Le délicat problème de la rétribution des dirigeants d’OBNL ! | En rappel

L’expérience de la gestion des OBNL nous apprend que les entrepreneurs-propriétaires-fondateurs de ces organisations vivent souvent des aventures d’affaires formidables parce qu’ils sont animés par un feu sacré et une passion hors du commun. C’est souvent ce qui fait que certaines entreprises de l’économie sociale sortent de l’ombre !

Ainsi, suite à la mise sur pied de l’organisme à but non lucratif, les premiers dirigeants doivent s’impliquer activement dans la gestion quotidienne de l’entreprise; ils investissent beaucoup de temps – bénévolement – tout en occupant aussi un autre emploi.

Après plusieurs années de dévouement, de développement d’affaires tangible, de notoriété accrue et de succès répétés, souvent après des décennies d’efforts…, les gestionnaires bénévoles deviennent surchargés. L’entreprise doit se professionnaliser…

Toutes les organisations vivent ces grandes mutations, souvent déchirantes mais indispensables pour assurer la pérennité de l’entreprise.

Les leaders bénévoles doivent alors s’entourer de ressources additionnelles : administration générale, opérations, ventes, finances et comptabilité, recherche de commandites et de subventions, communications publiques, etc.

Ces nouvelles ressources, bien qu’ayant l’entreprise à cœur, ne sont pas animés de la même passion; en conséquence, l’organisation doit les rémunérer. Cela crée souvent deux classes : les responsables bénévoles (lesquels se retrouvent généralement au CA) et le personnel rémunéré.

Selon moi, le CA doit prévoir des mécanismes de transition clairs afin que les fondateurs-gestionnaires soient traités avec équité et reconnaissance.

When it comes to attracting and retaining talented leaders, the setting of executive compensation packages has posed continuing challenges to nonprofits since the 1980s. These challenges relate to the professionalization of the sector, the increasing desire to measure and reward success, and the need to retain and promote the most talented managers.

Voici un cas qui illustre pourquoi un CA doit se montrer très clairvoyant dans l’expression de sa gratitude envers les fondateurs bénévoles. Il ne doit pas attendre que les premiers dirigeants s’essoufflent, puis se retirent, pour leur exprimer sa satisfaction sous la forme d’une rétribution financière. On notera qu’il s’agit ici d’une OBNL d’envergure et que le PDG recevait déjà une rémunération significative.

Ce cas, rédigé par Ruth McCambridge et publié dans Nonprofit Quaterly, montre que le conseil d’administration d’une l’OBNL doit éviter de s’embourber dans des questions de rémunération du PDG, surtout lorsque l’organisme est tributaire de fonds publics pour son financement.

Nonprofit Boards Can and Should Avoid this Problem with CEO Compensation

This story is not new. A CEO spends decades providing measurably great leadership for a nonprofit, but no one ever considers ensuring that she is able to retire at the end of all that. So the board plays a little catch-up and makes a lump sum payment, causing a media storm in which scrutiny is focused unkindly on the organization.

So it was with the now-retired CEO of Health Care and Rehabilitation Services. Judith Hayward had been at the organization for 19 years and had built its budget from $8 million to $50 million annually. She was given a $650,000 compensation package when she retired around a year ago. Approximately 85 percent of the organization’s budget comes from taxpayer money.

Even though these kinds of payments may not be illegal and may even be ethical, when they come to light, they almost invariably cause problems for nonprofits—especially those that receive public contracts.

In this case, the board crossed its t’s and dotted its i’s. The executive and finance committees made recommendations and the board approved the payment in 2010. But when the payment was highlighted during a recent audit, the current CEO, George Karabakakis, felt compelled to travel to Montpelier to meet with local legislators to explain.

“It felt to myself, to the board, and to the senior leadership team that it was really important to come out and share the information,” Karabakakis said. “I don’t want legislators, or our staff, or anyone to get half truths or hear about this through the grapevine or the rumor mill. It’s important to put it out clearly and say ‘This is what happened.’”

Hayward’s annual salary when she retired was about $163,000. “Everyone on the board thought she did a tremendous job,” said J. Allen Dougherty, who served as chair of the HCRS board when the retirement package was approved. “She brought the organization out of bankruptcy, developed new programs and everyone who had contact with her, including people from the state, thought she did a magnificent job. She never had a retirement package and the board thought this was a way we could make it up to her.”

The package was originally approved at $450,000, but that was increased to $650,000 in 2013 when it was discovered that Hayward would be immediately taxed for $200,000 once she started to receive the payments.

Unfortunately, this year, for the first time in at least 10 years, HCRS employees did not get a raise, and Karabakakis said staff have been “disappointed, angry and outraged.”

“Some people may see it as excessive,” he said. “If we’re going to provide a deferred compensation package, it’s important that we look at the industry standard, and make sure that we do have a culture of openness and transparency.”

But the staff were unlikely to have been solely concerned about transparency. The other thing a board needs to ensure is that fair retirement benefits extend to all workers. The notion of caring only about the old age comfort of top employees is, naturally, abhorrent and insulting to many others. It’s no surprise, and in times where income inequality begs for our attention, our organizations should try not to mimic the bad policies of the larger economy.

Karabakakis said the whole incident has caused a review of employment policies, the establishment of a personnel committee, and a “commitment to open and transparent communication with all concerned.”

But all of that after-the-fact work is being done after the horse has left the barn. As reported here, Rep. Michael Mrowicki, who serves on the Human Services Committee, says he will bring up the possible oversight of executive compensation in the legislature. “These payments seem to have been structured in a way that they are legal, but they don’t really pass the smell test,” he said. “We are trying to figure out our next step.”

“Mainly we want to make sure this doesn’t happen again,” he said. “We wouldn’t want to set a precedent for other people to think they deserve more than they have been paid. The staff at these agencies work incredibly hard, and you don’t have to go very far to find people who are being denied services because they are told there is not enough money. These state agencies are entrusted with public money and the taxpayers deserve to be protected. It is frustrating and disappointing on a very basic level.”

The fact is that many nonprofits do not attend to retirement packages adequately until doing what feels fair on one level may look unreasonable to others. With as many baby boomers as there are in leadership at nonprofits, it is well past time to consider these issues.

Gouvernance des OBNL : Un webinaire gratuit à ne pas manquer !

Voici une occasion à ne pas manquer si la gouvernance des OBNL vous intéresse.

Il s’agit d’un webinaire offert gracieusement par les CPA le 12 mars 2015.

Vous n’avez qu’à vous inscrire en consultant le site ci-dessous.

Bon webinaire !

Gouvernance des organismes sans but lucratif : Questions que les administrateurs devraient poser

Êtes-vous administrateur d’un OSBL? Comprenez-vous bien votre rôle à l’égard de la surveillance de l’organisme sans but lucratif (OSBL) que vous servez? Quelles questions devriez-vous poser pour vous assurer que le cadre de gouvernance et les processus de soutien de votre OSBL sont efficaces et répondent aux besoins particuliers de l’organisme, de sorte que l’OSBL soit productif, respecte ses obligations en matière d’information et réalise sa mission?

Cette activité gratuite d’une durée de 90 minutes aidera les administrateurs d’OSBL à comprendre comment ils peuvent s’assurer qu’un bon cadre de gouvernance est en place au sein de l’organisme qu’ils servent.

VOUS EN SAUREZ PLUS SUR :

les obligations fiduciaires liées à la surveillance pour les conseils et les administrateurs pris individuellement

les exigences et le contexte législatifs

la conception et la mise en place d’un cadre de gouvernance

l’établissement d’une saine dynamique au sein du conseil

les ressources pour l’établissement d’une saine dynamique au sein du conseil

le suivi, l’apprentissage et l’amélioration sur une base continue

les modèles de gouvernance dans le secteur des OSBL

des exemples de mandats de comités du conseil

L’évolution de la gouvernance en 2015 et dans le futur | En rappel

Aujourd’hui, je vous réfère à un formidable compte rendu de l’évolution de la gouvernance aux États-Unis en 2015.

C’est certainement le document le plus exhaustif que je connaisse eu égard au futur de la gouvernance corporative. Cet article rédigé par Holly J. Gregory* associée et responsable de la gouvernance corporative et de la rémunération des dirigeants de la firme Sidley Austin LLP, a été publié sur le forum de la Harvard Law School (HLS).

L’article est assez long mais les spécialistes de toutes les questions de gouvernance y trouveront leur compte car c’est un document phare. On y traite des sujets suivants:

1. L’impact des règlementations sur le rôle de la gouvernance;

2. Les tensions entre l’atteinte de résultats à court terme et les investissements à long terme;

3. L’impact de l’activisme sur le comportement des CA et sur la création de valeur;

4. Les réactions de protection et de défense des CA, notamment en modifiant les règlements de l’entreprise;

5. L’influence et le pouvoir des firmes spécialisées en votation;

6. La démarcation entre la supervision (oversight) de la direction et le management;

7. Les activités de règlementation, d’implantation et de suivi;

8. Le rétablissement de la confiance du public envers les entreprises.

Je vous invite donc à lire cet article dont voici un extrait de la première partie.

Bonne lecture ! Vos commentaires sont les bienvenus.

The State of Corporate Governance for 2015

The balance of power between shareholders and boards of directors is central to the U.S. public corporation’s success as an engine of economic growth, job creation and innovation. Yet that balance is under significant and increasing strain. In 2015, we expect to see continued growth in shareholder activism and engagement, as well as in the influence of shareholder initiatives, including advisory proposals and votes. Time will tell whether, over the long term, tipping the balance to greater shareholder influence will prove beneficial for corporations, their shareholders and our economy at large. In the near term, there is reason to question whether increased shareholder influence on matters that the law has traditionally apportioned to the board is at the expense of other values that are key to the sustainability of healthy corporations.

…..

Governance Roles and Responsibilities

Over the past 15 years, two distinct theories have been advanced to explain corporate governance failures: too little active and objective board involvement and too little accountability to shareholders. The former finds expression in the Sarbanes-Oxley Act’s emphasis on improving board attention to financial reporting and compliance, and related Securities and Exchange Commission (“SEC”) and listing rules on independent audit committees and director and committee independence and function generally. The latter is expressed by the Dodd-Frank Act’s focus on providing greater influence to shareholders through advisory say on pay votes and access to the company’s proxy machinery for nomination by shareholders of director candidates.

