Voici un document synthèse récemment publié par Deloitte sur la gouvernance des OBNL. C’est un document très précieux car il examine chaque élément de la gouvernance de ces organisations, répondant ainsi à de multiples questions que se posent les dizaines de milliers d’administrateurs québécois (le document est en français).Comme vous le verrez, on y présente, en annexe, plusieurs guides et outils qui seront assurément très pertinents pour un administrateur :
Modèle de mandat pour le conseil d’administration d’un OBNL
Modèle de mandat pour le comité d’audit d’un OBNL
Modèle de formulaire d’évaluation de la performance du conseil
Modèle de matrice des compétences du conseil
Je vous invite donc à prendre connaissance de ce document. Vous trouverez ci-dessous un texte introductif à l’ouvrage.
Faites-moi part de vos commentaires en tant que membre de conseil d’administration d’OBNL. Bonne lecture !
Il y a près de 20 ans, nous avons publié la première édition de L’efficacité du conseil d’administration d’un OSBL dans le but de présenter aux organismes à but non lucratif (OBNL) (aussi appelés OSBL) un exposé des enjeux de la gouvernance. Notre objectif était de les aider à surmonter les obstacles à la mise en place d’un système de gouvernance efficace. Depuis, les pratiques en la matière ont bien évolué. Au fil des années, de nouvelles exigences ont été mises en place à l’intention des sociétés ouvertes et les meilleures pratiques autre fois adoptées par un petit groupe de sociétés sont maintenant devenues la norme au sein de la plupart des organismes.
English: The Deloitte Centre in Auckland City, New Zealand. (Photo credit: Wikipedia)
Parallèlement à l’évolution des pratiques de gouvernance, les attentes des parties prenantes se sont accrues et tous les organismes ayant une obligation d’information du public, y compris les OBNL, sont désormais concernés. De nos jours, bon nombre d’OBNL vont au-delà de la simple conformité aux exigences réglementaires et ont adopté des pratiques exemplaires de gouvernance empruntées aux sociétés ouvertes ainsi que des pratiques établies et encouragées par le public et la communauté des OBNL elle-même.
Cette troisième édition de L’efficacité du conseil d’administration d’un OSBL traite de la gouvernance des OBNL en fonction de la situation actuelle de la réglementation et des parties prenantes. Elle s’adresse en premier lieu aux administrateurs, car ce sont eux qui assument au final la responsabilité de la gérance de l’organisme. Nous espérons que ce texte permettra au lecteur de mieux comprendre les responsabilités des administrateurs d’un OBNL et l’amènera à orienter son organisme vers des pratiques de gouvernance plus efficaces.
Dans cette édition, nous :
Expliquons d’abord le sens d’une bonne gouvernance et nous soulignons son importance pour les OBNL;
Présentons ensuite le cadre de gouvernance de Deloitte, qui reflète les pratiques exemplaires de gouvernance actuelles et émergentes;
Traitons également en détail de chaque élément de ce cadre en plusieurs volets et proposons une série de questions pour permettre aux administrateurs de comprendre et de surmonter les difficultés au sein de leur propre organisme;
Traitons aussi d’enjeux propres aux OBNL et proposons certaines mesures que les OBNL et leur conseil d’administration peuvent prendre pour y répondre;
Présentons finalement certains outils populaires que Deloitte a conçus pour aider les conseils à s’acquitter de leurs responsabilités.
Vous trouverez, ci-dessous, une présentation Power Point que Richard Leblanc a livrée à la conférence annuelle de la Canadian Society of Corporate Secretaries, le 21 août 2013 à Halifax, NS.
Cette présentation aborde tous les points chauds dans le domaine de la rémunération des hauts dirigeants. Richard a eu la générosité de mettre cette présentation en ligne via le groupe de discussion Boards & Advisors. Il s’agit d’une mine d’information pour toute personne intéressée par l’influence de la gouvernance sur les rémunérations des dirigeants.
President Barack Obama and Treasury Secretary Timothy Geithner announce new limits on executive compensation. (Photo credit: Wikipedia)
Si vous êtes intéressés par certains aspects plus spécifiques de ces questions, je suis assuré qu’il se fera un plaisir de vous donner de plus amples informations. Voici un résumé des 10 thèmes abordés dans cette présentation. Bonne lecture.
1. Red flags and best practices;
2. Shareholder engagement and activism;
3. Changes to executive compensation;
4. Compensation of oversight functions (Canada, FSB);
5. Internal pay equity (coming in August);
6. Independent director compensation: Case;
7. Incorporating LT NF metrics into compensation: Case;
Aujourd’hui, j’ai choisi de partager un court article de Martha C. White paru dans NBC News qui présente la situation des « minorités » et des femmes sur les conseils d’administration des grandes entreprises. On verra qu’il y a encore beaucoup de chemin à parcourir afin de bien saisir toute l’importance de la diversité dans la gouvernance des entreprises.
Les recherches empiriques sont pourtant très nombreuses à montrer la sagesse et l’efficacité de se doter d’une culture de la diversité. Bonne lecture.
Achieving diversity takes more than just adding a woman or a minority to the board and calling it a day, though. « Tokenism isn’t the answer, » Peterson said. A sole dissenter might not feel comfortable voicing an opposing view, or they simply might not have enough clout to effect real change by themselves. « We know that tokens in small groups are often paid less attention. When minority group members win 30 or 40 percent of positions in a small group, such as a board, others start paying attention, » Dobbin said. « The good news is that more and more boards now have two women or two African-Americans, and are moving away pure tokenism — one from each group. »
Women and minorities make up only a slim fraction of corporate America’s board membership, a status quo that’s remained virtually unchanged over the past eight years. Experts predict this will hurt companies as they expand into overseas markets and as the ethnic makeup of the United States changes.
In its new biennial study of the gender and ethnic makeup of Fortune 100 and Fortune 500 company boards, the Alliance for Board Diversity found that white men hold more than two-thirds of board seats in both groups. Women hold 20 percent of Fortune 100 board seats, and minorities, who comprise 37 percent of the country’s population, only hold 16 percent.
Ron Parker, president and CEO of The Executive Leadership Council, one of the organizations that comprises the Alliance for Board Diversity, said companies today understand the importance of diversifying in order to gain global market share but often overlook diversity when it comes to their own governance.
Rene Mansi | E+ | Getty Images
« They’re missing the perspective of the growth engine that’s going to fuel their enterprises, » he said. « Different perspectives bring the opportunities for innovation. »
« Boards that are more diverse generally make better decisions. Typically, groupthink is the enemy of good decision-making, » said Eric C. Peterson, manager of diversity and inclusion at the Society for Human Resource Management.
Plusieurs articles au sujet de la diversité sur les C.A. :
Voici les résultats d’une étude empirique réalisée par un groupe de chercheurs éminents : Lucian Bebchuk, Harvard Law School, Alon Brav, Duke University, et Wei Jiang, Columbia Business School, et publiée dans le Harvard Law School Forum on Corporate Governance and Financial Regulation le 19 août 2013. Selon les auteurs, cette étude démontre que les activités des investisseurs activistes (Hedge Funds) n’ont pas d’effets négatifs sur les intérêts à long-terme des entreprises et de leurs actionnaires.
Les résultats de l’étude indiquent que les comportements des actionnaires activistes ont même des effets positifs à long terme, contrairement aux prétentions de plusieurs opposants de ces activités insuffisamment règlementées. Nous avons souvent discuté de cette problématique sur notre blogue mais c’est la première fois que nous présentons les résultats d’une recherche scientifique aussi importante.
Je vous invite à prendre connaissance du résumé de cette étude en consultant le document ci-dessous.
Il y a deux grands courants de pensée qui divisent le monde de la gouvernance et qui s’opposent “royalement” :
(1) celui des investisseurs activistes qui tentent de tirer profit des failles perçues dans les orientations et la gestion des grandes entreprises cotées, en investissant massivement dans celles-ci et en proposant des changements radicaux de stratégies (fusion, restructuration, recapitalisation, contestation des PCD et des membres de conseils, etc…).
Selon ce groupe, les actionnaires sont rois et on se doit d’intervenir lorsque les entreprises ne sont pas gérées efficacement.
(2) celui des défenseurs de l’autorité des C.A. dans leurs rôles de fiduciaires, représentant les intérêts des actionnaires et des autres parties prenantes.
