Top 10 de Harvard Law School Forum on Corporate Governance au 25 juin 2020


Conseils d’administration français | Plus de femmes, mais toujours aussi peu de jeunes


Voici un article d’intérêt pour les personnes intéressées par l’évolution en matière de gouvernance, publié sur le site de

The Conversation

Bonne lecture !

 

Conseils d’administration : plus de femmes, mais toujours aussi peu de jeunes

 

 

La diversité de genre est devenue naturelle dans les conseils d’administration du SBF 120, mais la diversité en matière d’âge reste limitée et l’ouverture des conseils d’administration aux 40 ans et moins demeure une exception (10 % des élus).

C’est ce qui ressort des statistiques établies après les assemblées générales 2020 du baromètre de la diversité dans les conseils d’administration publié chaque année depuis 2014 par Burgundy School of Business (BSB).

Une diversité de genre entrée dans les pratiques

Trois ans après la mise en place du quota de 40 % prévu par la loi Copé-Zimmermann, pratiquement la moitié des administrateurs nommés dans les sociétés françaises du SBF 120 aux AG 2020 sont en effet des femmes. Le SBF 120 est composé des 40 valeurs du CAC 40 et de 80 valeurs parmi les 200 premières capitalisations boursières françaises. Même si la proportion est moindre, les recrutements ont également été féminins pour 36 % dans les sociétés étrangères du SBF 120.

Évolution du % de femmes dans les conseils d’administration depuis la promulgation de la loi Copé-Zimmermann. baromètre BSB

La part des femmes dans les conseils d’administration se stabilise à 45,2 %.

Profils des femmes et hommes nommés en 2020 au sein des conseils d’administration. baromètre BSB

Les résultats confirment en outre la convergence des profils entre hommes et femmes que nous avions relevée en 2019. Les caractéristiques dominantes sont les mêmes chez les hommes et chez les femmes nouvellement nommés : formation en gestion (65 %), expérience de direction (directeurs, membres du comité exécutif : 66 %), expérience internationale (66 %), expérience en finance (53 %) et expérience comme administrateur(trice) d’autres sociétés cotées (60 %).

Par ailleurs, l’influence des réseaux sur le recrutement se renforce. Les administrateurs nommés aux assemblées générales de 2020 sont pour 44 % d’entre eux diplômés d’une école d’élite (contre 40 % en 2019), et 21 % ont une expérience en ministère (18 % en 2019). Après avoir connu une baisse de 2014 à 2017, les statistiques sont en augmentation pour les femmes comme pour les hommes. Les réseaux d’administrateurs sont également très influents avec 60 % des nouveaux nommés ayant ou ayant eu au moins un mandat dans une autre société cotée.

Évolution de la part des administrateurs et administratrices nouvellement nommés dont le recrutement est lié à l’influence des réseaux. baromètre BSB

Alors que les réseaux d’administrateurs étaient très masculins, ils se sont ouverts aux femmes avec la loi Copé-Zimmermann et les nouvelles administratrices sont même plus nombreuses en proportion à avoir cette expérience : 63 % contre 58 % pour les hommes.

Un âge moyen qui reste à 54 ans

 

En revanche, la diversité en matière d’âge reste limitée et l’ouverture des conseils d’administration aux 40 ans et moins reste une exception (10 % des élus).

Le code de gouvernement des entreprises cotées de l’Afep-Medef, actualisé en janvier 2020, suggère pourtant aux conseils « de s’interroger sur l’équilibre souhaitable de sa composition en matière de diversité (représentation des femmes et des hommes, nationalités, âge, qualifications et expériences professionnelles, etc.) ».

Répartition des nouveaux administrateurs (hommes et femmes) en fonction de l’âge. BSB

Plusieurs freins ont été identifiés : influence des réseaux d’administrateurs, les jeunes n’étant pas encore dans ces réseaux, crainte du manque de connaissances et d’expériences des candidats plus jeunes, d’une intégration et d’une cohésion avec le groupe qui seraient plus délicates.

Les études montrent pourtant que leurs apports pourraient être multiples : représentants d’une partie des consommateurs et au fait des enjeux de la société de demain, notamment ceux liés à la transformation numérique, ils favoriseraient l’innovation grâce à l’élargissement de la gamme des choix et des solutions lors des décisions stratégiques. La mixité d’âge faciliterait en outre la transmission de savoir entre les générations.