The emerging question is whether federal law and regulation (and related influences) are altering the balance that state law provides between the role of shareholders and the role of the board, and if so, whether that alteration is beneficial or harmful. State law places the management and direction of the corporation firmly in the hands of the board of directors. This legal empowerment of the board—and implicit rejection of governance by shareholder referendum—goes hand in hand with the limited liability that shareholders enjoy. Under state law, directors may not delegate or defer to shareholders as to matters reserved by law for the board, even where a majority of shareholders express a clear preference for a specific outcome. Concern about appropriate balance in shareholder and board roles is implicated by the increasingly coercive nature—given the influence and policies of proxy advisory firms—of federally-mandated advisory say on pay proposals and advisory shareholder proposals submitted under Securities Exchange Act Rule 14a-8 on other matters that do not fall within shareholder decision rights. The extent of proxy advisory firm influence is linked, at least in part, to the manner in which the SEC regulates registered investment advisors.

Short-Term Returns vs. Long-Term Investment

Management has long reported significant pressures to focus on short-term results at the expense of the long-term investment needed to position the corporation for the long term. Observers point to short-term financial market pressures which have increased with the rise of institutional investors whose investment managers have incentives to focus on quarterly performance in relation to benchmark and competing funds.

Short-term pressures may also be accentuated by the increasing reliance on stock-based executive compensation. It is estimated that the percentage of stock-based compensation has tripled since the early nineties: in 1993, approximately 20 percent of executive compensation was stock-based. Today, it is about 60 percent.

Boards that should be positioned to help management take the long-term view and balance competing interests are also under pressure from financial and governance focused shareholder activism. Both forms of activism are supported by proxy advisors that favor some degree of change in board composition and tend to have fairly defined—some would say rigid—views of governance practices.

Shareholder Activism and Its Value

As fiduciaries acting in the best interests of the company and its shareholders, directors must make independent and objective judgments. While it is prudent for boards to understand and consider the range of shareholder concerns and views represented in the shareholder constituency, shareholder engagement has its limits: The board must make its own independent judgment and may not simply defer to the wishes of shareholders. While activist shareholders often bring a valuable perspective, they may press for changes to suit particular special interests or short-term goals that may not be in the company’s long-term interests.

Governance Activism

Shareholder pressure for greater rights and influence through advisory shareholder proposals are expected to continue in the 2015 proxy season. A study of trends from the 2014 proxy season in Fortune 250 companies by James R. Copland and Margaret M. O’Keefe, Proxy Monitor 2014: A Report on Corporate Governance and Shareholder Activism (available at www.proxymonitor.org), suggests that the focus of most shareholder proposal activity does not relate to concerns that are broadly held by the majority of shareholders:

Shareholder support for shareholder proposals is down, with only four percent garnering majority support, down from seven percent in 2013.

A small group of shareholders dominates the shareholder-proposal process. One-third of all shareholder proposals are sponsored by three persons and members of their families and another 28 percent of proposals are sponsored by investors with an avowed social, religious or public-policy focus.

Forty-eight percent of 2014 proposals at Fortune 250 companies related to social or political concerns. However, only one out of these 136 proposals received majority support, and that solitary passing proposal was one that the board had supported.

Institutional Shareholders Services Inc. (“ISS”) is far more likely to recommend in favor of shareholder proposals than the average investor is to support them.

Nonetheless, the universe of shareholder proposals included in corporate proxy statements pursuant to Rule 14a-8 has grown significantly over the years. In addition, the coercive power of advisory shareholder proposals has expanded as a result of the policy of proxy advisors to recommend that their clients vote against the re-election of directors who fail to implement advisory shareholder proposals that receive a majority of votes cast. Directors should carefully assess the reasons underlying shareholder efforts to use advisory proposals to influence the company’s strategic direction or otherwise change the board’s approach to matters such as CEO compensation and succession, risk management, governance structures and environmental and social issues. Shareholder viewpoints provide an important data set, but must be understood in the context of the corporation’s best interest rather than the single lens of one particular constituency.

….

__________________________________

*Holly J. Gregory is a partner and co-global coordinator of the Corporate Governance and Executive Compensation group at Sidley Austin LLP.

Le délicat problème de la rétribution des dirigeants d’OBNL !

Toutes les organisations vivent ces grandes mutations, souvent déchirantes mais indispensables pour assurer la pérennité de l’entreprise.

Selon moi, le CA doit prévoir des mécanismes de transition clairs afin que les fondateurs-gestionnaires soient traités avec équité et reconnaissance.

When it comes to attracting and retaining talented leaders, the setting of executive compensation packages has posed continuing challenges to nonprofits since the 1980s. These challenges relate to the professionalization of the sector, the increasing desire to measure and reward success, and the need to retain and promote the most talented managers.

Nonprofit Boards Can and Should Avoid this Problem with CEO Compensation

This story is not new. A CEO spends decades providing measurably great leadership for a nonprofit, but no one ever considers ensuring that she is able to retire at the end of all that. So the board plays a little catch-up and makes a lump sum payment, causing a media storm in which scrutiny is focused unkindly on the organization.

So it was with the now-retired CEO of Health Care and Rehabilitation Services. Judith Hayward had been at the organization for 19 years and had built its budget from $8 million to $50 million annually. She was given a $650,000 compensation package when she retired around a year ago. Approximately 85 percent of the organization’s budget comes from taxpayer money.

Even though these kinds of payments may not be illegal and may even be ethical, when they come to light, they almost invariably cause problems for nonprofits—especially those that receive public contracts.

In this case, the board crossed its t’s and dotted its i’s. The executive and finance committees made recommendations and the board approved the payment in 2010. But when the payment was highlighted during a recent audit, the current CEO, George Karabakakis, felt compelled to travel to Montpelier to meet with local legislators to explain.

“It felt to myself, to the board, and to the senior leadership team that it was really important to come out and share the information,” Karabakakis said. “I don’t want legislators, or our staff, or anyone to get half truths or hear about this through the grapevine or the rumor mill. It’s important to put it out clearly and say ‘This is what happened.’”

Hayward’s annual salary when she retired was about $163,000. “Everyone on the board thought she did a tremendous job,” said J. Allen Dougherty, who served as chair of the HCRS board when the retirement package was approved. “She brought the organization out of bankruptcy, developed new programs and everyone who had contact with her, including people from the state, thought she did a magnificent job. She never had a retirement package and the board thought this was a way we could make it up to her.”

The package was originally approved at $450,000, but that was increased to $650,000 in 2013 when it was discovered that Hayward would be immediately taxed for $200,000 once she started to receive the payments.

Unfortunately, this year, for the first time in at least 10 years, HCRS employees did not get a raise, and Karabakakis said staff have been “disappointed, angry and outraged.”

“Some people may see it as excessive,” he said. “If we’re going to provide a deferred compensation package, it’s important that we look at the industry standard, and make sure that we do have a culture of openness and transparency.”

But the staff were unlikely to have been solely concerned about transparency. The other thing a board needs to ensure is that fair retirement benefits extend to all workers. The notion of caring only about the old age comfort of top employees is, naturally, abhorrent and insulting to many others. It’s no surprise, and in times where income inequality begs for our attention, our organizations should try not to mimic the bad policies of the larger economy.

Karabakakis said the whole incident has caused a review of employment policies, the establishment of a personnel committee, and a “commitment to open and transparent communication with all concerned.”

But all of that after-the-fact work is being done after the horse has left the barn. As reported here, Rep. Michael Mrowicki, who serves on the Human Services Committee, says he will bring up the possible oversight of executive compensation in the legislature. “These payments seem to have been structured in a way that they are legal, but they don’t really pass the smell test,” he said. “We are trying to figure out our next step.”

“Mainly we want to make sure this doesn’t happen again,” he said. “We wouldn’t want to set a precedent for other people to think they deserve more than they have been paid. The staff at these agencies work incredibly hard, and you don’t have to go very far to find people who are being denied services because they are told there is not enough money. These state agencies are entrusted with public money and the taxpayers deserve to be protected. It is frustrating and disappointing on a very basic level.”

The fact is that many nonprofits do not attend to retirement packages adequately until doing what feels fair on one level may look unreasonable to others. With as many baby boomers as there are in leadership at nonprofits, it is well past time to consider these issues.

Les avantages liés à la constitution d’un comité consultatif pour les PME et les OBNL

Voici une vidéo de la Banque de Développement du Canada (BDC) vantant les mérites d’un comité consultatif dans le cas d’une petite entreprise. Les propriétaires affirment que la mise en place d’un comité consultatif est « l’un des secrets les mieux gardés pour améliorer une entreprise ».

Il ne fait aucun doute que les petites entreprises privées ou les OBNL ont de multiples avantages à former un conseil consultatif, avant de se lancer dans la mise en place d’un conseil d’administration. Le cas de l’entreprise Steelworks Design illustre bien les bénéfices à retirer d’un tel arrangement de gouvernance.

Cependant, il faut se concentrer sur une solide composition de ce conseil, et c’est là que réside tout le défi !

6 avantages d’un comité consultatif

Découvrez pourquoi former un comité consultatif est l’un des secrets les mieux gardés pour améliorer une entreprise. Rhonda Barnet, vice-présidente de Steelworks Design, explique ici comment les conseils externes ainsi que les encouragements de son comité consultatif ont permis à l’entreprise de surmonter les difficultés et de connaître de nouveaux succès.

Si vous voulez consulter un autre article qui résume parfaitement les principaux avantages reliés à l’utilisation d’un comité consultatif (aviseur), je vous invite à lire ce court article d’Olivier Dellacherie paru dans Talent4Boards Inc.

The pros and cons of an Advisory Board

Strategy, Innovation

Boost and foster CEO’s strategic capacity,

Analyze market conditions,

Are sources of ideas or trends,

Recommend technological innovation,

Suggest product or service changes.

Source of advice

Bring a wide range of experiences and perspectives to the company,

Empower CEO/founder to make smarter and more effective business decisions.

Independence

Provide a set of “fresh eyes” for the organization.

Give independent and honest advice.

Will be on the side of CEOs.

Assistance, business development

Help CEOs grow their company,

Help with business deals,

Bring new business and revenue opportunities,

Can pro-actively assist CEOs for certain tasks, in order they can devote most of his/her time to the business development.

Support entrepreneur so they don’t navigate unfamiliar waters alone.

Cost effective

Provide a talent pool that they could not normally afford.

Be an inexpensive alternative to a formal BOD.

Efficient

No fiduciary responsibility.

Structure problem solving

Create an organized process to discuss business opportunities and concerns.

Value creation

Branding the Company thanks to having recognizable names on board,

Be an important asset in the valuation of the company.