Selon ce groupe, ce sont les conseils d’administration qui prennent les décisions de nature stratégique en fonction de l’intérêt à long terme des entreprises. Les autorités règlementaires doivent donc intervenir pour restreindre les activités des investissements “court-termistes” […].
Voici un document émanant d’une présentation d’Yvan Allaire* à la conférence nationale de l’Institut des administrateurs de sociétés (Institute of Corporate Directors) à Toronto le 22 mai 2013 dont le thème était Shareholder Activism: Short vs. Long-termism. Dans son article, l’auteur prend une position affirmative en tentant d’expliquer les comportements court-termistes des actionnaires (investisseurs) activistes. Ce document mérite que l’on s’y penche pour réfléchir à trois questions fondamentales en gouvernance. Les questions soulevées dans le document sont les suivantes :
(1) La gestion avec une perspective court-termiste représente-t-elle un problème sérieux ?
(2) Les investisseurs activistes sont-ils des joueurs court-termistes dont les actions ont des conséquences négatives pour les entreprises à long terme ?
(3) Les conseils d’administration des sociétés canadiennes doivent-ils être mieux protégés des actions des investisseurs activistes et des offres d’achat hostiles ? […]
J’ai choisi de partager avec les lecteurs un article de Holly J. Gregory, associé de Weil, Gotshal & Manges LLP, paru sur le blogue de Harvard Law School Forum (HLSF) on Corporate Governance and Financial Regulation. Ce billet présente un solide argumentaire en faveur de la préservation d’un juste équilibre entre les principaux acteurs de la gouvernance : les actionnaires, les administrateurs, les managers, les conseillers et les autorités règlementaires.
Il est clair que le conseil d’administration, élu par les actionnaires, a toujours la responsabilité de l’orientation, de la surveillance et du suivi de l’organisation. Mais l’environnement de la gouvernance a changé et les actionnaires peuvent maintenant se référer aux avis exprimés par les firmes spécialisées de conseils en procuration pour mieux faire entendre leurs voix.L’auteur tente de clarifier les rôles de tous les acteurs en insistant sur les équilibres fragiles à préserver dans la gouvernance des sociétés […]
Dans ce billet, nous présentons une solide prise de position sur le comportement des fonds activistes (“hedge funds”) par Martin Lipton, partenaire fondateur de la firme Wachtell, Lipton, Rosen & Katz, et publiée dans Harvard Law School Forum on Corporate Governance. L’auteur montre comment les fonds activistes peuvent souvent agir en fonction d’intérêts contraires aux actionnaires. L’auteur soulève une multitude de questions qui doivent trouver des réponses adéquates […]
Voici une excellente revue, parue dans Bloomberg Businessweek, au sujet de l’interventionnisme croissant des investisseurs institutionnels dans les décisions des conseils d’administration. On assiste à un changement significatif du comportement des grands investisseurs qui se joignent de plus en plus aux groupes d’actionnaires activistes pour exiger des changements dans le management de l’entreprise, plus particulièrement dans la conduite du PCD (CEO).
Les PCD sont de plus en plus conscients de l’influence significative des actionnaires et des grands investisseurs dans la gestion de l’entreprise; ils apprennent à reconnaître qui est le réel patron de l’organisation (le C.A., de plus en plus influencé par l’activisme des actionnaires).
L’article résume la situation de la manière suivante : “As big investors press Boards, the number of directors who failed to win majorities in shareholder votes has almost tripled since 2006″. […]
Dans son blogue, Governance Gateway, Richard Leblanc exprime son point de vue (1) sur les raisons qui incitent les actionnaires activistes à intervenir dans les activités des entreprises, et (2) sur le concept d’actionnariat au sens large. L’auteur tente de répondre à plusieurs questions fondamentales :
Quelles sont les responsabilités des conseils d’administration dans les cas d’activisme des actionnaires et d’offres d’achat non-sollicitées ?
Quel est le devoir du C.A. envers les actionnaires … et envers les parties prenantes ?
Comment définir la “valeur” des actionnaires ?
Quelle est la place des consultants dans ce processus ?
Autant de questions auxquelles l’auteur tente d’apporter des réponses sensés. Ce sont des prises de positions qui peuvent avoir de grandes incidences sur le modèle de gouvernance existant ! […]
Le Conference Board publie un compte rendu d’experts sur l’activisme des actionnaires en période d’incertitude. The recent Governance Watch webcast, Shareholder Activism in Uncertain Times, raised important questions for both management and boards to consider in the midst of an economic climate that is making many companies particularly. […]
Ci-dessous un extrait de l’article de Bebchuket al.
We recently completed an empirical study, The Long-Term Effects of Hedge Fund Activism, that tests the empirical validity of a claim that has been playing a central role in debates on corporate governance – the claim that interventions by activist shareholders, and in particular activist hedge funds, have an adverse effect on the long-term interests of companies and their shareholders. While this “myopic activists” claim has been regularly invoked and has had considerable influence, its supporters have thus far failed to back it up with evidence. Our study presents a comprehensive emp irical investigation of this claim. Our findings have important policy implications for ongoing policy debates on corporate governance and the rights and role of shareholders…
… Our study uses a dataset consisting of the full universe of approximately 2,000 interventions by activist hedge funds during the period 1994–2007. We identify for each activist effort the month (the intervention month) in which the activist initiative was first publicly disclosed (usually through the filing of a Schedule 13D). Using the data on operating performance and stock returns of public companies during the period 1991-2012, we track the operating performance and stock returns for companies during a long period – five years – following the intervention month. We also examine the three-year period that precedes activist interventions and that follows activists’ departure.
Hauser Hall (Photo credit: Wikipedia)
Starting with operating performance, we find that operating performance improves following activist interventions and there is no evidence that the improved performance comes at the expense of performance later on. During the third, fourth, and fifth year following the start of an activist intervention, operating performance tends to be better, not worse, than during the pre-intervention period. Thus, during the long, five-year time window that we examine, the declines in operating performance asserted by supporters of the myopic activism claim are not found in the data. We also find that activists tend to target companies that are underperforming relative to industry peers at the time of the intervention, not well-performing ones.
We then turn to stock returns following the initial stock price spike that is well-known to accompany activist interventions. We first find that, consistent with the results obtained with respect to pre-intervention operating performance, targets of activists have negative abnormal returns during the three years preceding the intervention. We then proceed to examine whether, as supporters of the myopic activism claim believe, the initial stock price reflects inefficient market pricing that fails to reflect the long-term costs of the activist intervention and is thus followed by stock return underperformance in the long term.
In investigating the presence of negative abnormal returns during this period, we employ three standard methods used by financial economists for detecting stock return underperformance. In particular, the study examines: first, whether the returns to targeted companies were systematically lower than what would be expected given standard asset pricing models; second, whether the returns to targeted companies were lower than those of “matched” firms that are similar in terms of size and book to market; and, third, whether a portfolio based on taking positions in activism targets and holding them for five years underperforms relative to its risk characteristics. Using each of these methods, we find no evidence of the asserted reversal of fortune during the five-year period following the intervention. The long-term underperformance asserted by supporters of the myopic activism claim, and the resulting losses to long-term shareholders resulting from activist interventions, are not found in the data.
We also analyze whether activists cash out their stakes before negative stock returns occur and impose losses on remaining long-term shareholders. Because activist hedge funds have been documented to deliver adequate returns to their own investors, such a pattern is a necessary condition for long-term shareholders being made worse off by activist interventions. We therefore examine whether targets of activist hedge funds experience negative abnormal returns in the three years after an activist discloses that its holdings fell below the 5% threshold that subjects investors to significant disclosure requirements. Again using the three standard methods for detecting the existence of abnormal stock returns, we find no evidence that long-term shareholders experience negative stock returns during the three years following the partial or full cashing out of an activist’s stake.
We next turn to examine the two subsets of activist interventions that are most resisted and criticized – first, interventions that lower or constrain long-term investments by enhancing leverage, beefing up shareholder payouts, or reducing investments and, second, adversarial interventions employing hostile tactics. In both cases, interventions are followed by improvements in operating performance during the five-year period following the intervention, and no evidence is found for the adverse long-term effects asserted by opponents.