Peut-être faudra-t-il légiférer comme au Québec pour que le recrutement des administrateurs évolue en matière d’âge. Avec la loi 693 adoptée en 2016, les sociétés d’État québécoises devront, à compter de 2021, avoir une personne âgée de moins de 35 ans au sein de leur conseil d’administration.

D’autres pistes peuvent être suggérées pour plus de mixité d’âge : davantage informer et former aux mandats d’administrateurs dans l’enseignement supérieur, ou encore mettre en place des interfaces entre jeunes cadres et conseils d’administration telles que des plates-formes de recrutement et de candidatures.

Top 10 de Harvard Law School Forum on Corporate Governance au 4 juin 2020


Top 10 de Harvard Law School Forum on Corporate Governance au 28 mai 2020


Top 10 de Harvard Law School Forum on Corporate Governance au 21 mai 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 21 mai 2020.

Cette semaine, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Top 10 de Harvard Law School Forum on Corporate Governance au 7 mai 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 7 mai 2020.

Cette semaine, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Top 10 de Harvard Law School Forum on Corporate Governance au 16 avril 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 16 avril 2020.

Cette semaine, j’ai relevé les dix principaux billets.

Bonne lecture !

 

Dix éléments majeurs à considérer par les administrateurs en temps de COVID-19


Voici dix éléments qui doivent être pris en considération au moment où toutes les entreprises sont préoccupées par la crise du COVID-19.

Cet article très poussé a été publié sur le forum du Harvard Law School of Corporate Governance hier.

Les juristes Holly J. Gregory et Claire Holland, de la firme Sidley Austin font un tour d’horizon exhaustif des principales considérations de gouvernance auxquelles les conseils d’administration risquent d’être confrontés durant cette période d’incertitude.

Je vous souhaite bonne lecture. Vos commentaires sont appréciés.

Ten Considerations for Boards of Directors

 

Boards and Crisis Infographic

 

The 2019 novel coronavirus (COVID-19) pandemic presents complex issues for corporations and their boards of directors to navigate. This briefing is intended to provide a high-level overview of the types of issues that boards of directors of both public and private companies may find relevant to focus on in the current environment.

Corporate management bears the day-to-day responsibility for managing the corporation’s response to the pandemic. The board’s role is one of oversight, which requires monitoring management activity, assessing whether management is taking appropriate action and providing additional guidance and direction to the extent that the board determines is prudent. Staying well-informed of developments within the corporation as well as the rapidly changing situation provides the foundation for board effectiveness.

We highlight below some key areas of focus for boards as this unprecedented public health crisis and its impact on the business and economic environment rapidly evolves.

 

1. Health and Safety

 

With management, set a tone at the top through communications and policies designed to protect employee wellbeing and act responsibly to slow the spread of COVID-19. Monitor management’s efforts to support containment of COVID-19 and thereby protect the personal health and safety of employees (and their families), customers, business partners and the public at large. Consider how to mitigate the economic impact of absences due to illness as well as closures of certain operations on employees.

 

2. Operational and Risk Oversight

 

Monitor management’s efforts to identify, prioritize and manage potentially significant risks to business operations, including through more regular updates from management between regularly scheduled board meetings. Depending on the nature of the risk impact, this may be a role for the audit or risk committee or may be more appropriately undertaken by the full board. Document the board’s consideration of, and decisions regarding, COVID-19-related matters in meeting minutes. Maintain a focus on oversight of compliance risks, especially at highly regulated companies. Watch for vulnerabilities caused by the outbreak that may increase the risk of a cybersecurity breach.