Networking

Broaden networks and encompass business vision

Mentoring

Bring opportunity for mentoring relationships

Mentoring thanks to the combined experience,

Share difficult issues.

Gouvernance des OBNL : Un webinaire gratuit à ne pas manquer!

Voici une occasion à ne pas manquer si la gouvernance des OBNL vous intéresse.

Il s’agit d’un webinaire offert gracieusement par les CPA le 12 mars 2015.

Vous n’avez qu’à vous inscrire en consultant le site ci-dessous.

Bon webinaire !

Gouvernance des organismes sans but lucratif : Questions que les administrateurs devraient poser

Êtes-vous administrateur d’un OSBL? Comprenez-vous bien votre rôle à l’égard de la surveillance de l’organisme sans but lucratif (OSBL) que vous servez? Quelles questions devriez-vous poser pour vous assurer que le cadre de gouvernance et les processus de soutien de votre OSBL sont efficaces et répondent aux besoins particuliers de l’organisme, de sorte que l’OSBL soit productif, respecte ses obligations en matière d’information et réalise sa mission?

Cette activité gratuite d’une durée de 90 minutes aidera les administrateurs d’OSBL à comprendre comment ils peuvent s’assurer qu’un bon cadre de gouvernance est en place au sein de l’organisme qu’ils servent.

VOUS EN SAUREZ PLUS SUR :

les obligations fiduciaires liées à la surveillance pour les conseils et les administrateurs pris individuellement

les exigences et le contexte législatifs

la conception et la mise en place d’un cadre de gouvernance

l’établissement d’une saine dynamique au sein du conseil

les ressources pour l’établissement d’une saine dynamique au sein du conseil

le suivi, l’apprentissage et l’amélioration sur une base continue

les modèles de gouvernance dans le secteur des OSBL

des exemples de mandats de comités du conseil

Le gouvernement résistera-t-il à la tentation partisane de la nomination d’un nouveau PDG à Hydro-Québec ?

Voici un article de Michel Nadeau, ex vice-président de la Caisse de dépôt et placement et directeur général de l’Institut sur la gouvernance (IGOPP), paru dans le Devoir récemment.

L’auteur se questionne, tout comme moi d’ailleurs, sur le processus d’embauche du PDG d’Hydro-Québec et sur la tentation, très réelle, de procéder à une nomination partisane !

Le point de vue de M. Nadeau est tout à fait pertinent eu égard à gouvernance des sociétés d’État.

Ci-dessous, un extrait de l’article.

Bonne lecture. À suivre !

Règles de gouvernance à Hydro-Québec | Nomination du nouveau PDG

Photo: Hydro-Québec

Il était rafraîchissant d’entendre le ministre de l’Énergie et des Ressources naturelles, M. Pierre Arcand, terminer mercredi matin une entrevue chez Marie-France Bazzo en déclarant : « Je vais laisser le conseil d’administration faire le travail et c’est à lui de faire des recommandations quant au successeur de M. Vandal. » Photo: Hydro-Québec

La tentation est toujours très forte dans les cabinets politiques à Québec de passer outre les normes de bonne gouvernance et de sortir un p.-d.g. d’un chapeau partisan. Tout individu a droit à ses convictions politiques, mais l’essentiel est qu’il remplisse les critères de compétence et de crédibilité selon le mandat. À ce chapitre, le premier ministre, M. Philippe Couillard, n’a pas fait vivre un grand moment de gouvernance au Québec en confiant récemment la présidence du conseil d’administration et du comité de gouvernance d’Hydro-Québec à une personne qui n’a aucune expérience dans la gestion du CA d’une grande organisation. Cela étant dit, il faut maintenant faire confiance à M. Michael Penner.

Comme l’indique l’article 11.6 de sa Loi, le conseil d’administration a déjà établi le profil de compétence et d’expérience du candidat recherché….

…

Le ministre l’a dit : ce n’est pas un choix politique. Le comité des ressources humaines devra trouver le meilleur candidat en interne ou à l’externe sans se gêner pour regarder à l’international. Le CA, qui compte une bonne moitié de gens expérimentés, peut relever ce défi. Les administrateurs pourraient se précipiter sur le bottin de l’Ordre des ingénieurs en cherchant un dirigeant intègre et honnête. Malgré le flou accusateur des audiences de la commission Charbonneau, ce profil peut encore se trouver. Mais rappelons-nous que le marché de l’énergie a beaucoup changé et que l’époque de la construction de grands barrages dans les milliards de dollars et les régions lointaines est, pour le moment, chose du passé. Au cours des prochaines années, la priorité sera davantage la gestion serrée des actifs actuels de 73 milliards et un contrôle rigoureux de l’utilisation des revenus de 13 milliards. Les usagers veulent des gestionnaires intelligents… Pas juste des compteurs !

Cette nomination sera un indicateur du sérieux de ce gouvernement dans la gouvernance et la gestion du plus important outil de développement économique et industriel du Québec.

L’évolution de la gouvernance en 2015 et dans le futur

Aujourd’hui, je vous réfère à un formidable compte rendu de l’évolution de la gouvernance aux États-Unis en 2015.

L’article est assez long mais les spécialistes de toutes les questions de gouvernance y trouveront leur compte car c’est un document phare. On y traite des sujets suivants:

1. L’impact des règlementations sur le rôle de la gouvernance;

2. Les tensions entre l’atteinte de résultats à court terme et les investissements à long terme;

3. L’impact de l’activisme sur le comportement des CA et sur la création de valeur;

4. Les réactions de protection et de défense des CA, notamment en modifiant les règlements de l’entreprise;

5. L’influence et le pouvoir des firmes spécialisées en votation;

6. La démarcation entre la supervision (oversight) de la direction et le management;

7. Les activités de règlementation, d’implantation et de suivi;

8. Le rétablissement de la confiance du public envers les entreprises.

Je vous invite donc à lire cet article dont voici un extrait de la première partie.

Bonne lecture ! Vos commentaires sont les bienvenus.

The State of Corporate Governance for 2015

The balance of power between shareholders and boards of directors is central to the U.S. public corporation’s success as an engine of economic growth, job creation and innovation. Yet that balance is under significant and increasing strain. In 2015, we expect to see continued growth in shareholder activism and engagement, as well as in the influence of shareholder initiatives, including advisory proposals and votes. Time will tell whether, over the long term, tipping the balance to greater shareholder influence will prove beneficial for corporations, their shareholders and our economy at large. In the near term, there is reason to question whether increased shareholder influence on matters that the law has traditionally apportioned to the board is at the expense of other values that are key to the sustainability of healthy corporations.

…..

Governance Roles and Responsibilities

Over the past 15 years, two distinct theories have been advanced to explain corporate governance failures: too little active and objective board involvement and too little accountability to shareholders. The former finds expression in the Sarbanes-Oxley Act’s emphasis on improving board attention to financial reporting and compliance, and related Securities and Exchange Commission (“SEC”) and listing rules on independent audit committees and director and committee independence and function generally. The latter is expressed by the Dodd-Frank Act’s focus on providing greater influence to shareholders through advisory say on pay votes and access to the company’s proxy machinery for nomination by shareholders of director candidates.

The emerging question is whether federal law and regulation (and related influences) are altering the balance that state law provides between the role of shareholders and the role of the board, and if so, whether that alteration is beneficial or harmful. State law places the management and direction of the corporation firmly in the hands of the board of directors. This legal empowerment of the board—and implicit rejection of governance by shareholder referendum—goes hand in hand with the limited liability that shareholders enjoy. Under state law, directors may not delegate or defer to shareholders as to matters reserved by law for the board, even where a majority of shareholders express a clear preference for a specific outcome. Concern about appropriate balance in shareholder and board roles is implicated by the increasingly coercive nature—given the influence and policies of proxy advisory firms—of federally-mandated advisory say on pay proposals and advisory shareholder proposals submitted under Securities Exchange Act Rule 14a-8 on other matters that do not fall within shareholder decision rights. The extent of proxy advisory firm influence is linked, at least in part, to the manner in which the SEC regulates registered investment advisors.

Short-Term Returns vs. Long-Term Investment

Management has long reported significant pressures to focus on short-term results at the expense of the long-term investment needed to position the corporation for the long term. Observers point to short-term financial market pressures which have increased with the rise of institutional investors whose investment managers have incentives to focus on quarterly performance in relation to benchmark and competing funds.

Short-term pressures may also be accentuated by the increasing reliance on stock-based executive compensation. It is estimated that the percentage of stock-based compensation has tripled since the early nineties: in 1993, approximately 20 percent of executive compensation was stock-based. Today, it is about 60 percent.

Boards that should be positioned to help management take the long-term view and balance competing interests are also under pressure from financial and governance focused shareholder activism. Both forms of activism are supported by proxy advisors that favor some degree of change in board composition and tend to have fairly defined—some would say rigid—views of governance practices.

Shareholder Activism and Its Value

As fiduciaries acting in the best interests of the company and its shareholders, directors must make independent and objective judgments. While it is prudent for boards to understand and consider the range of shareholder concerns and views represented in the shareholder constituency, shareholder engagement has its limits: The board must make its own independent judgment and may not simply defer to the wishes of shareholders. While activist shareholders often bring a valuable perspective, they may press for changes to suit particular special interests or short-term goals that may not be in the company’s long-term interests.

Governance Activism

Shareholder pressure for greater rights and influence through advisory shareholder proposals are expected to continue in the 2015 proxy season. A study of trends from the 2014 proxy season in Fortune 250 companies by James R. Copland and Margaret M. O’Keefe, Proxy Monitor 2014: A Report on Corporate Governance and Shareholder Activism (available at www.proxymonitor.org), suggests that the focus of most shareholder proposal activity does not relate to concerns that are broadly held by the majority of shareholders:

Shareholder support for shareholder proposals is down, with only four percent garnering majority support, down from seven percent in 2013.

A small group of shareholders dominates the shareholder-proposal process. One-third of all shareholder proposals are sponsored by three persons and members of their families and another 28 percent of proposals are sponsored by investors with an avowed social, religious or public-policy focus.

Forty-eight percent of 2014 proposals at Fortune 250 companies related to social or political concerns. However, only one out of these 136 proposals received majority support, and that solitary passing proposal was one that the board had supported.

Institutional Shareholders Services Inc. (“ISS”) is far more likely to recommend in favor of shareholder proposals than the average investor is to support them.

