. An approach geared to creating a mixtocracy can strengthen the board by combining individual differences in a deliberate manner. Differing gender and ethnic backgrounds as well as skills, perspectives, and experiences can make for more rigorous, far-reaching, and thought-provoking discussions, inquiries, and challenges. This can enable the board to provide a more effective counterbalance to management as well as better support in areas such as innovation, disruption, and assessments of strategies, decisions, and underlying assumptions.

In plans for board succession, the uniqueness of thought an individual will bring to the table can be as important as his or her more ostensible characteristics and accomplishments.

 

Toward greater board diversity

 

Given its responsibility to provide guidance on strategy, oversight of risk, governance of practices, and protection of shareholders’ interests, the board arguably has a greater need for diversity than the C-suite, where diversity also enriches management. The path forward remains long, but it is becoming increasing clear as boards continue to work toward achieving greater diversity on multiple fronts.

____________________________________

Endnotes

1 2016 Boards Practices Report – A transparent look at the work of the board. Tenth edition, 2017, Society for Corporate Governance and Deloitte Development LLC.(go back)

2 ibid.(go back)

3 ibid.(go back)

4 Missing Pieces Report: The 2016 Board Diversity Census of Women and Minorities on Fortune 500 Boards, 2017, Deloitte Development LLC.(go back)


*The 2017 board diversity survey was conducted in spring 2017 among 300 board members and C-suite executives at U.S. companies with at least $50 million in annual revenue and at least 1,000 employees. Conducted by Wakefield Research via an email invitation and online questionnaire, the survey sought to ascertain respondents’ perspectives on board diversity and their organizations’ criteria and practices for recruiting and selecting board members. The margin of error for this study is +/- 5.7 percentage points at the 95 percent confidence level.

Éléments clés à considérer par les administrateurs dans la gouvernance des organisations


Récemment, je suis intervenu auprès du conseil d’administration d’une OBNL et j’ai animé une discussion tournant autour des thèmes suivants en affirmant certains principes de gouvernance que je pense être incontournable.

J’ai regroupé les thèmes en 15 volets :

(1) Le conseil d’administration est souverain — il est l’ultime organe décisionnel.

(2) Le rôle des administrateurs est d’assurer la saine gestion de l’organisation en fonction d’objectifs établis. L’administrateur a un rôle de fiduciaire, non seulement envers les membres qui les ont élus, mais aussi envers les parties prenantes de toute l’organisation. Son rôle comporte des devoirs et des responsabilités envers celle-ci.

(3) Les administrateurs ont un devoir de surveillance et de diligence ; ils doivent cependant s’assurer de ne pas s’immiscer dans la gestion de l’organisation (« nose in, fingers out »).

(4) La décision la plus importante du conseil d’administration est le choix du premier dirigeant, c’est-à-dire le directeur général de l’organisation.

(5) Les administrateurs élus par l’assemblée générale ne sont pas porteurs des intérêts propres à leur groupe ; ce sont les intérêts supérieurs de l’organisation qui priment.

(6) Le président du conseil est le chef d’orchestre du groupe d’administrateurs ; il doit être en étroite relation avec le premier dirigeant et bien comprendre les coulisses du pouvoir. Il doit de plus s’assurer que chaque administrateur apporte une valeur ajoutée aux décisions du CA.

Résultats de recherche d'images pour « gouvernance des organisations »

(7) Les membres du conseil doivent entretenir des relations de collaboration et de respect entre eux ; ils doivent viser les consensus et exprimer leur solidarité, notamment par la confidentialité des échanges.

(8) Les administrateurs doivent être bien préparés pour les réunions du conseil et ils doivent poser les bonnes questions afin de bien comprendre les enjeux et de décider en toute indépendance d’esprit. Pour ce faire, ils peuvent tirer profit de l’avis d’experts indépendants.

(9) La composition du conseil devrait refléter la diversité de l’organisation. On doit privilégier l’expertise, la connaissance de l’industrie et la complémentarité.

(10) Le conseil d’administration doit accorder toute son attention aux orientations stratégiques de l’organisation et passer le plus clair de son temps dans un rôle de conseil stratégique.

(11) Le rôle des comités du conseil (Ressources humaines, audit, gouvernance) est crucial ; ceux-ci doivent alimenter la réflexion des membres du conseil et faire des recommandations.