 

3. Business Continuity

 

Consider whether business continuity plans are in place appropriate to the potential risks of disruption identified, including through a discussion with management of relevant contingencies, and continually reassess the adequacy of the plans in light of developments. Key issues to consider include:

  • Employee/Talent Disruption. As more employees begin working remotely or are unable to work due to disruptions caused by COVID-19, continually assess what minimum staffing levels and remote work technology will be required to maintain operations. (Also, as noted above, consider how to mitigate the economic impact of absences due to illness as well as closures of certain operations on employees.)
  • Supply Chain and Production Disruption. Review with management the risks that a disruption in the supply chain will cause interruptions in operations and how to protect against such risks, including the availability of alternate sources of supply. Ask management to assess the risks that the company will have difficulty in fulfilling its contractual obligations and how management is preparing to address those risks, including through review of relevant provisions in customer contracts (e.g., force majeure, events of default and termination) to determine what recourse is available.
  • Financial Impact and Liquidity. Review with management the near-term and longer term financial impact (including the ability to meet obligations) of the COVID-19 pandemic and the related impact of the extreme volatility in the financial markets. Understand the assumptions underlying management’s assessment and discuss the likely outcome if those assumptions prove incorrect. Consider the need to seek additional financing or amend the terms of existing debt arrangements.
  • Internal Controls and Audit Function. Consider whether COVID-19 may have an impact on the functioning of internal controls and audit. For publicly-traded companies, remember that any material changes in internal control over financial reporting will require disclosure in the next periodic report.
  • Recent Securities Exchange Commission (SEC) guidance: In a March 4, 2020 press release, SEC Chair Jay Clayton urged companies to work with their audit committees and auditors to ensure that their financial reporting, auditing and review processes are sufficiently robust to enable them to meet their obligations under the federal securities laws in the current environment.
  • Key Person Risks and Emergency Succession Plans. Consider whether an up-to-date emergency succession plan is in place that identifies a person who can step in immediately as interim CEO in the event the CEO contracts COVID-19. Consider the need to implement similar plans for other key persons.
  • Incentives. Consider whether incentive plans need to be reworked in light of the circumstances, to ensure that appropriate behaviors are encouraged. Consider delaying setting incentive plan goals until the uncertainty has subsided or try to build in flexibility with respect to any goals set.
  • Board/Governance Continuity. Consider whether the board is appropriately positioned to provide guidance and oversight as the COVID-19 threat expands. Consider scheduling in advance special board meetings and/or information conference calls over the next three to four months, which can be cancelled if not needed. Decide whether to replace in-person meetings with conference calls to help limit the threat of contagion. Consider whether contingencies are in place if a board quorum is not available. Continue to meet regularly in executive session to discuss assessment of how management is managing the crisis.

 

4. Crisis Management

 

During this turbulent time, employees, shareholders and other stakeholders will look to boards to take swift and decisive action when necessary. Consider whether an up-to-date crisis management plan is in place and effective. A well-designed plan will assist the company to react appropriately, without either under- or over-reacting. Elements of an effective crisis management plan include:

  • Cross-Functional Team. Crisis response teams typically include key individuals from management, public relations, human resources, legal and finance. Identify these individuals now and begin meeting so that they are prepared to respond quickly as the crisis develops. The team should be in regular contact with the board (or a designated board member or committee) as the COVID-19 pandemic evolves.
  • Quick and Decisive Deployment. The plan should include crisis response procedures, communications templates, checklists and manuals that can be readily adapted to a variety of situations for effective, time-critical and agile deployment. The crisis response team should be familiar with the elements of the plan and ready to implement it at a moment’s notice.
  • Contingency Plans. A crisis is inherently unpredictable. However, the company should endeavor to anticipate all potential crises to which it is vulnerable and develop contingency plans to deal with those crises to minimize on-the-fly decision-making.
  • Examples of scenarios to prepare for: What will our response be if there is a confirmed case of COVID-19 within the company? How will we notify employees of a confirmed case and what privacy implications do we need to consider? What planning (e.g., IT training) is required if we need to mandate that our employees work remotely?
  • Thoughtful Communications. The board should oversee the company’s communication strategy. Clear communication and planning within the crisis response team will allow the company to communicate internally and externally in a calm and thoughtful manner, which will help build confidence during a volatile situation.

 

5. Oversight of Public Reporting and Disclosure for Publicly-Traded Companies

 

Companies must consider whether they are making sufficient public disclosures about the actual and expected impacts of COVID-19 on their business and financial condition. The level of disclosure required will depend on many factors, such as whether a company has significant operations in China or is in a highly affected industry (e.g., airlines and hospitality companies). In any event, boards should monitor to ensure that corporate disclosures are accurate and complete and reflect the changing circumstances.