Nonetheless, the universe of shareholder proposals included in corporate proxy statements pursuant to Rule 14a-8 has grown significantly over the years. In addition, the coercive power of advisory shareholder proposals has expanded as a result of the policy of proxy advisors to recommend that their clients vote against the re-election of directors who fail to implement advisory shareholder proposals that receive a majority of votes cast. Directors should carefully assess the reasons underlying shareholder efforts to use advisory proposals to influence the company’s strategic direction or otherwise change the board’s approach to matters such as CEO compensation and succession, risk management, governance structures and environmental and social issues. Shareholder viewpoints provide an important data set, but must be understood in the context of the corporation’s best interest rather than the single lens of one particular constituency.

….

__________________________________

*Holly J. Gregory is a partner and co-global coordinator of the Corporate Governance and Executive Compensation group at Sidley Austin LLP.

Le cas du transfert de l’entreprise familiale Heineken

Aujourd’hui, je partage avec vous une belle histoire de succession d’une entreprise familiale mondialement connue : Heineken.

Ce cas d’entreprise m’a été proposé par Paul Michaud, un administrateur de sociétés certifié (ASC), une personne expérimentée dans les situations de transferts d’entreprises familiales.

Comme Paul le mentionne : « C’est un cas intéressant ! Le bonhomme est un hybride entre un entrepreneur et un CEO, la fille entre la mère-au-foyer et CEO ».

Je vous invite donc à lire ce cas de relève d’entreprise familiale publié par Patricia Sellers dans Fortune.

Vous trouverez, ci-dessous, quelques certaines conclusions tirées du cas. C’est une belle lecture du temps des Fêtes !

Heineken’s Charlene de Carvalho: A self-made heiress

For anyone who oversees a family business, passing it on to the next generation is the ultimate challenge of leadership. “If we get that wrong, we’ve wasted our energy on all that we’ve built,” says Michel de Carvalho, the investment banker husband of Charlene Heineken.

The de Carvalho family (from left): Alexander, Michel, Charlene, Louisa, Charles, Sophie, and Isabel

Heineken has a stock market value of $44 billion, and Charlene aims to pass on her 25% ownership stake and control of the voting shares more prudently than her father, Freddy Heineken, did to her. So she and Michel have been diligently studying the best practices of passing on a family business. No matter the size of a dynasty, certain basic rules apply.

CHOOSE ONE.

Other billionaire owners of family businesses have advised the de Carvalhos, regardless of how they divvy up the wealth, to select one of their five children to take control of the company. “But Charlene and I are not yet convinced that we could not have an odd number, perhaps three,” admits Michel, noting that ownership may be a lonely job for one heir. “Had Charlene not been married to someone who has a strong interest in the business, it would have been a terrible burden.”

TEST THE CHILDREN.

Don’t trap them,” says Byron Trott, a former Goldman Sachs banker whose merchant bank, BDT & Co., invests in and advises closely held companies. “Allow them to find their passion.” Trott admires the way the de Carvalhos are getting their five children to define their interests, whether philanthropic, arts-related, or corporate. Meanwhile, they’re preparing eldest son Alexander, who works in private equity, to inherit control of Heineken. “He’s on the board. He’s working in the financial industry,” notes Trott. “He understands the rigor of opting in.”

PICK STRONG ADVISERS.

Freddy Heineken stocked his board with yes men, which weakened the company before -Charlene inherited control in 2002. Charlene and Michel’s advice to Alexander or whoever among their children eventually takes control: “Surround yourself with the best possible people who are not yes men and sycophants. You want people who express doubt.”

HOLD ON.

Family control of a business protects management from “the short-term whims of Wall Street,” enabling it to focus on long-term growth, says Trott. “These companies tend to outperform the market over long periods of time.” Trott advises the de Carvalhos: “Keep doing what you’re doing, because you’re doing it very well.” —P.S.

Quelles sont les qualités managériales recherchées par les C.A. | Entrevue avec le PCD de Korn/Ferry

Voici un article qui met en exergue les qualités que les conseils d’administration veulent voir chez les futurs membres de la haute direction.

L’article, écrit par Lauren Weber dans les pages du The Wall Street Journal, relate un extrait de l’entrevue avec Gary Burnison, PCD de Korn/Ferry International, à propos de la recherche de talents en management à l’échelle internationale.

Le marché de la recherche des meilleurs talents de gestionnaires est en pleine expansion; il représente un marché d’environ 20 Milliards.

Toutes les grandes firmes font affaires avec des entreprises spécialisées dans la recherche des meilleurs talents, dans l’évaluation de ces derniers ainsi que dans leur rétention. De grandes firmes comme Korn/Ferry International possèdent des banques de données très à jour sur les carrières des hauts dirigeants ainsi que des outils de recherche à la fine pointe.

On est donc intéressé à connaître le point de vue du président et chef de la direction de la plus grande entreprise (1 Milliard par année) sur la croissance du marché et sur les qualités des candidatures recherchées.

On y apprend que les C.A. sont préoccupés par la plus grande diversité possible, par des candidats qui sont constamment en processus d’apprentissage, qui possèdent plusieurs réseaux d’affaires, qui savent bien s’entourer et qui ont fait leurs preuves dans des situations de gestion similaires. Le partenaire stratégique du PCD doit être le V-P Ressources humaines … et non le V-P Finance.

Je vous invite à lire l’extrait ci-dessous. Bonne lecture !

Korn/Ferry’s CEO: What Boards Want in Exécutives

WSJ: Your executive-search business was up in the first quarter by 9%. Are companies investing in growth, or are they mostly replacing people who leave?

Mr. Burnison: Industries like health care, technology and energy are going through massive change, and it’s going to continue for the foreseeable future. That creates a need for new positions, whether it’s about delivering health care remotely or finding new ways to tap people instantaneously through social media. Those needs didn’t exist a decade ago.

WSJ: Executive search seems like an old-fashioned, Rolodex business. Are LinkedIn and other social-networking tools going to make it obsolete?

Mr. Burnison: CEOs are in this mad fight for growth and relevancy, so they’re paying us not for finding people, but for finding out who people are. You can go lots of places to find people. But you’re going to want somebody to answer, “Okay, but what is this person really like? What do others really say about them?”

WSJ: How do you answer those questions?

Mr. Burnison: For the boardroom or the C-suite, the technical competencies are a starting point. What we’ve seen through our research is that the No. 1 predictor of executive success is learning agility. So we want to get a real line of sight into a person’s thinking style and leadership style. Right now, you’re seeing me how I want you to see me. What you really want to know is “How does Gary make decisions under pressure?”

WSJ: What is learning agility?

Mr. Burnison: It comes down to people’s willingness to grow, to learn, to have insatiable curiosity. Think about the levers of growth that a CEO has. You can consolidate, or tap [new markets], or innovate. When it comes down to the last two, particularly innovation, you want a workforce that is incredibly curious.

WSJ: What are companies getting wrong today about managing their employees?

Mr. Burnison: There’s this gap between what [executives] say and how they invest in people’s careers. They spend an enormous amount on development and performance management, but it’s not well spent.

WSJ: Where are they investing poorly in talent?

Mr. Burnison: They should be asking, how do you develop people in their careers? How do you extend the life of an employee? This is not an environment where you work for an organization for 20 years. But if you can extend it from three years to six years; that has enormous impact. [Turnover] is a huge hidden cost in a profit-and-loss statement that nobody ever focuses on. If there was a line item that showed that, I guarantee you’d have the attention of a CEO.

WSJ: Why aren’t CEOs focused on turnover?

Mr. Burnison: A CEO only has an average tenure today of five years. You have 20 quarters to show that you have a winning team. There is a trade-off between knowing in your heart that you’ve got to empower people, you’ve got to develop them. But then there’s the other side, that says, “Oh, my gosh. I’ve got to win this next game.”

WSJ: How should leaders look beyond the short-term horizon?

Mr. Burnison: The strategic partner to the CEO should be the CHRO [chief human-resources officer] in almost any organization. It shouldn’t be the CFO. The person that is responsible for people should be the biggest lever that a CEO can pull. Too often, it’s not.

WSJ: You’ve been CEO for seven years. Is the clock ticking?

Mr. Burnison: We’re all by definition “on the clock.” However, that ticking clock should never impede the journey. I am having a lot of fun and there is still an enormous amount of work to be done.

WSJ: You’re pushing to create more management products for companies. Why, and what are they?

Mr. Burnison: People are hard to scale. [Products are] very easy to scale. It’s going to be based on predictors of success. By culture, by industry, by function, around the world. It could be a program for how we assess and develop people. It could be licensing a piece of content around onboarding or hiring. Candidates could take an online assessment. You would get feedback and you could license our interviewing technology to say, “With this person, you may want to probe this area and this area when you’re interviewing them.”

WSJ: What do your search clients ask for most often?

Mr. Burnison: The No. 1 request we get in the search business is diversity. Diversity in thought. Diversity in backgrounds. Diversity, yes, in gender. Diversity yes, in race. Diversity, yes in terms of cultural upbringing. That’s got serious legs.

Facteurs qui conditionnent les relations entre un C.A. et sa direction, notamment son PCD

Vous trouverez, ci-dessous, un extrait d’un excellent article paru sur le site de Russell Reynolds Associates (www.russellreynolds.com), une firme spécialisée dans la recherche de cadres supérieurs à l’échelle internationale.

On a souvent abordé l’importance de la recherche de nouveaux administrateurs dans ces pages, mais ici nous attirons votre attention sur les facteurs qui conditionnent les relations entre le conseil et le PCD.

Les auteurs ont identifié 25 éléments essentiels sur lesquels se fondent une solide relation entre le CA et la haute direction. Ces facteurs ont été regroupés en quatre catégories de responsabilités :

1. Les responsabilités relationnelles du président du conseil d’administration (PCA);

2. Les responsabilités relationnelles du président et chef de la direction (PCD);

3. Les responsabilités relationnelles des administrateurs;

4. Les responsabilités relationnelles partagées.

Bonne lecture !

Essential Elements of an Effective CEO-Board Relationship

Essential Elements of an Effective CEO-Board Relationship builds on the ongoing work of our global CEO and Board Services practice in assessing critical board composition, governance and performance issues. This discussion is meant to help boards led by non-executive chairmen understand the defining activities and attributes of the best CEO-board relationships— relationships that consistently contribute to organizational performance and superior results.

Our goal is twofold: To provide boards and CEOs with a clear understanding of the essential elements of an effective CEO-board relationship and to enable boards and CEOs to both assess and improve their current performance in delivering against each of these relationship attributes. We have identified 25 essential elements of an effective CEO-board relationship, each with an actionable defining standard. We hope these prove useful in assessing the health and quality of the relationship dynamics in your firm.