Finally, we examine whether activist interventions render targeted companies more vulnerable to economic shocks. In particular, we examine whether companies targeted by activist interventions during the years preceding the financial crisis were hit more in the subsequent crisis. We find no evidence that pre-crisis interventions by activists were associated with greater declines in operating performance or higher incidence of financial distress during the crisis.
Our findings that the data does not support the claims and empirical predictions of those holding the myopic activism view have significant implications for ongoing policy debates. Going forward, policymakers and institutional investors should not accept the validity of assertions that interventions by hedge funds are followed by long-term adverse consequences for companies and their long-term shareholders. The use of such claims as a basis for limiting shareholder rights and involvement should be rejected.
*Lucian Bebchuk is Professor of Law, Economics, and Finance at Harvard Law School. Alon Brav is Professor of Finance at Duke University. Wei Jiang, Professor of Finance at Columbia Business School. This post is based on their study, The Long-Term Effects of Hedge Fund Activism, available here. An op-ed about the article published in the Wall Street Journal summarizing the results of the study is available here.
McKinsey is the world’s largest and most profitable management consulting firm, as well one of the most difficult places to get hired. Over its 87-year existence it’s had a massive impact on the U.S. economy according to « The Firm, » a forthcoming book by Duff McDonald.
In a New York Observer column, pointed out by Mike Dang at The Billfold, McDonald argues that the massive modern-day gap between executive and worker pay has its origin with the consulting firm.
It’s a fascinating story that all started with General Motors commissioning a study on executive pay from McKinsey consultant Arch Patton. He found that from 1939 to 1950, hourly employee pay more than doubled, but top management pay went up only 35%.
The study, published in the Harvard Business Review, became a series and turned national attention toward executive compensation, promoting the idea that higher pay and bonuses were the lever to attract and retain top executives.
Patton became a superstar, hired by managers who were not surprisingly interested in hearing they were underpaid. McKinsey’s CEO apparently thought this type of consulting was beneath the firm, but wasn’t about to turn down the money.
« For several years, Mr. Patton personally accounted for almost 10 percent of the firm’s billings, » McDonald writes. « At the end of the war, only 18 percent of companies in the country had bonus plans. By 1960, about 60 percent of them did. »
In 1961 came the books « Men, Money and Motivation: Executive Compensation as an Instrument of Leadership » and « What Is an Executive Worth?«
One McKinsey consultant told McDonald that Patton wrote « the same article [26] times for the Harvard Business Review. »
Because of its popularity and McKinsey’s influence, the idea became an entrenched philosophy, as did the concept that as a company grows, so should CEO pay.
While Patton’s compensation philosophy started with rigorous analysis of performance, soon it took on a life of its own, with executive pay spiraling higher and higher, while worker pay was left to languish.
Here’s where we are today, according to a report by The State Of Working America, a project of the Economic Policy Institute:
The AFL-CIO puts the number even higher, saying that the average Fortune 500 CEO makes 354 times the average wage of their employees. Some executives make 1,000 times more.
Of course, McKinsey and Patton weren’t the only factor. Bull markets and economic expansion help push pay upwards and encourage investors to look the other way — and once it moves up, pay is slow to move back down. Meanwhile, slack labor markets and weak growth prospects help to explain stagnant wages.
Regardless, McKinsey and Patton may have been a major driver in the gap between CEO and employee wages exploding by a factor of 10 since the middle of the century.
L’auteur de ce billet, Eugene Fram*, tente de décrire comment le conseil d’administration d’une OBNL peut tracer une ligne entre (1) la confiance et la liberté accordée à son PDG et (2) le rôle d’orientation et de surveillance qui lui échoit.
C’est un article pertinent car on sait que les OBNL ont souvent des problèmes à distinguer les activités qui relèvent du conseil d’administration de celles qui relèvent du PDG (CEO). En bref, les membres du C.A. doivent se questionner sur l’étendue du pouvoir à consentir à leur PDG, et savoir quand trop de pouvoir est préjudiciable à l’organisation. Pour bien circonscrire les rôles, il est essentiel que les membres du conseil soient indépendants de la direction de l’organisation.
Les recherches montrent que les PDG qui agissent sans balises précises de la part de leurs conseils d’administration sont susceptibles d’abuser de leur position en s’octroyant des bénéfices personnels ou en prenant des risques excessifs.
David Larcker and Brian Tanya**, Stanford University professors, have come to the following conclusions about CEO power and raise some pertinent questions about the role of the board, based on research mainly centered on for-profit organizations. The research literature clearly shows that having a powerful CEO creates the potential for him or her to abuse this position to extract personal benefits or engage in excessive risky activities. At the same time, the research also shows that (CE0) power is often critical to the successful completion of tasks and the achievement of corporate objectives (and nonprofit missions). To this end, powerful CEOs can ultimately be a success or a failure. Are shareholders (stakeholders of nonprofits) better or worse off with a powerful CEO?
Voici un ensemble de responsabilités qui relèvent du conseil d’administration. Il est important d’en discuter en C.A. et de s’assurer que le PDG est bien au courant de celles-ci. L’auteur insiste également sur la nécessité d’établir une solide relation de confiance entre le conseil et le PDG de l’OBNL. Bonne lecture !
• Establishes long-term organizational objective and outcomes.
• Sets overall policy affecting strategies designed to achieve objectives, outcomes and impacts.
• Employs the CEO
Red Cross Memorial (Photo credit: cliff1066™)
(2) Judges Management Actions
• Robustly evaluates short-term (annual) and long-term performance of management
• Determines whether policies and strategies are being carried out, whether outcomes and impacts are being achieved
(3) Approves management actions
• Critically reviews, approves or disapproves proposals in policy and strategic areas (for example, major capital needs or expenditures and major contracts)
• Provides formal recognition and acceptance of executive decisions when related to operational actions.
(4) Advises management
• Acts in an advisory or consultative capacity on operations when sought by management
(5) Receives information from management
• Regularly receives reports on the organization (e.g., performance, program development, external factors, concerns)
(6) Acts as a public, community or industry resource to management
• Keeps the organization attuned to the external environment in which it operates
* Eugene Fram & Vicki Brown (2011), “Policy vs. Paper Clips: How using the corporate model makes a nonprofit board more efficient and effective.” http://amzn.to/eu7nQl
**David Larcker et Brian Tanya, « Is a Powerful CEO Good or Bad for Shareholders ?« , Stanford Closer Look Series, 13 november 2012.
Vous trouverez, ci-dessous, un billet publié par Richard Leblanc* sur son blogue Governance Gateway. L’auteur a interrogé un nombre important d’acteurs de la scène de la gouvernance (investisseurs activistes, gestionnaires de fonds privés, administrateurs, CEO) et a tenu compte des points de vue émis par plusieurs groupes d’experts dans le domaine :
« Advisory work with regulators; assessments of leading boards; expertwitness work; academic and practitioner literature; current and emerging regulations; director conferences and webinars; lectures the author has delivered to the Institute of Corporate Directors and Directors College in Canada; discussions in the author’s LinkedIn group, Board and Advisors; and research being conducted with the author and Henry D. Wolfe on building high performance public company boards ».
Il s’agit d’une proposition de changement à trois niveaux :
(1) Renforcement du rôle du C.A. en matière de création de valeur;
Je vous invite à consulter cette liste afin d’avoir un aperçu des types de changements proposés. Vos commentaires sont toujours les bienvenus. Bonne lecture.
En rappel, vous trouverez, ci-joint, une excellente publication de la NACD (National Association of Corporate Directors) qui présente les grands défis et les enjeux qui attendent les administrateurs de sociétés au cours des prochaines années.
Ce document est un recueil de textes publiés par les partenaires de la NACD : Heidrick & Struggles International, Inc., KPMG’s Audit Committee Institute, Marsh & McLennan Companies, NASDAQ OMX, Pearl Meyer & Partners et Weil, Gotshal & Manges LLP.
Vous y trouverez un ensemble d’articles très pertinents sur les sujets de l’heure en gouvernance. J’ai déjà publié un billet sur ce sujet le 23 juin 2013, en référence à cette publication.
Chaque année, la NACD se livre à cet exercice et publie un document très prisé !
Voici comment les firmes expertes se sont répartis les thèmes les plus « hot » en gouvernance. Bonne lecture.