Because the COVID-19 pandemic is unprecedented and changing by the day, the SEC acknowledges that it is challenging to provide accurate information about the impact it could have on future operations.

Recent SEC guidance: “We recognize that [the current and potential effects of COVID-19] may be difficult to assess or predict with meaningful precision both generally and as an industry- or issuer-specific basis.” Statement by SEC Chairman Jay Clayton on January 30, 2020.

  • Earnings Guidance. Consider whether previously issued earnings guidance should be downgraded to reflect the actual or likely impact of COVID-19 and, if so, how to describe the reason for the revision. Due to the current unpredictability of COVID-19’s impact, consider withdrawing previously-issued earnings guidance altogether or refraining from issuing guidance in the near term.
  • Risk Factor Disclosure. Consider how the COVID-19 pandemic may require additions or revisions to risk factor disclosures.
  • Recent SEC guidance: “We also remind all companies to provide investors with insight regarding their assessment of, and plans for addressing, material risks to their business and operations resulting from the coronavirus to the fullest extent practicable to keep investors and markets informed of material developments.” SEC March 4, 2020 press release.
  • Potential topics for risk factor disclosure include:
      • Disruptions to business operations whether from travel restrictions, mandated quarantines or voluntary “social distancing” that affects employees, customers and suppliers, production delays, closures of manufacturing facilities, warehouses and logistics supply and distribution chains and staffing shortages
      • Uncertainty regarding global macroeconomic conditions, particularly the uncertainty related to the duration and impact of the COVID-19 pandemic, and related decreases in customer demand and spending
      • Credit and liquidity risk, loan defaults and covenant breaches
      • Inventory writedowns and impairment losses
      • Ensure that risk factor disclosure is consistent with the board’s conversations with management about material risks.
  • Recent SEC guidance: “One analytical tool to evaluate disclosure in this context is to consider how management discusses … risks with its board of directors. Obviously not all discussions between management and the board are appropriate for disclosure in public filings, but there should not be material gaps between how the board is briefed and how shareholders are informed.” Statement by SEC Director, Division of Corporation Finance William Hinman on March 15, 2019.
  • As always, risk factor disclosure should be specific to a company’s individual circumstances and avoid generic language. Finally, be careful not to describe a risk related to COVID-19 as hypothetical if it has actually occurred.
  • Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A). Consider whether the actual or likely impact of COVID-19 on a company’s business (including its supply chain), financial condition, liquidity, results of operations and/or prospects would be deemed material to an investment decision in the company’s securities and require disclosure. Consider whether the impact or potential impact of COVID-19 on the company is a “known trend or uncertainty” requiring disclosure in the MD&A of the next periodic report. Tailor any MD&A disclosures to the impact of COVID-19 on the company’s business in particular. Consider whether disclosures appropriately address the potential impact of the COVID-19 pandemic on future results of operations.
  • Subsequent Events. A joint statement by SEC and Public Company Accounting Oversight Board (PCAOB) leadership on February 19, 2020 specific to COVID-19 reporting considerations encouraged companies to consider the need to potentially disclose subsequent events in the notes to the financial statements in accordance with guidance included in Accounting Standards Codification 855, Subsequent Events.
  • Forward-Looking Statements. Consider whether the company’s forward-looking statement disclaimer language adequately protects the company for statements it makes regarding the expected impacts of COVID-19. It should be specific and consistent with updates made to the risk factors and other public disclosures.
  • Recent SEC guidance: “Companies providing forward-looking information in an effort to keep investors informed about material developments, including known trends or uncertainties regarding the coronavirus, can take steps to avail themselves of the safe harbor in Section 21E of the Exchange Act for this information.” SEC March 4, 2020 press release.
  • Updates. Consider whether prior disclosures should be revised to ensure they are accurate and complete. While there is no express duty to update a forward-looking statement, courts are divided as to whether a duty to update exists for a forward-looking statement that becomes inaccurate or misleading after the passage of time (from the perspective of claim under Exchange Act Section 10(b) and Rule 10b-5).
  • Recent SEC guidance: “Depending on a company’s particular circumstances, it should consider whether it may need to revisit, refresh, or update previous disclosure to the extent that the information becomes materially inaccurate.” SEC March 4, 2020 press release.
  • Proxy Statements. Given the SEC’s emphasis on discussion of how boards oversee the management of material risks, consider expanding the proxy statement disclosure of board oversight of COVID-19-related risks where material to the business. 5Recent SEC guidance: “To the extent a matter presents a material risk to a company’s business, the company’s disclosure should discuss the nature of the board’s role in overseeing the management of that risk. The Commission last noted this in the context of cybersecurity, when it stated that disclosure about a company’s risk management program and how the board engages with the company on cybersecurity risk management allows investors to better assess how the board is discharging its risk oversight function. Parallels may be drawn to other areas where companies face emerging or uncertain risks, so companies may find this guidance useful when preparing disclosures about the ways in which the board manages risks, such as those related to sustainability or other matters.” Statement by SEC Director, Division of Corporation Finance William Hinman on March 15, 2019.
  • Also, consider cautioning stockholders that the annual meeting date and logistics are subject to change.
  • Current Reports. Consider the need to file a Form 8-K for material developments such as if the CEO or another key person or a significant portion of the workforce contracts COVID-19.
  • Conditional Filing Relief. Companies that anticipate filing delays due to COVID-19 should consider taking advantage of the SEC’s March 4, 2020 order granting an additional 45 days to meet Exchange Act reporting obligations for reports due between March 1 and April 30, 2020. See the Sidley Update available here for more details.