(12) La nécessité de fonctionner avec un comité exécutif varie selon la configuration du conseil d’administration de l’organisation.

(13) Chaque réunion devrait se conclure par un huis clos, systématiquement inscrit à l’ordre du jour de toutes les rencontres.

(14) Le président du comité de gouvernance doit mettre en place une évaluation du fonctionnement et de la dynamique du conseil.

(15) Les administrateurs doivent prévoir des activités de formation en gouvernance et en éthique.

 

Vos commentaires sont les bienvenus.

Guide pratique à la détermination de la rémunération des administrateurs de sociétés | En rappel


Aujourd’hui, je vous suggère la lecture d’un excellent guide publié par International Corporate Governance Network (ICGN). Ce document présente succinctement les grands principes qui devraient gouverner l’établissement de la rémunération des administrateurs indépendants (« non-executive »).

Il va de soi que la rémunération des administrateurs ne représente qu’une part infime du budget d’une entreprise, et celle-ci est relativement très inférieure aux rémunérations consenties aux dirigeants ! Cependant, il est vital d’apporter une attention particulière à la rémunération des administrateurs, car ceux-ci sont les fiduciaires des actionnaires, ceux qui doivent les représenter, en veillant à la saine gestion de la société.

Il est important que le comité de gouvernance se penche annuellement sur la question de la rémunération des administrateurs indépendants, et que ce comité propose une politique de rémunération qui tient compte du rôle déterminant de ces derniers. Plusieurs variables doivent être prises en ligne de compte notamment, la comparaison avec d’autres entreprises similaires, les responsabilités des administrateurs dans les différents rôles qui leur sont attribués au sein du conseil, la nature de l’entreprise (taille, cycle de développement, type de mission, circonstances particulières, etc.).

Personnellement, je suis d’avis que tous les administrateurs de sociétés obtiennent une compensation pour leurs efforts, même si, dans certains cas, les sommes affectées s’avèrent peu élevées. Les organisations ont avantage à offrir de justes rémunérations à leurs administrateurs afin (1) d’attirer de nouvelles recrues hautement qualifiées (2) de s’assurer que les intérêts des administrateurs sont en adéquation avec les intérêts des parties prenantes, et (3) d’être en mesure de s’attendre à une solide performance de leur part et de divulguer les rémunérations globales.

Le document du ICNG propose une réflexion dans trois domaines : (1) la structure de rémunération (2) la reddition de comptes, et (3) les principes de transparence.

On me demande souvent qui doit statuer sur la politique de rémunération des administrateurs, puisqu’il semble que ceux-ci déterminent leurs propres compensations !

Ultimement, ce sont les actionnaires qui doivent approuver les rémunérations des administrateurs telles que présentées dans la circulaire de procuration. Cependant, le travail en aval se fait, annuellement, par le comité de gouvernance lequel recommande au conseil une structure de rémunération des administrateurs non exécutifs. Notons que les comités de gouvernance ont souvent recours à des firmes spécialisées en rémunération pour les aider dans leurs décisions.

C’est cette recommandation qui devrait être amenée à l’assemblée générale annuelle pour approbation, même si dans plusieurs pays, la juridiction ne le requiert pas.

En tant qu’administrateur, si vous souhaitez connaître le point de vue du plus grand réseau de gouvernance à l’échelle internationale, je vous invite à lire ce document synthétique.

Bonne lecture. Vos commentaires sur le sujet sont sollicités.

 

ICGN Guidance on Non-executive Director Remuneration – 2016

 

 

 

Adapter le modèle de gouvernance à la réalité des OBNL de petite taille | en rappel


Il est vrai que la réalité des organisations à but non lucratif (OBNL) est souvent assez éloignée des grands principes de gouvernance généralement reconnus.

Les différences principales portent essentiellement sur l’application rigoureuse de certains principes de gouvernance lorsque l’entreprise est à ses débuts ou en transition.

La distinction nette entre les activités des administrateurs et l’embryon de direction peut alors prendre une forme différente. Il est évident que pour les entreprises en démarrage, le rôle des administrateurs peut comprendre des tâches qui relèveraient normalement de la direction générale de l’entreprise.