Boardroom, Tremont Grand (Photo credit: Joel Abroad)
(1) What to Do When an Activist Investor Comes Calling par Heidrick & Struggle
(2) KPMG’s Audit Committee Priorities for 2013 par KPMG’s Audit Committee Institute
(3) Board Risk Checkup—Are You Ready for the Challenges Ahead ? par Marsh & McLennan Companies
(4) Boardroom Discussions par NASDAQ OMX
(5) Paying Executives for Driving Long-Term Success par Pearl Meyer & Partners
(6) What Boards Should Focus on in 2013 par Weil, Gotshal and Manges, LLP
Today, directors are operating in a new environment. Shareholders, regulators, and stakeholders have greater influence on the boardroom than ever before. In addition, risks and crisis situations are occurring with greater frequency and amplitude. Directors have a responsibility to ensure their companies are prepared for these challenges—present and future.This compendium provides insights and practical guidance from the nation’s leading boardroom experts—the National Association of Corporate Directors’ (NACD’s) strategic content partners—each recognized as a thought leader in their respective fields of corporate governance.
Interventionnisme des investisseurs activistes VS défenseurs de l’autorité des C.A. | Un débat de fond
Il y a deux grands courants de pensée qui divisent le monde de la gouvernance et qui s’opposent « royalement ».
(1) celui des investisseurs activistes qui tentent de tirer profit des failles perçues dans les orientations et la gestion des grandes entreprises cotées, en investissant massivement dans celles-ci et en proposant des changements radicaux de stratégies (fusion, restructuration, recapitalisation, contestation des PCD et des membres de conseils, etc…).
Selon ce groupe, les actionnaires sont rois et on se doit d’intervenir lorsque les entreprises ne sont pas gérées efficacement.
(2) celui des défenseurs de l’autorité des C.A. dans leurs rôles de fiduciaires, représentant les intérêts des actionnaires et des autres parties prenantes.
Selon ce groupe, ce sont les conseils d’administration qui prennent les décisions de nature stratégique en fonction de l’intérêt à long terme des entreprises. Les autorités règlementaires doivent donc intervenir pour restreindre les activités des investissements « court-termistes ».
L’article de Nathan Vardi, publié dans Forbes le 6 août 2013, fait le point sur la situation qui règne dans le monde des investissements à caractère « actif » (hedge funds). Il présente, selon moi, singulièrement bien les arguments invoqués par chaque partie.
Quel est votre position en regard de ces deux conceptions : celui des actionnaires activistes, représenté par Carl Icahn, ou celui des gardiens de la bonne gouvernance, représenté par Martin Lipton ?
Voici quelques extraits de l’article. Veuillez lire l’article de M. Vardi pour plus de détails. Bonne lecture.
Once disparaged as greenmailers and corporate raiders who pillage for quick profit, activist investors have become rock stars and rebranded themselves as advocates of all shareholders, taking on the kind of shareholder watchdog role that institutional investors like big pension funds and mutual funds have long resisted. They are not done rebranding themselves. Peltz, whose Trian Management oversees $6.5 billion, describes his investment style not as activism but as “constructivism.” Larry Robbins, who runs $6 billion hedge fund firm Glenview Capital Management, one of the best-performing hedge funds over the last 18 months, wants to be seen as a “suggestivist.” The idea is to appear less threatening while trying to do things like replace the management and board of directors of a company, like Robbins is trying to do at hospital company Health Management Associates. “In Hollywood terms, we are more Mr. Spock than William Wallace,” Robbins recently said. “I get a lot more out of these CEOs by not embarrassing them publicly, by not being viewed as trying to nail their scalp to the wall,” Barry Rosenstein, the prominent activist investor who runs $5 billion Jana Partners, told The Wall Street Journal.
Icahn Lab Conference Room (Photo credit: Joe Shlabotnik)
Others, however, have a different way of describing what these guys are up to. “In what can only be considered a form of extortion, activist hedge funds are preying on American corporations to create short-term increases in the market price of their stock at the expense of long-term value,” famed lawyer Martin Lipton wrote earlier this year. “The consequences of radical stockholder-centric governance and short-termism prompt a series of questions that cry out for re-examination.” Lipton, the most prominent defender of corporate boards in their battles with activist investors and the inventor of the so-called poison pill defense tactic, even suggests that the new wave of activist investors might be responsible for “a very significant part of American unemployment and a failure to achieve a GDP growth rate sufficient to pay for reasonable entitlements.”
Lipton has been blasting activist investors for decades. But last week activist investing went Hollywood as George Clooney attacked Dan Loeb, who has been criticizing the management of Sony Pictures Entertainment as part of his effort to get Sony to spin off its U.S. entertainment assets. “[Loeb] calls himself an activist investor, and I would call him a carpet bagger,” Clooney told Deadline.com. “What he’s doing is scaring studios and pushing them to make decisions from a place of fear. Why is he buying stock like crazy if he’s so down on things? He’s trying to manipulate the market.” Clooney said activist hedge fund managers like Loeb don’t create jobs, unlike the movie industry that is a significant U.S. exporter…
Nevertheless, activist-investor efforts to drive shareholder value at companies seem to be all over the financial markets. The renaissance is best typified by billionaire investor Carl Icahn, who is going stronger than ever. With more money at his disposal than ever before, Icahn, now 77, has been a huge player in financial markets in recent months. He has vigorously taken on Michael Dell’s effort to take Dell private, played a role in kicking Aubrey McClendon out of Chesapeake Energy, and is at the center of the billionaire brawl over Herbalife. He has enjoyed rich recent successes from companies ranging from CVR Energy to Netflix. His Icahn Enterprises has seen its stock rise by 57% this year. Icahn hasn’t changed his tune in years and recently argued that “what I do is good for America.”…
Activist players are continuing to push the envelope and bringing their brand of investing to new industry and geographic frontiers. Dan Loeb, whose Third Point hedge fund has been one of the best-performing hedge funds over the last 18 months or so, stormed Silicon Valley, sparking sweeping changes to the flailing Internet giant Yahoo’s management and making about $1 billion in realized and paper profits. Now, he’s off to Japan, trying to shake things up at Sony in a country that has long resisted reform at many levels. Loeb is not the only brash American to attack a foreign company and sometimes these guys even manage to win broad support for their efforts in foreign countries. Not long ago, William Ackman struck at Canadian Pacific Railway and his intervention has helped spark a huge run-up in the stock. The business magazine of Canada’s authoritative Globe and Mail newspaper didn’t call him a carpet bagger, rather they branded Ackman, who is not a corporate executive, “CEO of The Year.”
Il y a deux grands courants de pensée qui divisent le monde de la gouvernance et qui s’opposent « royalement ».
(1) celui des investisseurs activistes qui tentent de tirer profit des failles perçues dans les orientations et la gestion des grandes entreprises cotées, en investissant massivement dans celles-ci et en proposant des changements radicaux de stratégies (fusion, restructuration, recapitalisation, contestation des PCD et des membres de conseils, etc…).
Selon ce groupe, les actionnaires sont rois et on se doit d’intervenir lorsque les entreprises ne sont pas gérées efficacement.
(2) celui des défenseurs de l’autorité des C.A. dans leurs rôles de fiduciaires, représentant les intérêts des actionnaires et des autres parties prenantes.
Selon ce groupe, ce sont les conseils d’administration qui prennent les décisions de nature stratégique en fonction de l’intérêt à long terme des entreprises. Les autorités règlementaires doivent donc intervenir pour restreindre les activités des investissements « court-termistes ».
L’article de Nathan Vardi, publié dans Forbes le 6 août 2013, fait le point sur la situation qui règne dans le monde des investissements à caractère « actif » (hedge funds). Il présente, selon moi, singulièrement bien les arguments invoqués par chaque partie.
Quel est votre position en regard de ces deux conceptions : celui des actionnaires activistes, représenté par Carl Icahn, ou celui des gardiens de la bonne gouvernance, représenté par Martin Lipton ?
Voici quelques extraits de l’article. Veuillez lire l’article de M. Vardi pour plus de détails. Bonne lecture.