……

Conclusion

We developed the framework for Essential Elements of an Effective CEO-Board Relationship with the input of sitting CEOs, chairmen and directors from a range of industry sectors and regions to provide guidance and structure for boards as they assess the clarity of their roles and the effectiveness of their relationships across the board as a whole. The 25 essential activities and attributes identified here can serve as a diagnostic to help those involved in the process rate the importance of each role’s responsibilities, as well as determine how effective individuals currently in these roles are delivering against those responsibilities.

Our Global CEO and Board Services practice has an ongoing commitment to investigate critical corporate governance and board performance issues and to share our findings—with the aim of promoting discussion and adoption of best practices in board oversight.

Une approche équilibrée à la rémunération des hauts dirigeants

Récemment, nous avons abordé l’épineuse question du benchmarking dans l’établissement de la rémunération des hauts dirigeants et montré les effets insidieux de l’utilisation de cette approche.

Aujourd’hui, je vous propose la lecture d’un court article paru sur le site de Equilar. Les auteurs suggèrent la considération de trois pratiques exemplaires pour la fixation de rémunérations équilibrée et justes.

1. Mettez l’accent sur des comparaisons réalistes de l’univers des pairs;

2. Divulguez vos critères de choix;

3. Assurez-vous de bien démontrer comment la rémunération est liée à la performance, notamment à la performance de l’entreprise à long terme.

Bonne lecture ! Vos commentaires sont les bienvenus.

Executive Compensation Benchmarking: 3 Best Practices

Determining compensation is a process of comparison. What’s a candidate worth to the organization in relation to others? What if this candidate took their talents elsewhere? What could they expect to earn from another employer? How does location, industry, and company size play into the picture?

When you’re dealing with compensation at the executive level, the stakes become higher and the compensation package more nuanced, which means the process of comparison becomes more complex.

Initially, attracting and motivating executive talent involves a large investment. And without performance-based incentives, annual salary increases can become an expectation rather than a reward.

On one end of the spectrum, ineffective benchmarking can lead to underperformance, over-inflated salaries, and sometimes even negative media coverage. On the other end of the spectrum, you don’t want to undercompensate talented executives and leave them feeling unmotivated—or worse—lose them to a competitor with better pay.

Effective executive compensation benchmarking can help an organization keep high-performers happy and motivated while staying out of the media spotlight. Use the following best practices to do it right.

1. Focus on authentic peer comparisons

Avoid the trap of performing “peer comparisons” using oversimplified criteria. In order to get an authentic benchmark, use more complex data mining. For example, not every CEO of a mid-sized organization in Silicon Valley deserves to be compensated at the same level as one who has just successfully led their company through an IPO. Factors like profitability are critical to getting an accurate compensation benchmark. Alternatively, age may be a completely irrelevant data point in determining appropriate peer comparisons.

2. Don’t dodge disclosure

The clarity with which your organization justifies compensation is important. When you can easily—and clearly—disclose data-driven justification for your compensation decisions, you’re supporting an atmosphere of transparency. And with transparency comes investor, client, and consumer confidence.

3. Bring up performance

Executive compensation packages that link pay to performance are critical in an era of increased scrutiny from institutional investors, regulatory agencies, proxy advisors, and shareholders. Incentive plans also benefit the executive and the organization with clear, detailed annual and long-term incentive points.

Le secteur des OBNL est-il dysfonctionnel sur le plan de la gouvernance | Mythes et réalités ?

Le Dr Eugene Fram a récemment publié un article pertinent qui fait l’apologie des OBNL, lesquelles doivent accomplir leurs missions en dépit de conditions sous-optimales.

L’article expose une série de caractéristiques des OBNL qui, trop souvent, contribuent à sous-estimer leur œuvre et qui teintent les perceptions du public envers celles-ci.

Parmi les particularités inhérentes à plusieurs OBNL, on retrouve souvent des éléments qui servent à justifier des lacunes de gouvernance; ces indices de dysfonction influent sur la perception des donateurs éventuels :

La plupart des organisations sont de très petites tailles;

Le défi de la gestion des bénévoles est très grand;

Les locaux et les équipements sont souvent peu attrayants;

Les relations entre le CA et la direction sont perçues comme immatures;

Les parties prenantes, notamment les donateurs, sont souvent mal informés de la distribution aux bénéficiaires, contribuant ainsi à créer l’impression qu’ils sont à la merci de la direction;

Les relations avec le CA sont souvent inhabituelles … en ce sens que les administrateurs ont tendance à s’immiscer régulièrement dans les activités des gestionnaires.

L’article tente de décrire ce qui peut être fait pour contrer ces perceptions.

Voici un extrait de l’article. Bonne lecture !

Dysfunction in the Nonprofit Sector—Reality or Myth ?

Solomon R. Guggenheim Museum 1071 Fifth Avenue (at 89th Street) New York, NY

Judging from the vast literature on dysfunctional nonprofit boards and organizations (my own posts included!) one might conclude that the majority of nonprofits are struggling, incompetent and/or in crisis. I argue that this is not the case. Decades of experience lead me to believe that nonprofits have the same functional variables as profit making organizations—dysfunctional at times like Target or GM; efficient like Apple or Whole Foods; adaptable like Del Monte and Cisco. Everybody doesn’t get it right all the time.

Perceptions become reality to those who are quick to embrace popular labels such as the overused term, “dysfunctional.” Obviously, in the case of nonprofits, such perceptions are harmful. Once evaluated in this way the stigma persists and can seriously reduce the level of support that is so critical to the work of these organizations.

What characteristics color these perceptions?

• Small Organizations: About one-third of the charitable nonprofits have gross receipts under $25,000 a year. At that level the vast majority can’t employ more than one full-time person, overworking those with job responsibilities that can’t be delegated. While small organization can’t do much to improve the misperceptions about nonprofit dysfunctions, more mature ones can take deliberate steps over time.

• The Volunteer Challenge: A large cadre of board and operational volunteers take time to assist struggling charities, which give the organizations appearances of nonprofit always being on the edge or existence. Many outsiders are unaware that those on management and staff are highly competent people who accept this employment condition because they know how their work can positively impact the lives of clients.

• Facilities: Nonprofit facilities are often second rate and appear highly dysfunctional. Client needs, not facilities, are primary to the board, management and staff.

• Board Relationships: Many relationships between the board and management can be similar to that of a “parent-child” one. In the words of one nonprofit director, “We tell the executive director exactly what to do.”

• Stakeholders: They often do not appreciate the tremendous impacts that the staff can have. Example: Donors often don’t have contact with those who directly benefit.

• Board Dysfunctions: A root cause of the perception may be due to a dysfunctional board trying to resolve internal conflicts, and there is little the management and staff can do about it. Valiant managements and staffs can sometimes achieve productive impacts without board support.

What can be done?

Competency & Relationships: I have encountered many CEOs who have more management expertise than many of their board members who are professors, accountants or physician, etc. While I appreciated that dealing with volunteer directors may involve working with some persons with outsized egos, the CEO must strive to portray himself as a competent manager. The positive outcome is that the CEO is viewed as a peer working with the board, not under the board.

Many staff persons figuratively stand ten feet tall for what they accomplish on behalf of clients.. The CEO has an obligation to make sure that the stories about outstanding staff personnel are well acknowledged, so that stakeholders know about them. This takes more then simple public relations events. It involves highlighting and rewarding those who are highly productive.

Facilities: I understand the tradeoff between expenditures for facilities versus expenditures for clients. Having first class facilities may even hinder achieving a mission if donors perceive their donations are being used for plush facilities. At the least, the nonprofit needs to have an uncluttered area for board meetings and events with outside stakeholders.

Implications: Many suggest that a nonprofit organization being perceived as dysfunctional is not an important issue, as long as mission objectives and impacts are achieved. I argue that more resources for clients could be developed if the perception is not a diminished one. Some can equate dysfunction with being inefficient. In addition, a positive perception might make it easier to attract more qualified board members, management and staff.

Rémunérations élevées dans les entreprises qui ont un actionnaire de contrôle !

Voici une étude très intéressante conduite par Kobi Kastiel, fellow à la Harvard Law School Program on Corporate Governance. La publication aura lieu en janvier 2015, mais le sommaire présenté ici résume bien le sens de celle-ci.

L’auteur montre que les compagnies qui ont un actionnaire de contrôle ont plus tendance à offrir des rémunérations « excessives » au premier dirigeant (PCD), qui lui, en retour, a tendance à s’entourer de dirigeants très bien payés.

L’étude explique que les actionnaires de contrôle paient plus pour s’assurer de la loyauté de la direction et maximiser les bénéfices qui leurs reviennent. L’auteur avance plusieurs autres raisons qui expliquent cette situation.

Le phénomène est tellement répandu dans ce type de compagnie que les recommandations des firmes de conseil en votation (telles que ISS), eu égard au « Say on Pay », devraient être suivies afin de neutraliser l’effet des actionnaires dominants qui ont l’habitude d’accepter des « packages » de rétribution beaucoup trop généreux, lesquels ne sont pas dans l’intérêt de tous les actionnaires …

L’article qui paraîtra dans Indiana Law Journal aura sûrement un impact sur les motivations derrières les rémunérations jugées excessives par beaucoup d’experts en gouvernance.

Bonne lecture !

Executive Compensation in Controlled Companies

More than a decade ago, Professors Lucian Bebchuk and Jesse Fried published the seminal work on the role and significance of managerial power theory in executive compensation. Their work cultivated a vivid debate on executive compensation in companies with dispersed ownership. The discourse on the optimality of executive pay in controlled companies, however, has been more monolithic. Conventional wisdom among corporate law theorists has long suggested that the presence of a controlling shareholder should alleviate the problem of managerial opportunism because such a controller has both the power and incentives to curb excessive executive pay.

My Article, Executive Compensation in Controlled Companies, forthcoming in the Indiana Law Journal, challenges that common understanding by proposing a different view that is based on an agency problem paradigm, and by presenting a comprehensive framework for understanding the relationship between concentrated ownership and executive pay. On the theoretical level, the Article shows that controlling shareholders often have incentives to overpay professional managers instead of having an arm’s-length contract with them, and therefore it suggests that compensation practices in a large number of controlled companies may have their own pathologies.