Cependant, les administrateurs doivent toujours saisir qu’ils ont d’abord et avant tout un rôle de fiduciaire, ce qui rend leurs prestations d’autant plus délicates ! La gestion de conflits d’intérêts potentiels est à prévoir dans ces cas. Le président du conseil doit être très vigilant à cet égard.

Les administrateurs doivent accepter l’idée que l’organisation ne puisse survivre sans leur apport concret, en attendant la constitution d’une véritable structure de management avec l’embauche d’un directeur général ou d’une directrice générale.

Voici le témoignage de Sandra Dunham* qui a une longue expérience dans la direction des OBNL et qui a été invitée à contribuer au blogue de Imagine Canada.

Bonne lecture ! Ce billet est-il pertinent ? Avez-vous des interrogations ? Vos commentaires sont les bienvenus.

 

Modèles de gouvernance du CA : oser la différence !

 

 

Résultats de recherche d'images pour « obnl imagine canada »

 

Résultats de recherche d'images pour « OBNL »

 

 

Lorsque j’ai débuté dans mon tout premier poste de directrice générale à la fin des années 1990, tout le monde parlait du modèle de gouvernance de Carver. À l’époque, j’ignorais tout de l’existence même d’un « modèle de gouvernance ». Les adeptes de cette théorie l’étudiaient soigneusement, élaboraient des politiques et renseignaient leurs collègues-administrateurs à son sujet. Le modèle Carver était alors considéré comme le nec plus ultra des modèles de gouvernance.

Dans l’organisation à laquelle je me joignais alors, le directeur général sortant avait participé à une formation à ce sujet et avait suggéré aux administrateurs des façons de faire pour devenir un conseil d’administration (CA) conforme au modèle Carver. À mon arrivée, les membres avaient créé une multitude de règlements superflus à propos du fonctionnement du CA, soit en raison des informations relayées par l’ancien directeur général, soit en raison de l’interprétation qu’eux-mêmes en avaient faite ou en raison de l’expertise des nouveaux administrateurs.

Encore aujourd’hui, j’entends certains administrateurs décrire leur CA comme un « CA selon Carver », mais il est devenu beaucoup plus courant de parler d’un modèle de gouvernance par politiques. Malgré la multiplication des formations en gouvernance, les administrateurs ignorent souvent à quel type de CA s’identifier, et s’ils le savent, ils ne réussissent pas toujours à agir en fonction des caractéristiques du modèle choisi.

J’estime qu’il est grand temps pour les CA d’arrêter de vouloir travailler relativement à certaines catégories qui ne correspondent pas à leur réalité et de s’excuser de leur mode de fonctionnement. Ils devraient plutôt se concentrer sur les priorités qui s’imposent compte tenu de leur étape de développement et définir clairement leur rôle dans l’organisation.

 

Politiques, opérations et entre-deux

 

Presque tous les CA remplissent d’abord une fonction opérationnelle. Puisque très peu d’organismes comptent des employés dès le jour un de leur existence, les administrateurs doivent assurer le fonctionnement de l’organisation jusqu’à ce qu’un employé rémunéré ou un nombre suffisant de bénévoles se joignent à l’équipe et libèrent les administrateurs de cette tâche. Or, de nombreux CA continuent à assumer certaines tâches opérationnelles même après l’arrivée de personnel et laissent à ces derniers le soin de mettre en œuvre les programmes offerts par l’organisme.

Puis, généralement, au fur et à mesure qu’une organisation grandit et embauche une personne responsable de la gestion quotidienne des activités, les administrateurs prennent leurs distances avec ces aspects de l’organisation (comptabilité, ressources humaines, relations avec les donateurs, etc.) et commencent à se concentrer sur la définition d’orientations stratégiques, l’élaboration de politiques de gouvernance et l’embauche et l’encadrement de la personne la plus haut placée dans l’organisation, soit le directeur général ou la directrice générale. Idéalement, le CA se serait alors déjà doté de politiques qui clarifient les relations entre lui-même et cette personne à la tête de l’organisation.

Cependant, la transition entre ces deux catégories n’est pas un processus linéaire, parfait ou permanent, et il existe autant de bonnes que de mauvaises raisons incitant un CA à tergiverser entre le modèle opérationnel et le modèle par politiques. Voici quelques situations exemplaires :

Pendant les phases de transition, de croissance significative, de changement de mandat ou de menace importante pour l’organisation, un CA qui fonctionne selon le modèle de gouvernance par politiques peut être appelé à participer aux activités opérationnelles de l’organisation.