 

6. Compliance with Insider Trading Restrictions and Regulation FD for Publicly-Traded Companies

 

  • Insider Trading. Closely monitor and consider further restricting trading in company securities by insiders who may have access to material nonpublic information related to COVID-19 impacts (e.g., by requiring additional training, imposing blackout periods or enhancing preclearance procedures).
  • Recent SEC guidance: If a company “become[s] aware of a risk related to the coronavirus that would be material to its investors, it should refrain from engaging in securities transactions with the public and … take steps to prevent directors and officers (and other corporate insiders who are aware of these matters) from initiating such transactions until investors have been appropriately informed about the risk.” SEC March 4, 2020 press release.
  • Carefully consider whether the company should potentially buy back stock to take advantage of significantly depressed stock prices.
  • Regulation FD. Be mindful of Regulation FD requirements, particularly if sharing information related to the impact of COVID-19 with customers and other stakeholders.
  • Recent SEC guidance: “When companies do disclose material information related to the impacts of the coronavirus, they are reminded to take the necessary steps to avoid selective disclosures and to disseminate such information broadly.” SEC March 4, 2020 press release.

 

7. Annual Shareholder Meeting

 

With the Center for Disease Control recommending that gatherings of 50 or more persons be avoided to assist in containment of the virus, consider with management whether to hold a virtual-only shareholders meeting or a hybrid meeting that permits both in-person and online attendance. Public companies that are considering changing the date, time and/or location of an annual meeting, including a switch from an in-person meeting to a virtual or hybrid meeting, will need to review applicable requirements under state law, stock exchange rules and the company’s charter and bylaws. Companies that change the date, time and/or location of an annual meeting should comply with the March 13, 2020 guidance issued by the Staff of the SEC’s Division of Corporation Finance and the Division of Investment Management. See the Sidley Update available here for more details.

 

8. Shareholder Relations

 

Activism and Hostile Situations. Continue to ensure communication with, and stay attuned to the concerns of, significant shareholders, while monitoring for changes in stock ownership. Capital redemptions at small- and mid-sized funds may lead to fewer shareholder activism campaigns and proxy contests in the next several months. However, expect well-capitalized activists to exploit the enhanced vulnerability of target companies. The same applies to unsolicited takeovers bids by well-capitalized strategic buyers. If they have not already done so, boards should update or activate defense preparation plans, including by identifying special proxy fight counsel, reviewing structural defenses, putting a poison pill “on the shelf” and developing a “break the glass” communications plan.

 

9. Strategic Opportunities

 

Consider with management whether and if so where opportunities are likely to emerge that are aligned with the corporation’s strategy, for example, opportunities to fulfill an unmet need occasioned by the pandemic or opportunities for growth through distressed M&A.