To begin with, controllers may wish to overpay managers in order to maximize their consumption of private benefits, while providing professional managers with a premium for their “loyalty” and for colluding with tunneling activities. This tendency is further aggravated by the use of control-enhancing mechanisms, such as dual-class share structures, which distort controllers’ monitoring incentives due to the wedge it creates between controllers’ cash flow rights and control rights. In addition, certain controllers, such as second generation controllers, could be “weak” due to their lack of experience, motivation or talent, and thus are more easily captured by professional CEOs. Controllers could also be biased due to their longstanding professional and social relationship with professional managers, and cannot be expected to exercise an impartial influence over the formulation of compensation contracts. This alternative view presented in the Article could also help explain recent puzzling phenomena such as the overly generous pay patterns in Viacom or other controlled companies, as well as the rise in say-on-pay rules in countries with concentrated ownership (as observed in a recent study by Thomas & Van der Elst).

On the empirical level, the Article questions conventional beliefs on executive pay by reviewing the recommendations on say-on-pay votes of Institutional Shareholder Services, Inc. (ISS), the leading and most influential proxy advisory firm in the United States. In determining whether to recommend shareholders to vote against a management say-on-pay proposal, ISS examines the company’s pay-for-performance alignment compared to peer group alignment over a sustained period, as well as the use of problematic pay practices. This, in turn, makes the ISS recommendation a useful tool for determining whether a pay package is accurately calibrated to maximize shareholder value.

The data presented in the Article, which is based on the review of ISS recommendations for say-on-pay votes at companies included in the Russell 3000 Index during the 2011 and the 2012 proxy seasons, provides an indication that the compensation packages of professional managers in controlled companies appears to be a bigger problem than initially predicted. In particular, it shows that a controlled company managed by a professional CEO has a slightly higher likelihood to receive a negative recommendation than a widely held company. This result remains substantially similar and statistically significant even when controlling for firms’ market value and industry, or when neutralizing the effect of controllers who are also the CEOs of their firms.

Finally, on the normative level, the Article shows that a U.S. style say-on-pay rule, which requires a non-binding vote by the shareholders as a whole, is unlikely to mitigate the agency problem in determining executive compensation in controlled companies. Since controlling shareholders exercise significant control over the directors’ election process, receiving a failed say-on-pay vote and facing a risk of a withhold vote recommendation for the election of certain directors is unlikely to have any effect on controllers’ ability to elect their directors. And when controllers face no sanctions for failing their say-on-pay votes, they are more likely to ignore shareholders’ concerns, and to use their voting power to approve compensation packages that are suboptimal for other shareholders. The Article, therefore, calls for a new regulatory approach: re-conceptualize the pay of professional managers in controlled companies as an indirect self-dealing transaction and subject it to the applicable rules that regulate conflicted transactions.

The full paper is available for download here.

En reprise : Dix (10) activités que les CA devraient éviter !

Voici le condensé d’un article publié par Deloitte en 2011 et que j’ai relayé à mes premiers abonnés au début de la création de mon blogue.

En revisitant mes billets, j’ai été en mesure de constater que plusieurs parutions étaient encore d’une grande pertinence. Ainsi, afin de revenir sur mes débuts comme blogueur, je vous présente un document de la firme Deloitte qui énumère dix (10) activités que les conseils d’administration doivent éviter de faire.

Les suggestions sont toujours aussi d’actualité. Bonne relecture !

Avoid presentation overload

Presentations should not dominate board meetings. If your board meetings consist of a scripted agenda packed with one presentation after another, there may not be sufficient time for substantive discussions. The majority of board meetings should be focused on candid dialogue about the critical strategic issues facing the company. The advance meeting materials should comprise information that provides the basis for the discussions held during the meeting. Management should feel confident that the board will read these pre-meeting materials, and the board must commit an adequate amount of time in advance of the meeting to do so.

Avoid understating the importance of compliance

There is no room for a culture of complacency when it comes to compliance with laws and regulations. As noted in the Deloitte publication

Avoid postponing the CEO succession discussion

CEO succession planning is one of the primary roles of the board. With the changing governance landscape and new and proposed regulations, the board has a full agenda these days. However, it is important to occasionally take a step back to ensure the board is addressing this important responsibility. During this time of rebuilding and prior to the implementation of new regulations, boards should assess where time is being spent and perhaps redirect focus on succession.

It is important to note that the succession planning process is continual and doesn’t end when a new CEO is selected. As the company evolves, its needs change, as do the skills required of the leadership team. The board needs to ensure that a leadership pipeline is developed and that its members have ample opportunity to connect with the next generation of leaders.

Avoid the trap of homogeneity

The topic of board composition and having the « right » people on the board continues to receive much attention. The SEC has proposed rules that would require more disclosure about director qualifications, including what makes each director qualified to participate on certain board committees. The shift to independent board members facilitated a move away from a « friends on the board » approach to a new mix. However, the board needs to assess whether this new mix translates into a positive and productive board dynamic. Boards should take a closer look at the expertise, experience and other qualities of each member to ensure the board that can provide the right expertise. Diversity of thought provides the perspectives needed to effectively address critical topics, which can contribute to greater productivity and ultimately a stronger board.

Avoid excessive short-term focus

Perpetual existence is one of the principal reasons for the initial development of a corporation. However, recent history offers many examples of modern corporate entities managing to reach short-term results at the expense of long-term prosperity. The board can demonstrate its leadership by being the voice of reason and openly discussing the sustainability of strategic initiatives. This can result in a well-governed company with a greater chance of achieving long-term, sustainable success.

Avoid approvals if you don’t understand the issue

Complex issues can have significant implications for the survival of an organization. It is up to directors to make sure that they understand issues that can alter the future of an enterprise before a vote is taken. This doesn’t require dissecting every detail, but it should consist of a thorough investigation and assessment of the risks and rewards of proposed transactions. If you don’t adequately understand the issue, ask for more education from management or external experts. It comes down to being able to ask the tough questions of management and probing further if things do not make sense. Consensus doesn’t mean going along with the crowd. True consensus results from a thorough debate and airing of the issues before the board, resulting in a more informed vote by directors.

Avoid discounting the value of experience

As a director, it is important to recognize the value that your experience can bring to the issues at hand. Good governance doesn’t mean checking all the right boxes. Rather, it is bringing together the diverse skills and experiences of each director to lead the company through challenges. Directors can provide greater insight by being ‘situationally aware’ when evaluating events and courses of action to take. Just as the captain of a ship needs to understand the various environmental factors that influence navigation, boards need to understand the external risks that may have an impact on the navigation of the company. Consider the context of the current issue, how it is similar to, or different from, previous experiences, what alternatives could be considered, and how outside forces may impede a successful outcome. Don’t discount the value of experience just because it was gained outside the boardroom.

Avoid stepping over the line into management’s role

A board that makes management decisions will find it difficult to hold the CEO accountable for the outcome. A director’s role is to oversee the efforts of management rather than stepping into management’s shoes. Directors must make a concentrated effort to ensure that they have clarity on management’s role, which is to operate the company. The distinction between the board and management is often blurred by directors who forget that they are not charged with running the day-to-day operations of an enterprise. This doesn’t prevent a director from getting into the details of an issue facing the company, but it does mean that directors should avoid stepping over the line.

Avoid ignoring shareholders

A company’s shareholders are among the most important and potentially vocal constituents of the enterprise. Concerns can sometimes be addressed by providing shareholders an audience with the board to air their concerns. Historically, compliance with the SEC Regulation Fair Disclosure (Reg FD) rules has been perceived as a hindrance to directors engaging in shareholder dialogue and meetings. As outlined in the Millstein Center for Corporate Governance and Performance policy briefing.

Avoid a bias to risk aversion

With the recent focus on excessive risk-taking and its impact on the credit crisis, there is concern that companies and boards may become risk-averse.

New Deloitte survey on risk management effectiveness

Les administrateurs doivent communiquer avec les actionnaires !

Vous trouverez, ci-dessous, un excellent article de John C. Wilcox*, président de Sodali, paru dans The Conference Board Governance Center Blog, sur la problématique de l’engagement des administrateurs avec leur actionnaires. Un sujet hautement d’actualité …

L’auteur affirme que la transparence est la clé de voute d’une bonne relation entre la direction et les actionnaires activistes. Selon lui, l’engagement est une mesure plutôt réactive parce ce que ce processus de communication avec les actionnaires n’établit pas une base solide à long terme ayant pour effet de prévenir l’activisme.

L’auteur propose plusieurs moyens très utiles pour rendre une organisation plus transparente et plus proactive dans ses communications avec ses actionnaires et avec les parties prenantes.

Une approche misant sur la valeur de la transparence est nécessaire pour assurer une bonne gouvernance. L’article évoque plusieurs moyens concrets pour y arriver en commençant par la clarification des rôles des administrateurs et l’établissement de la nette distinction à faire entre les tâches du CA et celles du management.

Voici les tâches qui relèvent de la responsabilité du conseil d’administration :

« Long-term strategy, company values, culture and “tone at the top”;
Oversight of management and long-term performance;
Accounting principles and the audit process;
Policies relating to ESG and sustainability;
Director nomination, selection and competence;
CEO succession planning;
Board evaluation;
Executive and board compensation;
Risk oversight;
Ethics, conflicts of interest and related-party transactions;
Non-financial performance goals and metrics;
Engagement and communication with shareholders and other constituents »

En fait, le CA doit avoir une voix clairement indépendante de la direction … et se doter des moyens pour l’exprimer.

Je vous invite à lire l’extrait ci-dessous qui résume bien la problématique abordée et à prendre connaissance de l’article qui suggère des moyens concrets pour accroître la transparence.

Directors Should Communicate With Shareholders

To demonstrate their effectiveness, corporate boards should increase transparency, provide an annual report of boardroom activities and take charge of their relations with shareholders.

With shareholders continuing to press for ever-deepening levels of engagement, companies must find a way to answer the most basic question of corporate governance: “How effective is the board of directors?” It is a question that can only be answered by the board itself, but it presents directors with a challenge as well as an opportunity. The challenge is to overcome the mindset, habits and perceived risks that have long kept boardroom activities under wraps. The opportunity, on the other hand, is to define governance and strategic issues from the board’s perspective, manage shareholder expectations, take the engagement initiative away from shareholders and reduce the likelihood of activism. Directors should give careful consideration to this opportunity. Over the long term, it will be far better for companies to control the process by which board transparency is achieved rather than waiting for yet again another set of governance reforms that could further erode the board’s authority.