Once disparaged as greenmailers and corporate raiders who pillage for quick profit, activist investors have become rock stars and rebranded themselves as advocates of all shareholders, taking on the kind of shareholder watchdog role that institutional investors like big pension funds and mutual funds have long resisted. They are not done rebranding themselves. Peltz, whose Trian Management oversees $6.5 billion, describes his investment style not as activism but as “constructivism.” Larry Robbins, who runs $6 billion hedge fund firm Glenview Capital Management, one of the best-performing hedge funds over the last 18 months, wants to be seen as a “suggestivist.” The idea is to appear less threatening while trying to do things like replace the management and board of directors of a company, like Robbins is trying to do at hospital company Health Management Associates. “In Hollywood terms, we are more Mr. Spock than William Wallace,” Robbins recently said. “I get a lot more out of these CEOs by not embarrassing them publicly, by not being viewed as trying to nail their scalp to the wall,” Barry Rosenstein, the prominent activist investor who runs $5 billion Jana Partners, told The Wall Street Journal.
Icahn Lab Conference Room (Photo credit: Joe Shlabotnik)
Others, however, have a different way of describing what these guys are up to. “In what can only be considered a form of extortion, activist hedge funds are preying on American corporations to create short-term increases in the market price of their stock at the expense of long-term value,” famed lawyer Martin Lipton wrote earlier this year. “The consequences of radical stockholder-centric governance and short-termism prompt a series of questions that cry out for re-examination.” Lipton, the most prominent defender of corporate boards in their battles with activist investors and the inventor of the so-called poison pill defense tactic, even suggests that the new wave of activist investors might be responsible for “a very significant part of American unemployment and a failure to achieve a GDP growth rate sufficient to pay for reasonable entitlements.”
Lipton has been blasting activist investors for decades. But last week activist investing went Hollywood as George Clooney attacked Dan Loeb, who has been criticizing the management of Sony Pictures Entertainment as part of his effort to get Sony to spin off its U.S. entertainment assets. “[Loeb] calls himself an activist investor, and I would call him a carpet bagger,” Clooney told Deadline.com. “What he’s doing is scaring studios and pushing them to make decisions from a place of fear. Why is he buying stock like crazy if he’s so down on things? He’s trying to manipulate the market.” Clooney said activist hedge fund managers like Loeb don’t create jobs, unlike the movie industry that is a significant U.S. exporter…
Nevertheless, activist-investor efforts to drive shareholder value at companies seem to be all over the financial markets. The renaissance is best typified by billionaire investor Carl Icahn, who is going stronger than ever. With more money at his disposal than ever before, Icahn, now 77, has been a huge player in financial markets in recent months. He has vigorously taken on Michael Dell’s effort to take Dell private, played a role in kicking Aubrey McClendon out of Chesapeake Energy, and is at the center of the billionaire brawl over Herbalife. He has enjoyed rich recent successes from companies ranging from CVR Energy to Netflix. His Icahn Enterprises has seen its stock rise by 57% this year. Icahn hasn’t changed his tune in years and recently argued that “what I do is good for America.”…
Activist players are continuing to push the envelope and bringing their brand of investing to new industry and geographic frontiers. Dan Loeb, whose Third Point hedge fund has been one of the best-performing hedge funds over the last 18 months or so, stormed Silicon Valley, sparking sweeping changes to the flailing Internet giant Yahoo’s management and making about $1 billion in realized and paper profits. Now, he’s off to Japan, trying to shake things up at Sony in a country that has long resisted reform at many levels. Loeb is not the only brash American to attack a foreign company and sometimes these guys even manage to win broad support for their efforts in foreign countries. Not long ago, William Ackman struck at Canadian Pacific Railway and his intervention has helped spark a huge run-up in the stock. The business magazine of Canada’s authoritative Globe and Mail newspaper didn’t call him a carpet bagger, rather they branded Ackman, who is not a corporate executive, “CEO of The Year.”
Vous trouverez, ci-dessous, un document émanant d’une présentation d’Yvan Allaire* à la conférence nationale de l’Institut des administrateurs de sociétés (Institute of Corporate Directors) à Toronto le 22 mai 2013 dont le thème était Shareholder Activism: Short vs. Long-termism.
Dans son article, l’auteur prend une position affirmative en tentant d’expliquer les comportements court-termistes des actionnaires (investisseurs) activistes. Ce document, à ma connaissance, n’a pas été traduit en français mais il mérite que l’on s’y penche pour réfléchir à trois questions fondamentales en gouvernance. Les questions soulevées dans le document (traduites en français) sont les suivantes :
(1) La gestion avec une perspective court-termiste représente-t-elle un problème sérieux ?
(2) Les investisseurs activistes sont-ils des joueurs court-termistes dont les actions ont des conséquences négatives pour les entreprises à long terme ?
(3) Les conseils d’administration des sociétés canadiennes doivent-ils être mieux protégés des actions des investisseurs activistes et des offres d’achat hostiles ?
Voici quelques extraits du document ci-dessous. Je vous invite à en prendre connaissance :
Bad capitalism is finance-driven capitalism; it is capitalism without true owners, a capitalism in which corporate leaders, motivated by the carrot of lavish incentives and the stick of humiliating replacement, are singularly focused on generating short-term value for shareholders. It is a system where financial operators reap immense riches from activities of no social value.
The board members of the privatized company, often made up of general partners of the fund, are compensated at a level and in a manner hardly conceivable for board members of a publicly listed company.
Capitalism Plus retail box cover. (Photo credit: Wikipedia)
Board members of the newly privatized company must not be « independent » and rarely are; a majority of board members of publicly listed companies must be « independent ».
The boards of listed corporations must discharge fully all their fiduciary and legal responsibilities; that component of governance grabs a good portion of the time available to board members; privatized companies have none of these hassles and can concentrate on strategy, cash flow management, etc.
The board of a privatized companies will call directly on outside consulting firms to assess the company, its competitors and so forth, and the external consultants will report directly to the board. Now imagine that the board of a publicly listed company were to inform management that it intends to hire some firm to audit the company’s strategy and benchmark its performance. That would not fly well and would certainly create severe tensions between the board and management. Management would claim that the board is straying away from its governance role; it would contend that the company regularly gets this sort of studies and reports regularly to the board on their results, etc.
Be that as it may, a governance revolution is in the making. Novel ways of dealing with the insuperable limits of current forms of governance must be found.
Indeed, the theme of this conference could well have been « Good Capitalism versus Bad Capitalism » because short-termism and unchecked activities of speculative funds are emblematic of « bad capitalism », of the kind we must get rid.
Vous trouverez, ci-dessous, un article publié par Dr Eugene Fram sur son blogue Nonprofit Management. L’auteur énonce plusieurs propositions susceptibles d’améliorer la gouvernance des entreprises, plus particulièrement des OBNL.
3. Increase the directors’ knowledge of the nonprofit’s field(s) of operations
English: Carol Chyau and Marie So, co-founders of Ventures in Development, a nonprofit organization that promotes social enterprise in Greater China. (Photo credit: Wikipedia)
4. Enable directors to have access to information and to managers reporting to the CEO
5. Select directors who can contribute directly to the organization’s mission
6. Hold management accountable
7. Control management’s influence on director selection
8. Address conflicts of interest fully
9. Match management’s compensation with contributions to achieving mission, corporate performance and risk management
10. Stay on message when communicating organizational outcomes
11. Understand the difficulty, if not the impossibility, of replacing elected directors
Poursuivant notre politique de collaboration avec des experts en gouvernance, nous avons demandé à Hélène Solignac*, associée responsable des activités “gouvernance” de la firme française Rivoli Consulting, d’agir à titre d’auteure invitée. Le billet proposé est récemment paru sur son blogue; l’auteure explique, dans un premier temps, pourquoi il est important de renforcer la collaboration au sein de l’équipe du conseil. La question du comment sera abordée dans un article subséquent.
Un conseil n’est pas un groupe comme les autres : de taille très variable selon le type d’organisation (sociétés par actions cotées ou non cotées, mutuelles et institutions de prévoyance, associations et fondations..), ou leur actionnariat (familial, investisseurs institutionnels, private equity, public,…), il est composé de membres dont l’expérience, l’expertise, la culture sont de plus en plus diversifiées : c’est d’ailleurs une pratique de bonne gouvernance que de nommer au sein des conseils, aux côtés des représentants des actionnaires/sociétaires, des salariés et des dirigeants de l’entreprise, des administrateurs indépendants qui apportent un regard externe et veillent à la préservation des intérêts des actionnaires minoritaires non représentés au conseil. La diversification des conseils est largement encouragée par les codes de gouvernance, et compte parmi les propositions du plan d’action de la Commission Européenne de décembre 2012.