Certains administrateurs ne reconnaissent pas la valeur de la gouvernance par politiques et ne peuvent s’empêcher de s’ingérer dans les détails des activités opérationnelles.

Si un ou plusieurs administrateurs sont en conflit personnel avec la personne directrice générale, ils pourraient essayer de s’immiscer dans les activités opérationnelles dans une tentative de recueillir des arguments pour une destitution de cette personne.

Lorsque la personne à la tête de la direction générale ne fournit pas assez d’information aux administrateurs pour leur permettre de remplir leurs obligations fiduciaires, ces derniers peuvent décider de participer davantage aux activités opérationnelles pour s’assurer que l’organisation a les reins solides.

Si le CA a réalisé son mandat stratégique et n’est pas en mesure d’amorcer une réflexion visionnaire pour créer une nouvelle stratégie à long terme, ses membres pourraient, par défaut, se tourner vers l’aspect opérationnel du travail afin de s’assurer de leur propre pertinence.

 

Comment trouver le meilleur modèle pour son CA ?

 

Dans un monde idéal, les administrateurs et la personne à la tête de la direction générale recevraient une formation exhaustive en matière de gouvernance, adopteraient et respecteraient des politiques de gouvernance adéquates et réaliseraient une autoévaluation sur une base régulière afin de s’assurer que l’organisation continue de fonctionner conformément au modèle de gouvernance retenu. En réalité, la plupart des administrateurs, voire des directeurs généraux, apprennent la gouvernance « sur le tas ». Ils se fient souvent aux informations relayées par des administrateurs ayant siégé à d’autres CA, sans l’assurance que cette information est juste.

Les organisations dont les ressources leur permettent de se prévaloir d’une formation en gouvernance adaptée à leur contexte et leurs besoins devraient en profiter. Cette formation devrait d’abord reconnaître que le modèle de gouvernance par politiques n’est pas approprié pour tous les organismes sans but lucratif et qu’il existe des modèles hybrides, alliant gouvernance opérationnelle et gouvernance par politiques, qui se prêtent davantage à certaines organisations, surtout les petites.

Pour déterminer son rôle le plus approprié dans le contexte de l’organisation, un CA peut également réviser différentes normes de certification en matière de gouvernance, une méthode très efficace et qui demande peu de ressources. Ainsi, le programme de normes d’Imagine Canada est articulé autour des règles de gouvernance les plus importantes, en plus de présenter des normes différentes et adaptées pour les petites organisations.

 

Mon CA joue un grand rôle opérationnel, et alors ?

 

Je propose que les CA de petites organisations cessent de s’excuser pour la participation de leurs administrateurs aux activités opérationnelles, car il serait totalement illogique pour une organisation avec un budget de moins de 100 000 $ de suivre le même modèle de gouvernance qu’un hôpital ou une université. Or, souvent, on évalue ces petites organisations en fonction des mêmes critères applicables aux grandes.

Les administrateurs devraient utiliser les normes définies par un programme de certification pertinent pour la taille de leur organisation comme point de référence et de comparaison. S’ils peinent à respecter ces normes, ils peuvent demander de l’aide pour ajuster leur modèle de gouvernance. Si, par contre, ils respectent toutes les normes et si leur organisation fonctionne de manière efficace et réalise ses priorités stratégiques, ils ont toutes les raisons de se montrer fiers de leur travail, de reconnaître leur propre compétence à gérer une organisation en fonction de sa taille et de mettre en lumière tout le travail que les petites organisations réussissent à faire avec peu de moyens.


À propos de l’auteure

Sandra Dunham a à son actif plus de 30 ans d’expérience dans le secteur de la bienfaisance et sans but lucratif ainsi qu’une maîtrise en administration publique de l’Université Dalhousie obtenue alors qu’elle poursuivait une carrière déjà bien entamée. Sandra est la propriétaire unique de Streamline New Perspective Solutions, une boîte de consultation spécialisée en gestion et collecte de fonds dans le secteur caritatif. Nos auteurs invités s’expriment à titre personnel. Leurs opinions ne reflètent pas nécessairement celles d’Imagine Canada.