Despite widespread support for board primacy and the board-centric governance model, boardroom transparency and director-shareholder relations are not a priority at most companies. A recent DealBook column in the New York Times described the situation as follows:

“What if lawmakers never spoke to their constituents? Oddly enough, that’s exactly how corporate America operates. Shareholders vote for directors, but the directors rarely, if ever, communicate with them.”

The problem is not limited to corporate America. Opaque boardrooms are a global phenomenon, particularly common in markets where companies are dominated by founding families, control groups, or the state.

The column concludes:

“…[S]ome form of engagement with shareholders – rather than directors simply taking their cues from management – would go a long way toward helping boards work on behalf of all shareholders…”
[Andrew Ross Sorkin, The New York Times, July 21, 2014]

Cues from management are not the only concern. In many global markets the board’s role is broadly defined, requiring directors to balance the competing demands of insiders, resolve conflicts of interest, deal with related-party transactions and juggle competing business and public policy goals in addition to their basic oversight duties. In these markets the need for transparency is even more compelling than in highly regulated markets, such as the UK, the European Union and the USA, where comprehensive legal, disclosure and accounting standards are well established.

Boards are under pressure…
Pressure for greater board transparency and more open communication continues to come from the usual suspects: activist investment funds, hedge funds with a range of long and short-term investment strategies, governance reform professionals, NGOs, shareholder advocacy groups, trade unions, individual shareholder activists, special interest proponents and other adversaries. Proxy advisory firms compound the pressure by providing a global audience for these disputes. When issues of policy are involved, the media and politicians often step in to further amplify the pressure on companies.

Companies have fought defensive rearguard actions against activism, occasionally prevailing in specific campaigns, but ultimately they have had to concede defeat on most policy disputes relating to governance and board accountability. The decade-long evolution of the say-on-pay vote exemplifies this pattern of opposition and retreat.

Despite the chain of losses, the high-volume debate between companies and shareholders about the merits of governance reform continues today: Are corporate governance standards good or bad for companies? Does shareholder activism produce value or destroy value? Should shareholders have more power or less? Are directors sufficiently independent or not? Should corporate governance be director-centric or shareholder-centric? Is chronic short-termism the fault of greedy shareholders, or greedy CEOs, or weak boards, or does it represent the inevitable decline of free-market capitalism, or all of the above? The list of questions goes on and on. The debate has not lessened in intensity, but it has not resolved the questions either. The few answers that have been provided remain largely determined by research methodologies, policy perspectives or the merits of individual cases. The real answer to most of the big questions seems inevitably to be “It depends…”

As 2015 approaches, it remains unclear how much the debate really matters or whether answers to these questions would be helpful to businesses and investors. For individual companies, the answer would seem to be No.

…but institutional investors are under pressure, too.
Today’s governance and regulatory environment is changing rapidly for shareholders and the investment community as well as for companies. In the extended wake of the financial crisis, institutional investors remain under the regulatory microscope. They can no longer claim privileged status or remain exempt from the governance and accountability standards they impose on portfolio companies.

Stewardship codes and new laws in several major markets now require institutional investors to intensify their oversight of portfolio companies and disclose publicly their governance policies, voting practices and engagement activities. These requirements have further led to the development of new means of collective institutional engagement through organizations such as the UK Investors Forum.

Proxy advisory firms, themselves under regulatory and industry pressure to provide less standardized governance reviews as well as more information about the integrity of their research and vote recommendations, are relying much less on their traditional check lists of governance externalities. In response to client demand, they are digging for more detailed information about board effectiveness at individual companies.

The financial crisis awakened the investment community and the general public to the failures that resulted from overreliance on quantitative analysis to evaluate companies’ performance and risk. In response to new rules, institutional investors are now beginning to include intangibles and non-financial performance metrics in their analytical models. This wider lens embraces corporate governance, environmental practices, social policies, ethics, culture, reputation and other non-quantitative elements that are predictive of long-term performance. The terms “ESG” (Environmental, Social, Governance) and “sustainability” have become a form of shorthand for defining this new way of looking holistically at business enterprises. A recently issued Directive on disclosure of non-financial and diversity information by the EU Council puts the legal imprimatur on this broader set of data.

The enlarged analytical framework has important implications for companies — and specifically for boards of directors. Responsibility for ESG and sustainability falls squarely on the board. The directors, rather than management, are deemed by shareholders to be answerable for ESG and sustainability.

Investor focus on non-financial criteria is producing some interesting results. In the U.S., the Council of Institutional Investors and its members have taken an approach that involves a carrot rather than a stick. CII has begun publishing periodic reports, based on member surveys and feedback, identifying companies whose disclosure practices exemplify best practice. A February 2014 CII report named six U.S. companies — Coca-Cola, GE, Pfizer, Prudential Financial, Microsoft and Walt Disney — as examples of excellence in disclosure of director qualifications and skills. In September 2014 CII published an additional report on board evaluation practices, citing GE (USA), Potash, Agrium (both Canadian companies), BHP Billiton (Australia), Dunelm (UK) and Randstad Holdings (Netherlands) as examples of excellence. According to deputy director Amy Borrus, CII plans to continue publishing reports on issues deemed important for its members to evaluate board effectiveness.

……

CONCLUSION
Although global corporate governance standards continue to uphold the director-centric model, information about board effectiveness remains fragmentary and inconsistent. Both companies and shareholders would benefit from an annual board narrative and a structured program for directors to communicate and engage with shareholders.

________________________________

*John C. Wilcox is Chairman of Sodali Ltd, a global consultancy providing companies and boards with services relating to corporate governance, shareholder relations, corporate actions and the capital markets. From 2005 to 2008 he served as Senior Vice President and Head of Corporate Governance at TIAA-CREF, one of the world’s largest private pension systems. Prior to joining TIAA-CREF he was chairman of Georgeson & Company, the U.S. proxy and investor relations.

Conseils d’administration français | « On est vraiment passé du copinage à la recherche de valeur ajoutée »

Vous trouverez, ci-dessous, un entretien mené par Patrick Amoux auprès d’Agnès Touraine, présidente de l’Institut Français des Administrateurs (IFA), publié dans le nouvel Economiste.fr, qui fait un excellent bilan de la gouvernance en France depuis 10 ans.

Les actionnaires peuvent lui dire merci … Si leurs représentants dans les conseils d’administrations se sont vigoureusement professionnalisés pour défendre leurs intérêts, se mettant ni plus ni moins aux standards anglo-saxons et aux normes de gouvernance moderne démodant les si fameux petits arrangement entre « chers amis » c’est à l’Institut Français des administrateurs, à Daniel Lebègue qui l’a créé, à Agnès Touraine qui le préside désormais. Une autre époque pour ces instance de pilotage de la stratégie des entreprises qui justifie quelques sérieuses remises en cause compte tenu de la consanguinité chronique des vieux modèles.

Diversité, internationalisation, transparence, éthique, formation, professionnalisme….sur tous les fronts, il faut batailler, convaincre, décider afin que l’autorégulation évite le couperet de la loi. Agnès Touraine est donc aux avants postes de tous ces combats. La méthode douce n’exclut pas la détermination. « Un projet nous tient vraiment à cœur, le lien entre la qualité de la gouvernance et la compétitivité. Il faut que les organes de gouvernance soient vus comme des apports de valeurs ajoutées. » Cela suppose la qualité des compétences composant les conseils. L’un des plus vastes chantiers de la présidente de l’IFA.

En 10 ans, Daniel Lebègue a fait un travail remarquable en travaillant à cette révolution de la gouvernance des entreprises en France. Il y a 15 ans, la gouvernance était quelque chose qui n’existait pas. Avec l’évolution des lois, des règlements, et le code Afep-Medef de 2013 qui s’est mis en place, c’est probablement l’un des domaines où il se produit une vraie révolution par rapport au comportement des administrateurs d’autrefois. Elle se concrétise notamment par l’instauration des comités. Il y a 15 ans, il n’y avait ni comité d’audit, ni comité de rémunération, ni comité de nomination. Aujourd’hui, il n’y a pas de groupe coté où il n’y ait pas un comité d’audit, bien sûr, et un comité de rémunération, de nomination.

Conseils d’administration : On est vraiment passé du copinage à la recherche de valeur ajoutée

Si vous souhaitez connaître la réalité française eu égard à la gouvernance, je vous conseille de lire cet article. Voici les sujets abordés dans cet entretien :

L’apport de compétences
L’entrée des femmes aux conseils d’administration
Le déficit d’administrateurs étrangers
Gouvernance et compétitivité
La dissociation président/directeur général
Les administrateurs indépendants
Les rémunérations des patrons
Les salariés administrateurs
Le défi numérique
Les conseils des ETI et des start-up
L’évaluation des conseils d’administration
La maison des administrateurs

_________________________________________

Les chiffres clés des conseils d’administration

Part des femmes (2014) :
-29 % pour le CAC40 (19 % en 2012)
-26 % au sein du SBF120 (15 % en 2012)

Administrateurs étrangers (2014) :
-30 % au sein du CAC40 (23 % en 2012)
-22 % au sein du SBF120 (13 % en 2012)

Source : Étude Ernst & Young et Labrador

Dissociation des fonctions :
-14 % des sociétés du CAC40 dissocient président du conseil et direction générale
-21 % des sociétés du SBF120

-11 % des sociétés du CAC40 ont une structure conseil de surveillance/directoire
-16 % du SBF120 ont opté pour ce mode de gouvernance

Source : Rapport du Haut Comité de gouvernement d’entreprise

Le Say on Pay :
> 90% d’approbation aux AG 2014 du SBF120

Nombre d’administrateurs du marché Euronext Paris :
1/ Cote parisienne : 966 émetteurs
7 045 administrateurs, dont 795 indépendants (11,3 %) et 1 316 femmes (18,7 %).
Moyenne de 7,3 administrateurs par émetteur.

2/ CAC 40 : 587 administrateurs dont 204 indépendants (34,7 %) et 172 femmes (29,3 %).
Moyenne de 14,7 administrateurs par émetteur.

Source : Cofisem ©

____________________________________________

*Bio express de Agnès Touraine, l’administrateure internationale

Sciences-Po, un MBA à Columbia, puis des débuts chez McKinsey… du classique haut de gamme, version délibérément grand large, pour l’entrée dans une vie professionnelle qui va mener Agnès Touraine chez Hachette. Membre du comité exécutif puis directrice de la branche grande diffusion du groupe Livre Hachette, avant de prendre la présidence de la filiale multimédia de CEP Communication, devenue Havas Interactive, elle devient ensuite directrice générale déléguée et membre du comité exécutif de Vivendi Universal Publishing du temps de Jean-Marie Messier et des grandes acquisitions américaines. Cette passionnée de nouvelles technologies crée ensuite la société de conseil en management Act III Consultants, puis une structure dédiée aux jeux vidéo, Act III Gaming. Administratrice de nombreuses sociétés (Neopost, ITV, Coridis, Playcast Media) et de l’Institut Français des administrateurs, dont elle a pris la présidence cette année.