Voici donc l’article en question, reproduit ici avec la permission de l’auteure. Vos commentaires sont appréciés. Bonne lecture.
Souvent de cultures différentes, les administrateurs ne partagent donc pas tous la culture de l’entreprise. C’est aussi fréquemment le cas du dirigeant exécutif, lorsqu’il est recruté à l’extérieur.
Par ailleurs, contrairement aux comités de direction, les membres des conseils passent très peu de temps à travailler ensemble : le nombre de séances se situe en moyenne entre 6 et 9 par an dans les sociétés cotées. Or le conseil, organe collégial, doit non seulement débattre, mais aussi être capable de prendre rapidement des décisions qui seront ensuite assumées par l’ensemble de ses membres.
Comment alors faire de ce groupe hétérogène une équipe efficace, à même de soutenir et de challenger le management, de jouer pleinement son rôle de contrôle, mais aussi de proposer des orientations, de sélectionner le dirigeant et d’évaluer sa performance, d’être le garant de l’intérêt social et de la pérennité de l’entreprise ?
Comment dépasser les enjeux de pouvoirs, les coalitions, prendre en compte tous les points de vue et parvenir au consensus ?
Comment intégrer les nouveaux membres, le conseil étant amené à se renouveler régulièrement ?
Comment gérer la relation avec l’exécutif de l’entreprise ?
Comment organiser le processus de décision pour le rendre le plus efficace possible ?
English: Helicopter view of the Crédit Lyonnais tower in Lyon (France) Français : Vue d’hélicoptère de la tour du crédit lyonnais à Lyon (France) (Photo credit: Wikipedia)
Au-delà des compétences techniques, le processus de sélection des administrateurs prend désormais de plus en plus en compte les qualités personnelles du candidat : capacité à intégrer la culture et les valeurs de l’entreprise, vision d’ensemble, écoute, capacité à présenter clairement son point de vue, à poser des questions (et à obtenir des réponses), à débattre de façon constructive, capacité à travailler en équipe et à accepter la décision collective…toutes qualités utiles pour adopter la posture d’un membre du conseil, bien différente de celle d’un dirigeant exécutif habitué à décider seul en tant que responsable hiérarchique.
Le président a bien évidemment un rôle clé : organiser la prise de parole, encourager systématiquement les contributions au débat, et favoriser des prises de décision consensuelles, mais aussi fixer l’ordre du jour, veiller à la qualité de l’information et à l’intégration des nouveaux membres, recevoir régulièrement et individuellement les administrateurs, faciliter les contacts avec le management, s’assurer que les comités rendent compte de leurs travaux au conseil, gérer efficacement la relation avec l’exécutif, …
L’éventail de plus en plus large des sujets qui sont aujourd’hui du ressort du conseil, auquel répond la diversité des profils et des compétences de ses membres, nécessitent une implication de plus en plus forte du président en tant qu’animateur du conseil, afin d’obtenir les meilleures contributions individuelles possibles, et d’organiser un processus de décision efficace. Selon que les fonctions de président et de directeur général sont dissociées ou non, selon le mode de gouvernance du président, plus ou moins participatif, le travail collectif du conseil sera sensiblement différent.
Le conseil est un groupe humain dont le fonctionnement est particulièrement complexe, et les responsabilités considérables. La qualité des échanges, les attitudes des différents acteurs et les relations au sein du conseil sont déterminantes dans l’efficacité du processus de décision.
Nous reviendrons dans un prochain billet sur les moyens d’optimiser la dynamique collective du conseil et les relations entre ses membres.
________________________________
* Hélène Solignac est associée responsable des activités “gouvernance” de la firme Rivoli Consulting depuis 2009. Diplômée de Sciences Po, Hélène Solignac a exercé des responsabilités au sein du Crédit Lyonnais pendant près de 20 ans, d’abord en tant que responsable commercial auprès de grands groupes internationaux; elle a participé, comme secrétaire du conseil d’administration et des comités de direction générale, à la privatisation et à l’introduction en bourse de la banque, avant de prendre en charge le suivi des filiales et participations à la direction financière du groupe, où elle a exercé des mandats d’administrateur dans différentes filiales.
En 2006, elle a rejoint InvestorSight, conseil en communication financière, membre associé de l’Institut Français des Administrateurs, comme responsable du pôle Gouvernance ; elle a développé une activité de conseil en préparation d’assemblées générales et est notamment intervenue sur des dossiers d’activisme actionnarial ; elle a participé à différentes études sur ce thème des assemblées générales qu’elle a présentées dans le cadre de Matinales de l’IFA et a également été rédactrice de la « Lettre des AG » (analyse des assemblées générales du SBF 120).
Elle est présentement Corporate Advisory auprès de Sodali, conseillère en relations actionnariales pour les sociétés cotées, responsable de la formation « Actif humain » du Certificat Administrateur de Société Sciences Po-IFA, Co-fondatrice du Cercle des Administrateurs Sciences Po, membre de l’IFA et de l’AFGE (Association Française de Gouvernement d’Entreprise) et administratrice de l’association humanitaire Matins du Soleil.
Vous serez sûrement intéressés par les résultats de cette recherche publié par R. Christopher Small et paru dans HLS Forum on Corporate Governance and Financial Regulation. Les résultats montrent que les PCD qui se retirent ont tendance à divulguer des prévisions de profits futurs plus positives et plus optimistes que lors des divulgations des années antérieures, surtout si leur rémunération incitative est élevée et si les mécanismes de suivis par le C.A. sont faibles.
C’est un article qui montre clairement la nécessité d’avoir un conseil d’administration vigilant à l’occasion du départ d’un PCD. Vos commentaires sont les bienvenus.
Theory suggests that Chief Executive Officers (CEOs) with short horizons with their firm have weaker incentives to act in the best interest of shareholders (Smith and Watts 1982). To date, research examining the “horizon problem” focuses on whether CEOs adopt myopic investment and accounting policies in their final years in office (e.g., Dechow and Sloan 1991; Davidson et al. 2007; Kalyta 2009; Antia et al. 2010). In our paper, Forecasting Without Consequence? Evidence on the Properties of Retiring CEOs’ Forecasts of Future Earnings, forthcoming in The Accounting Review, we extend this line of research by investigating whether retiring CEOs are more likely to engage in opportunistic forecasting behavior in their terminal year relative to other years during their tenure with the firm. Specifically, we contrast the properties (issuance, frequency, news, and bias) of earnings forecasts issued by retiring CEOs during pre-terminal years (where the CEO will be in office when the associated earnings are realized) with forecasts issued by retiring CEOs during their terminal year (where the CEO will no longer be in office when the associated earnings are realized). We also examine circumstances in which opportunistic terminal-year forecasting behavior is likely to be more or less pronounced.
retirement (Photo credit: 401(K) 2013)
Our predictions are based on several incentives that arise (or increase) during retiring CEOs’ terminal year with their firm. Specifically, relative to CEOs who will continue with their firm, retiring CEOs face strong incentives to engage in opportunistic terminal-year forecasting behavior in an attempt to inflate stock prices during the period leading up to their retirement. Deliberately misleading forecasts can be used to influence stock prices. Consistent with this argument, prior work shows that managers use voluntary disclosures opportunistically to influence stock prices (Noe 1999; Aboody and Kasznik 2000; Cheng and Lo 2006; Hamm et al. 2012) and that managers use opportunistic earnings forecasts to manipulate analysts’ (Cotter et al. 2006) and investors’ perceptions (Cheng and Lo 2006; Hamm et al. 2012) in an effort to maximize the value of their stock-based compensation (Aboody and Kasznik 2000). Moreover, because SEC trading rules related to CEOs’ post-retirement security transactions are less stringent than those in effect during their tenure with the firm, post-retirement transactions can be made before the earnings associated with the opportunistic forecast are realized and with reduced regulatory scrutiny.