 

10. Aftermath

 

Consider with management whether the changes in behavior occasioned by the pandemic will have any potential lasting effects, for example on employee and consumer behavior and expectations. Also, be prepared when the crisis abates to assess the corporation’s handling of the situation and identify “lessons learned” and actionable ideas for improvement.

Guide des administrateurs 2020 | Deloitte


Le document suivant, publié par Deloitte, est une lecture fortement recommandée pour tous les administrateurs, plus particulièrement pour ceux et celles qui sont des responsabilités liées à l’évaluation de la  performance financière de l’entreprise.

Pour chacun des sujets abordés dans le document, les auteurs présentent un ensemble de questions que les administrateurs pourraient poser :

« Pour que les administrateurs puissent remplir leurs obligations en matière de présentation de l’information financière, ils doivent compter sur l’appui de la direction et poser les bonnes questions.

Dans cette publication, nous proposons des questions que les administrateurs pourraient poser à la direction concernant leurs documents financiers annuels, afin que ceux-ci fassent l’objet d’une remise en question appropriée ».

Je vous invite à prendre connaissance de cette publication en téléchargeant le guide ci-dessous.

Guide des administrateurs 2020

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Top 10 de Harvard Law School Forum on Corporate Governance au 27 février 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 27 février 2020.

Cette semaine, j’ai relevé les dix principaux billets.

Bonne lecture !

Résultat de recherche d'images pour "top 10"

Huit constats qui reflètent la mouvance de la gouvernance des sociétés


Aujourd’hui, je vous présente un article de John C. Wilcox *, président de la firme Morrow Sodali, paru sur le site du Harvard Law School Forum on Corporate Governance, qui met en lumière les grandes tendances dans la gouvernance des sociétés.

L’article a d’abord été traduit en français en utilisant Google Chrome, puis, je l’ai édité et adapté.

À la fin de 2019, un certain nombre de déclarations extraordinaires ont signalé que la gouvernance d’entreprise avait atteint un point d’inflexion. Au Royaume-Uni, la British Academy a publié Principles for Purposeful Business. Aux États-Unis, la Business Roundtable a publié sa déclaration sur la raison d’être d’une société. Et en Suisse, le Forum économique mondial a publié le Manifeste de Davos 2020.

Ces déclarations sont la résultante des grandes tendances observées en gouvernance au cours des dix dernières années. Voici huit constats qui sont le reflet de cette mouvance.

    1. Reconnaissance que les politiques environnementales, sociales et de gouvernance d’entreprise (ESG) représentent des risques et des opportunités qui ont un impact majeur sur la performance financière ;
    2. Réévaluation de la doctrine de la primauté des actionnaires et de la vision étroite des sociétés comme des machines à profit ;
    3. Adoption de la « pérennité » comme objectif stratégique pour les entreprises, antidote au court terme et voie pour renforcer la confiance du public dans les entreprises et les marchés de capitaux ;
    4. Reconnaissance que les entreprises doivent servir les intérêts de leurs « parties prenantes » ainsi que de leurs actionnaires ;
    5. Réaffirmation du principe selon lequel les entreprises doivent être responsables des conséquences humaines, sociales et de politiques publiques de leurs activités, en mettant l’accent sur la priorité à accorder aux changements climatiques ;
    6. Assertion que la culture organisationnelle est le reflet de son intégrité, de son bien-être interne, de sa pérennité et de sa réputation.
    7. Acceptation de la responsabilité élargie du conseil d’administration pour les questions concernant l’ESG, la durabilité, la finalité et la culture, ainsi que la collaboration avec le PDG pour intégrer ces facteurs dans la stratégie commerciale ;
    8. Émergence du « reporting intégré » [www.integrated reporting.org] avec son programme de réflexion intégrée et de gestion intégrée comme base du « reporting » d’entreprise

J’ai reproduit ci-dessous les points saillants de l’article de Wilcox.

Bonne lecture !