Dix (10) des plus importantes activités pour une gouvernance efficace*

Vous trouverez ci-dessous un checklist qui vous sera utile pour effectuer une révision de vos processus de gouvernance.

Bonne lecture. Vos commentaires sont les bienvenus.

Top Ten Steps to Improving Corporate Governance

1.      Recognise that good governance is not just about compliance

Boards need to balance conformance (i.e. compliance with legislation, regulation and codes of practice) with performance aspects of the board’s work (i.e. improving the performance of the organisation through strategy formulation and policy making). As a part of this process, a board needs to elaborate its position and understanding of the major functions it performs as opposed to those performed by management. These specifics will vary from board to board. Knowing the role of the board and who does what in relation to governance goes a long way towards maintaining a good relationship between the board and management.

2.      Clarify the board’s role in strategy

It is generally accepted today that the board has a significant role to play in the formulation and adoption of the organisation’s strategic direction. The extent of the board’s contribution to strategy will range from approval at one end to development at the other. Each board must determine what role is appropriate for it to undertake and clarify this understanding with management.

3.      Monitor organisational performance

Monitoring organisational performance is an essential board function and ensuring legal compliance is a major aspect of the board’s monitoring role. It ensures that corporate decision making is consistent with the strategy of the organisation and with owners’ expectations. This is best done by identifying the organisation’s key performance drivers and establishing appropriate measures for determining success. As a board, the directors should establish an agreed format for the reports they monitor to ensure that all matters that should be reported are in fact reported.

4.      Understand that the board employs the CEO

In most cases, one of the major functions of the board is to appoint, review, work through, and replace (when necessary), the CEO. The board/CEO relationship is crucial to effective corporate governance because it is the link between the board’s role in determining the organisation’s strategic direction and management’s role in achieving corporate objectives.

5.      Recognise that the governance of risk is a board responsibility

Establishing a sound system of risk oversight and management and internal control is another fundamental role of the board. Effective risk management supports better decision making because it develops a deeper insight into the risk-reward trade-offs that all organisations face.

6.      Ensure the directors have the information they need

Better information means better decisions. Regular board papers will provide directors with information that the CEO or management team has decided they need. But directors do not all have the same informational requirements, since they differ in their knowledge, skills, and experience. Briefings, presentations, site visits, individual director development programs, and so on can all provide directors with additional information. Above all, directors need to be able to find answers to the questions they have, so an access to independent professional advice policy is recommended.

7.      Build and maintain an effective governance infrastructure

Since the board is ultimately responsible for all the actions and decisions of an organisation, it will need to have in place specific policies to guide organisational behaviour. To ensure that the line of responsibility between board and management is clearly delineated, it is particularly important for the board to develop policies in relation to delegations. Also, under this topic are processes and procedures. Poor internal processes and procedures can lead to inadequate access to information, poor communication and uninformed decision making, resulting in a high level of dissatisfaction among directors. Enhancements to board meeting processes, meeting agendas, board papers and the board’s committee structure can often make the difference between a mediocre board and a high performing board.

8.      Appoint a competent chairperson

Research has shown that board structure and formal governance regulations are less important in preventing governance breaches and corporate wrongdoing than the culture and trust created by the chairperson. As the “leader” of the board, the chairperson should demonstrate strong and acknowledged leadership ability, the ability to establish a sound relationship with the CEO, and have the capacity to conduct meetings and lead group decision-making processes.

9.      Build a skills-based board

What is important for a board is that it has a good understanding of what skills it has and those skills it requires. Where possible, a board should seek to ensure that its members represent an appropriate balance between directors with experience and knowledge of the organisation and directors with specialist expertise or fresh perspective. Directors should also be considered on the additional qualities they possess, their “behavioural competencies”, as these qualities will influence the relationships around the boardroom table, between the board and management, and between directors and key stakeholders.

10.     Evaluate board and director performance and pursue opportunities for improvement

Boards must be aware of their own strengths and weaknesses, if they are to govern effectively. Board effectiveness can only be gauged if the board regularly assesses its own performance and that of individual directors. Improvements to come from a board and director evaluation can include areas as diverse as board processes, director skills, competencies and motivation, or even boardroom relationships. It is critical that any agreed actions that come out of an evaluation are implemented and monitored. Boards should consider addressing weaknesses uncovered in board evaluations through director development programs and enhancing their governance processes.

_________________________________________

* En reprise

Voir le site www.effectivegovernance.com.au

Document révisé de KPMG sur les bonnes pratiques de constitution d’un Board | The Directors Toolkit*

Voici la dernière version du document australien de KPMG, très bien conçue, qui répond clairement aux questions que tous les administrateurs de sociétés se posent dans le cours de leurs mandats.

Même si la publication est dédiée à l’auditoire australien de KPMG, je crois que la réalité règlementaire nord-américaine est trop semblable pour se priver d’un bon « kit » d’outils qui peut aider à constituer un Board efficace.

On parle ici d’un formidable document électronique de 130 pages, donc long à télécharger. Voyez la table des matières ci-dessous.

J’ai demandé à KPMG de me procurer une version française du même document mais il ne semble pas en exister.

Vous trouverez, ci-dessous, une vidéo qui présente les nouveautés du guide de gouvernance telles que précédemment publiées.

The Directors’ Toolkit videos: What’s new

Bonne lecture !

The Directors Toolkit

Our business environment provides an ever-changing spectrum of risks and opportunities. The role of the director continues to be shaped by a multitude of forces including economic uncertainty, larger and more complex organisations, the increasing pace of technological innovation and digitisation along with a more rigorous regulatory environment.

At the same time there is more onus on directors to operate transparently and be more accountable for their actions and decisions.

To support directors in their challenging role KPMG has created The Directors’ Toolkit. This guide, in a user-friendly electronic format, empowers directors to more effectively discharge their duties and responsibilities while improving board performance and decision-making.

Key topics :

Duties and responsibilities of a director

Oversight of strategy and governance

Managing shareholder and stakeholder expectations

Structuring an effective board and sub-committees

Enabling key executive appointments

Managing productive meetings

Better practice terms of reference, charters and agendas

Establishing new boards.

___________________________________________

Article relié :

Le comité de gouvernance du C.A. | Élément clé d’une solide stratégie (jacquesgrisegouvernance.com)

* En reprise

Comportements néfastes liés au narcissisme de certains PCD (CEO) | En reprise

Il est indéniable qu’un PCD (CEO) doit avoir une personnalité marquante, un caractère fort et un leadership manifeste. Ces caractéristiques tant recherchées chez les premiers dirigeants peuvent, dans certains cas, s’accompagner de traits de personnalité dysfonctionnels tels que le narcissisme.

C’est ce que Tomas Chamorro-Premuzic soutien dans son article publié sur le blogue du HuffPost du 2 janvier 2014. Il cite deux études qui confirment que le comportement narcissique de certains dirigeants (1) peut avoir des effets néfastes sur le moral des employés, (2) éloigner les employés potentiels talentueux et (3) contribuer à un déficit de valeurs d’intégrité à l’échelle de toute l’organisation.

L’auteur avance que les membres des conseils d’administration, notamment ceux qui constituent les comités de Ressources humaines, doivent être conscients des conséquences potentiellement dommageables des leaders flamboyants et « charismatiques ». En fait, les études montrent que les vertus d’humilité, plutôt que les traits d’arrogance, sont de bien meilleures prédicteurs du succès d’une organisation.

La première étude citée montre que les organisations dirigées par des PCD prétentieux et tout-puissants ont tendances à avoir de moins bons résultats, tout en étant plus sujettes à des fraudes.

La seconde étude indique que les valeurs d’humilité incarnées par un leader ont des conséquences positives sur l’engagement des employés.

Voici en quelques paragraphes les conclusions de ces deux études. Bonne lecture !

In the first study, Antoinette Rijsenbilt and Harry Commandeur assessed the narcissism levels of 953 CEOs from a wide range of industries, as well as examining objective performance indicators of their companies during their tenure. Unsurprisingly, organizations led by arrogant, self-centered, and entitled CEOs tended to perform worse, and their CEOs were significantly more likely to be convicted for corporate fraud (e.g., fake financial reports, rigged accounts, insider trading, etc.). Interestingly, the detrimental effects of narcissism appear to be exacerbated when CEOs are charismatic, which is consistent with the idea that charisma is toxic because it increases employees’ blind trust and irrational confidence in the leader. If you hire a charismatic leader, be prepared to put up with a narcissist.

In the second study, Bradley Owens and colleagues examined the effects of leader humility on employee morale and turnover. Their results showed that « in contrast to rousing employees through charismatic, energetic, and idealistic leadership approaches (…) a ‘quieter’ leadership approach, with listening, being transparent about limitations, and appreciating follower strengths and contributions [is the most] effective way to engage employees. » This suggests that narcissistic CEOs may be good at attracting talent, but they are probably better at repelling it. Prospective job candidates, especially high potentials, should therefore think twice before being seduced by the meteoric career opportunities outlined by charismatic executives. Greed is not only contagious, but competitive and jealous, too…

The Dark Side of Executive Narcissism: How CEOs Destroy Companies’ Reputation and Employee Morale

If we can educate organizations, in particular board members, on the virtues of humility and the destructive consequences of narcissistic and charismatic leadership, we may see a smaller proportion of entitled, arrogant, and fraudulent CEOs — to everyone’s benefit. Instead of worshiping and celebrating the flamboyant habits of corporate bosses, let us revisit the wise words of Peter Drucker, who knew a thing or two about management:

The leaders who work most effectively, it seems to me, never say ‘I’. And that’s not because they have trained themselves not to say ‘I’. They don’t think ‘I’. They think ‘we’; they think ‘team’. They understand their job to be to make the team function. They accept responsibility and don’t sidestep it, but ‘we’ gets the credit.

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Conclusion

Partagez (share) ce post

1. Focus on authentic peer comparisons

2. Don’t dodge disclosure

3. Bring up performance

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Related articles

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

Partagez (share) ce post

___________________________________________________________

Partagez (share) ce post