To test our predictions, we first identify all CEO turnover events in Execucomp from 1997 through 2009 (a total of 3,548 events). For each CEO turnover event identified, we perform detailed searches of SEC filings, executive biographies (appearing on various social media outlets such as LinkedIn, Forbes People Finder, etc.), press releases, and related disclosures to determine whether the CEO turnover was due to retirement. Our results indicate that retiring CEOs are more likely to issue forecasts of future earnings and that they issue such forecasts more frequently in their terminal year relative to other years during their tenure with the firm. Moreover, we find that retiring CEOs’ terminal-year forecasts of future earnings are more likely to convey good news and are more optimistically biased relative to pre-terminal years. Our findings, that retiring CEOs engage in opportunistic terminal-year forecasting behavior, represent a previously undocumented implication of the “horizon problem.” Furthermore, we find that opportunistic terminal-year forecasting behavior is more pronounced in the presence of higher CEO equity incentives and discretionary expenditure cuts in the terminal year, and less pronounced in the presence of stronger monitoring mechanisms (e.g., higher institutional ownership).
Our results should be of interest to market participants (e.g., investors, analysts, etc.) who use information from management earnings forecasts. However, market participants’ ability to use our evidence is contingent on their knowledge of (or ability to anticipate) a given CEO’s impending retirement. Our study should also be of interest to stakeholders (e.g., boards of directors, regulators, etc.) who seek to implement incentive mechanisms that mitigate agency conflicts. Interestingly, our results suggest that equity incentives (a tool commonly used to align incentives and minimize agency costs) can have the unintended consequence of creating or exacerbating opportunistic forecasting. Thus, CEO and firm characteristics (such as equity incentives) may have competing effects on various horizon-problem induced behaviors.
Voici un article publié par JOANN S. LUBLIN paru dans The Wall Street Journal qui montre l’évolution remarquable de la gouvernance des sociétés au cours des quarante dernières années. Vous verrez qu’il y a une tendance lourde à limiter le nombre de mandats des administrateurs de sociétés, mais que ce changement ne se fait pas sans heurt.
Plusieurs pensent que, malgré certains avantages évidents à avoir des administrateurs séniors sur les C.A., cette situation est un frein à la diversité et au renouvellement des générations au sein des conseils d’administration. C’est un article qui discute de ces problématiques avec nuance et avec des statistiques à l’appui.
Je souligne certains extraits pertinents de cet article. Bonne lecture. Faites-moi part de nos commentaires sur ce sujet assez controversé.
Board colleagues say long-serving members often provide useful context about a company, its industry and its past. But activist investors contend the growing ranks of long-serving board members occupy spots that otherwise might go to younger and fresher talent. « Over-tenured directors also frustrate the goal of race and gender diversity, » adds Brandon Rees, acting head of the AFL-CIO’s Office of Investment.
Staying Power
Twenty-eight outside directors have at least 40 years’ tenure on a U.S. public company board.
Voir l’article pour identifier les noms
While 40-year directors are rare, companies appear increasingly reluctant to shake up their boardrooms. Among Russell 3000 companies, 6,457 independent directors—nearly 34% of the total—have served a decade or longer, GMI found. That’s up from 3,216 or about 18% in 2008.
Companies in Standard & Poor’s 500 stock index elected the smallest number of new directors last year in 10 years, according to a study by recruiters Spencer Stuart.
Some activist investors believe long-tenured board members can become too cozy with management.
The Council of Institutional Investors, a governance advocate, may soon urge shareholders and boards to look more skeptically at the independence of long-serving directors, says Ann Yerger, its executive director.
« Board members may not be able to fully exercise independent judgment after several years of service, » she adds. The council represents 125 pension funds with more than $3 trillion of assets.
Certain less-tenured directors favor term limits to hasten turnover. But just 17 major corporations impose such limits, Spencer Stuart’s study showed. A 12-year term makes sense because « board members become very stale after a while, » says Fred Hassan, a Time Warner Inc. TWX +0.55%director since 2009 and former Schering-Plough Corp. MRK -0.21%chief executive. He hopes to propose that limit for new board members of the media giant.
Not surprisingly, long-serving board members frequently oppose such rules. Instead, they support replacing poor performers through periodic evaluations of individual members. Richard T. Fisher, a Leggett director since 1972, says he and David S. Haffner, the firm’s CEO, sold the idea to its board last year.
Voici un article de Richard Leblanc paru dans BoardExpert.com que vous apprécierez sûrement. Comme à son habitude, Richard utilise un style direct et simple pour aborder l’une des facettes les plus complexes de la gouvernance des organisations : la rémunération incitative reliée à la performance à long terme.
L’auteur discute plus particulièrement d’un objet novateur : la rémunération des administrateurs alignée sur les intérêts des actionnaires.
Voici un extrait de l’article ainsi qu’un aperçu de l’approche qu’il suggère. Qu’en pensez-vous ?
« Most independent directors on public company boards are compensated in a blend of cash and company shares. The equity component is typically restricted or deferred until the director retires from the board, thus postponing taxes and enabling the director to amass a portion of equity in the company to align his or her interests with shareholders (it is believed). The equity can be a predetermined number of restricted shares, or a set monetary amount in the form of share “units.”
The problem with paying independent directors this way is that there is little incentive for personal performance or company performance. Directors get paid the cash and equity regardless. There is little if any downside, especially when directors can ride a stock market or Fed driven increase in overall share prices. Not surprisingly, the activists noted this lack of incentive pay.
Sometimes money is a powerful incentive. (Photo credit: wayneandwax)
It is hardly surprising that boards do not focus on value creation, strategic planning, or maximizing company performance, survey after survey, as much as they do on compliance. Their compensation structure does not incent them to. Compensation incentives drive behavior, both for management and for directors ».
Here is what is needed to align director pay with shareholder interests:
Directors should be required to issue cheques from their personal savings accounts to purchase shares in the company. Bill Ackman of Pershing Square stated that if Canadian Pacific directors were required to cut cheques for $100,000 each, the CEO would have been fired prior to Pershing Square being involved. Mr. Ackman is right. “Skin in the game” for a director does not mean shares are given to a director in lieu of service. The motivational factor to be attuned to shareholders is greater if directors are actual investors in the company. In private equity companies, non-management directors are encouraged to “buy into” the company and invest on the same terms as other investors.
For Directors’ equity to vest (the portion they did not purchase), hurdles would need to be achieved that reflect personal performance and long-term value creation of the company. Assuming you have the right directors, this sets up a situation in which Directors are forced to engage in value creation and be rewarded for doing so, similar to private equity directors. The hurdle rate provides the incentive. The vesting hurdle should be based on the underlying performance of the company, commensurate with its risk and product cycle, possibly peer based, and not simply on riding a bull market.
The long-term performance metrics for value creation should also apply to senior management, and the board should lead by example. The vast majority of performance incentives are short-term, financial and quantitative. We know that the majority of company value however is now based on intangibles. Long-term leading indicators such as innovation, reputation, talent, resilience and sustainability are being completely overlooked in compensation design. You get what you pay for.
Management has proposed “passive” pay for directors and short-term pay for themselves. Boards have acquiesced.
Voici un article de Peter Whitehead paru dans le Financial Times du 5 juin 2013. L’auteur présente une synthèse des principales sources de risques confrontant chaque conseil d’administration. En bref, l’étude montre que les conseils d’administration sont responsables de la plupart des échecs des entreprises, notamment de ceux qui résultent en désastres majeurs.
Le rapport de la firme Reputability conclue que l’un des principaux problèmes est le manque d’information des membres des C.A. Les autres facteurs identifiés sont reliés :
– au manque de qualification (et de caractère) des membres pour comprendre les grands enjeux et les principaux risques de l’entreprise;
– au manque de sensibilité aux aspects des relations humaines, et
– à la priorité accordée aux jugements de nature quantitative.
Je vous invite donc à lire cet article en vous inscrivant gratuitement au contenu du F.T. Que pensez-vous de ces résultats ?
The root causes of most company failures lie in the boardroom, with a serious skills gap and risk blindness being the most common factors. A study of 41 corporate crises highlights repeated patterns of failure that are little understood by boards and that are rarely spotted using standard risk management techniques.
English: Enron Complex in Houston Texas (Photo credit: Wikipedia)
Executive Appointments, which is running a series of features on the topic of “Better Boards” during 2013, was given an advance briefing on the analysis by Reputability, a firm specialising in organisational and behavioural risk. Its study found a lack of skills on the board and its inability to influence executives were root causes in 88 per cent of company failures. A board’s blindness to risk was a root cause in 85 per cent of the crises. Defective information flows to and from the board, and inadequate leadership on company ethos and culture, were each root causes in 59 per cent of cases.