Corporate Purpose and Culture

 

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BlackRock’s Annual Letter

 

On January 14, 2020, right on cue, BlackRock Chairman and Chief Executive Larry Fink published his annual letter to corporate CEOs. This year’s letter, entitled “A Fundamental Reshaping of Finance,” is clearly intended as a wake-up call for both corporations and institutional investors. It explains what sustainability and corporate purpose mean to BlackRock and predicts that a tectonic governance shift will lead to “a fundamental reshaping of finance.” BlackRock does not mince words. The letter calls upon corporations to (1) provide “a clearer picture of how [they] are managing sustainability-related questions” and (2) explain how they serve their “full set of stakeholders.” To make sure these demands are taken seriously, the letter outlines the measures available to BlackRock if portfolio companies fall short of achieving sustainability goals: votes against management, accelerated public disclosure of voting decisions and greater involvement in collective engagement campaigns.

In setting forth its expectations for sustainability reporting by portfolio companies, BlackRock cuts through the tangle of competing standard-setters and recommends that companies utilize SASB materiality standards and TCFB climate metrics. In our view, individual companies should regard these recommendations as a starting point—not a blueprint—for their own sustainability reporting. No single analytical framework can work for the universe of companies of different sizes, in different industries, in different stages of development, in different markets. If a company determines that it needs to rely on different standards and metrics, the business and strategic reasons that justify its choices will be an effective basis for a customized sustainability report and statement of purpose.

As ESG casts such a wide net, not all variables can be studied at once to concretely conclude that all forms of ESG management demonstrably improve company performance. Ongoing research is still needed to identify the most relevant ESG factors that influence performance of individual companies in diverse industries. However, the economic relevance of ESG factors has been confirmed and is now building momentum among investors and companies alike.

Corporate Purpose

 

The immediate practical challenge facing companies and boards is how to assemble a statement of corporate purpose. What should it say? What form should it take?

In discussions with clients we are finding that a standardized approach is not the best way to answer these questions. Defining corporate purpose is not a compliance exercise. It does not lend itself to benchmarking. One size cannot fit all. No two companies have the same stakeholders, ESG policies, risk profile, value drivers, competitive position, culture, developmental history, strategic goals. These topics are endogenous and unique to individual companies. Collecting information and assembling all the elements that play a role in corporate purpose requires a deep dive into the inner workings of the company. It has to be a collaborative effort that reaches across different levels, departments and operations within the company. The goal of these efforts is to produce a customized, holistic business profile.

Other approaches that suggest a more standardized approach to corporate purpose and sustainability are also worth consideration:

  • Hermes EOS and Bob Eccles published a “Statement of Purpose Guidance Document” in August 2019. It envisions “a simple one-page declaration, issued by the company’s board of directors, that clearly articulates the company’s purpose and how to harmonize commercial success with social accountability and responsibility.”
  • CECP (Chief Executives for Corporate Purpose) has for 20 years been monitoring and scoring “best practices of companies leading in Corporate ” Many of CECP’s best practices take the form of short mission statements that do not necessarily include specific content relating to ESG issues or stakeholders. However, CECP is fully aware that times are changing. Its most recent publication, Investing in Society, acknowledges that the “stakeholder sea change in 2019 has redefined corporate purpose.”

A case can be made for combining the statement of purpose and sustainability report into a single document. Both are built on the same foundational information. Both are intended for a broad-based audience of stakeholders rather than just shareholders. Both seek to “tell the company’s story” in a holistic narrative that goes beyond traditional disclosure to reveal the business fundamentals, character and culture of the enterprise as well as its strategy and financial goals. Does it make sense in some cases for the statement of corporate purpose to be subsumed within a more comprehensive sustainability report?

Corporate Culture

 

Corporate culture, like corporate purpose, does not lend itself to a standard definition. Of the many intangible factors that are now recognized as relevant to a company’s risk profile and performance, culture is one of the most important and one of the most difficult to explain. There are, however, three proverbial certainties that have developed around corporate culture: (1) We know it when we see it -and worse, we know it most clearly when its failure leads to a crisis. (2) It is a responsibility of the board of directors, defined by their “tone at the top.” (3) It is the foundation for a company’s most precious asset, its reputation.

A recent posting on the International Corporate Governance Network web site provides a prototypical statement about corporate culture:

A healthy corporate culture attracts capital and is a key factor in investors’ decision making. The issue of corporate culture should be at the top of every board’s agenda and it is important that boards take a proactive rather than reactive approach to creating and sustaining a healthy corporate culture, necessary for long-term success.