The Reputability research builds on a 2011 “Roads to Ruin” report by Cass Business School that carried out a detailed examination of 18 corporate crises, including the collapses of Enron and Northern Rock, and events such as the BP Texas City oil refinery explosion in 2005, and the Hatfield rail crash in 2000. It looked at the underlying causes that led to disaster and the resilience of the organisation in handling the aftermath….
… Anthony Fitzsimmons, chairman of Reputability, says: “A fundamental manifestation of the problem with boards is information. A board has information, but doesn’t know if it’s accurate or has important gaps. If you don’t have the right information how can you be in control ?
Articles d’intérêt dans le domaine de l’impact des Boards :
Vous trouverez, ci-dessous, un billet publié par Richard Leblanc* sur son blogue Governance Gateway. Il s’agit d’une proposition de changement à trois niveaux :
(1) Renforcement du rôle du C.A. en matière de création de valeur;
(2) Imputabilité de la direction envers le C.A.;
(3) Imputabilité du C.A. envers les actionnaires.
L’auteur nous demande de faire des suggestions dans le but de peaufiner un cas qu’il est en voie de réaliser. Des suggestions concernant cette liste ?
Voici un article très pertinent sur l’étude du processus d’implication (engagement) entre les actionnaires institutionnels et les conseils d’administration des sociétés cotées. L’auteur de l’article, John Mellor, est le fondateur de la Foundation for Governance Research and Education (FGRE), une OBNL dont la mission est de développer les meilleures pratiques et les plus hauts standards d’éthique dans le domaine du leadership en gouvernance.
L’article décrit très bien les caractéristiques de « l’engagement » entre les parties, montre en quoi cet engagement est important, propose une nouvelle approche pour susciter l’implication des investisseurs à long terme, et met l’accent sur les incitatifs nécessaires à adopter pour accroître l’efficacité des pratiques d’engagement.
Nous reproduisons ici la teneur de cette publication. Bonne lecture. Quelles sont vos impressions de cette approche ?
Engagement incorporating constructive and challenging dialogue, based on trust and mutual respect between institutional shareholders and company boards, should be an integral part of stewardship. However, such engagement does not apply or is not relevant to all investment funds.
Investment funds cover a range from long-only funds to shorter term, e.g. hedge funds, high frequency trading funds. Investment strategies reflect the nature of the fund and for many, engagement is not a relevant activity. This applies particularly to those with a short term investment focus. As a guide, this may be set at no more than one or, at most, two years.
Contemporary practice of engagement indicates that it falls broadly into two categories – reactive engagement and pro-active engagement:
Reactive engagement, meaning reacting to events, is the practice most commonly observed amongst institutional shareholders.
Pro-active engagement may have one or other of two objectives.
Engagement over a limited period of time with the sole objective of driving up the company share price in the short term with a view to selling out and capturing the capital gain. This is the practice most commonly employed by so-called ‘activist’ shareholders.
Engagement with the objective of company long-term value creation. This engagement is described in 1. above and, as a result of supporting the increase in company value over the long-term, aims to benefit the economy and provide sustainable returns for investors and, ultimately, savers. This engagement is, therefore, necessarily linked into a long-term investment strategy.
Effective engagement takes place in private (rather than in public) and through shareholders acting collaboratively, usually over an extended period of time.
Samsung Electronics’ 44th Annual General Shareholders’ Meeting (Photo credit: samsungtomorrow)
Why this engagement matters
It has already been stated above that engagement linked into a long-term investment strategy has implications for the economy and savers, but the crucial point must surely be that sustained economic growth and efficient allocation of capital will not happen without it. Investment in research and development and in new industries with global growth potential, which our nation requires, is dependent upon a sustained and pragmatic relationship between capital and business. This requires a long-term investment approach and constructive engagement between the parties.
Engagement and holding company boards accountable
Engagement with boards is part of the process of holding company directors accountable and, therefore, an integral part of the corporate governance framework. It is regarded as an ingredient to the maintenance of the ‘comply or explain’ regime which underpins the UK Corporate Governance Code. Important though this is, it is ancillary to the main reason explained above of why constructive engagement over the long-term matters.
The economic case for engagement
By the very nature of the engagement which is the focus of this Paper, increase in company and investment value can only be realised over the long-term. It is, therefore, not surprising that sufficient robust evidence has yet to be accumulated to make the economic case. What evidence exists relates mainly to activist investors, such as hedge funds and focus funds, with a pro-active short-term focus on driving up the share price and selling out to realise the capital gain.
A new approach to engagement for long-only investors
This Paper is focussed upon engagement which rests on constructive and challenging dialogue between institutional shareholders and company boards, with a view to building trust and mutual respect between the parties, and with the all-important purpose of enhancing and sustaining company value to benefit the economy and savers. Necessarily, this conforms to the interest of long-only investment funds, those with a long-term perspective on investment. Specifically:
A more holistic approach to engagement needs to be adopted by aligning the dialogue more closely with the duties of directors as expressed in Section 172(1) of the Companies Act 2006, which binds directors to promote the success of the company for the benefit of its members as a whole and, in particular, to have regard to likely consequences in the long-term of any decision.
In line with adoption of the more holistic approach, long-only investors should also take into account the capital structure and needs (equity and debt) of the company as a basis for engagement.
With a view to a more effective holistic approach to engagement, organisations should synchronise the engagement activities and practices of equity and debt (bond) fund managers.
Review of incentives
Without meaningful incentives the quality and effectiveness of engagement practice is unlikely to make significant progress. To counter asset owner inertia, and with a view to winning investment business, asset managers should devise attractive long-only investment products which incorporate engagement. These products would be structured based upon intrinsic rather than relative value models, and would, therefore, differentiate these providers from the present mass of asset managers whose offerings are structured based upon relative performance criteria.
The limitation of quarterly reporting (already a Government action) should aid a shift in thinking from the short to a longer term view of fund performance, which in turn should encourage a longer term perspective on the part of asset owners.
To encourage long-term holding of shares, a variety of incentives have over time been proposed, and remain under consideration with typically firm views for and against. Perhaps some form of tax incentive holds the greater promise, for example, that which distinguishes between short and long-term investment with the former attracting a higher rate of income tax and the latter a lower rate of capital gains tax.
Recommendations for next steps
Asset managers should:
Review what lessons for fund managers might be drawn from comparing the engagement practice of holders of private and public debt (bonds)
Explore the practical implications of more synchronisation between equity and debt (bonds) analysis and engagement
Review and take into account any differences in approach to engagement for different sectors, e.g. capital goods, consumer goods, utilities, resource companies, financial services
Give serious consideration, in the light of the above, to resourcing for engagement and, in particular, the level of skills required and the implications for training and development.
Business School education, particularly at post-graduate and executive levels, has a crucial role to play in changing culture and mind sets to value the importance of constructive engagement between capital and business and a long-term investment approach. Programmes and courses should be redesigned to meet the need for change.
A data bank on the performance of selected long-only funds, adopting the approach to engagement advocated above, should be constructed with a view to collecting records over a sufficiently long period of time (up to 10 years) to provide evidence to demonstrate the economic value of constructive engagement.
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* Dr John Mellor, is FGRE’s Founder and Director of Research. A former international banker with Citigroup, he has written and lectured extensively on governance. He is a former NatWest Visiting Senior Fellow in Corporate Leadership at the University of Exeter and Visiting Professor in Governance at the University of the West of England from 2003 to 2012.
Articles reliés au thème de l’engagement des investisseurs :
Voici un document émanant d’une présentation d’Yvan Allaire* à la conférence nationale de l’Institut des administrateurs de sociétés (Institute of Corporate Directors) à Toronto le 22 mai 2013 dont le thème était Shareholder Activism: Short vs. Long-termism. Dans son article, l’auteur prend une position affirmative en tentant d’expliquer les comportements court-termistes des actionnaires (investisseurs) activistes. Ce document mérite que l’on s’y penche pour réfléchir à trois questions fondamentales en gouvernance. Les questions soulevées dans le document sont les suivantes :
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Gouvernance | Jacques Grisé 