The policies that shape corporate culture will vary for individual companies, but in every case the board of directors plays the defining role. The critical task for a “proactive” board is to establish through its policies a clear “tone at the top” and then to ensure that there is an effective program to implement, monitor and measure the impact of those policies at all levels within the company. In many cases, existing business metrics will be sufficient to monitor cultural health. Some obvious examples: employee satisfaction and retention, customer experience, safety statistics, whistle-blower complaints, legal problems, regulatory penalties, media commentary, etc. For purposes of assessing culture, these diagnostics need to be systematically reviewed and reported up to the board of directors with the same rigor as internal financial reporting.

In this emerging era of sustainability and purposeful governance, investors and other stakeholders will continue to increase their demand for greater transparency about what goes on in the boardroom and how directors fulfill their oversight responsibilities. A proactive board must also be a transparent board. The challenge for directors: How can they provide the expected level of transparency while still preserving confidentiality, collegiality, independence and a strategic working relationship with the CEO?

As boards ponder this question, they may want to consider whether the annual board evaluation can be made more useful and relevant. During its annual evaluation process, could the board not only review its governance structure and internal processes, but also examine how effectively it is fulfilling its duties with respect to sustainability, purpose, culture and stakeholder representation? Could the board establish its own KPIs on these topics and review progress annually? How much of an expanded evaluation process and its findings could the board disclose publicly?

Conclusion—A Sea Change?

 

In addition to the challenges discussed here, the evolving governance environment brings some good news for companies. First, the emphasis on ESG, sustainability, corporate purpose, culture and stakeholder interests should help to reduce reliance on external box-ticking and one-size-fits-all ESG evaluation standards. Second, the constraints on shareholder communication in a rules-based disclosure framework will be loosened as companies seek to tell their story holistically in sustainability reports and statements of purpose. Third, as the BlackRock letters make clear, institutional investors will be subject to the same pressures and scrutiny as companies with respect to their integration of ESG factors into investment decisions and accountability for supporting climate change and sustainability. Fourth, collaborative engagement, rather than confrontation and activism, will play an increasingly important role in resolving misunderstandings and disputes between companies and shareholders.

The 2020 annual meeting season will mark the beginning of a new era in governance and shareholder relations.


*John C. Wilcox is Chairman of Morrow Sodali. This post is based on a Morrow Sodali memorandum by Mr. Wilcox. Related research from the Program on Corporate Governance includes Toward Fair and Sustainable Capitalism by Leo E. Strine, Jr. (discussed on the Forum here).

Le modèle de gouvernance canadien donne la primauté aux Stakeholders | Le modèle de Wall Street donne la primauté aux actionnaires !


Shareholder Governance, “Wall Street” and the View from Canada

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The Business Roundtable, a group of executives of major corporations in the United States, recently released a statement on the purpose of a corporation that reflects a shift from shareholder primacy to a commitment to all stakeholders. While the statement seems radical to some, it is consistent with recent Canadian corporate law. Boards of directors in Canada have had to make decisions incorporating the concepts expressed in the Business Roundtable statement for over a decade.

The primary concern expressed by those opposed to a shift from shareholder primacy is that it undercuts managerial accountability, thereby resulting in increased agency costs and undermining the overall effectiveness and efficiency of corporations. The experience in Canada suggests such concerns are largely overblown.

A stakeholder-based governance model rejects the idea that corporations exist principally to serve shareholders. Instead, a stakeholder-based governance model requires the consideration of various stakeholder groups to inform directors as to what is in the best interest of the corporation.

The move to a stakeholder-based governance model is largely the result of general dissatisfaction with the shareholder primacy model, under which:

    • Management and boards felt intense pressure to focus on short-term results at the expense of long-term success;
    • Communities and workers often felt ignored or abandoned;
    • Customers felt unsatisfied with product quality and customer service;
    • And suppliers felt threatened and pressured to drive down costs, even if doing so requires reducing quality or moving offshore.

Indeed, the introduction of the statement by the Business Roundtable provides that:

Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.

Put differently, a stakeholder model reflects a rejection of the Gordon Gekko ethos from the 1987 movie “Wall Street” that “greed, for lack of a better word, is good.”

The 2008 Supreme Court of Canada decision in BCE Inc. v 1976 Debentureholders rejected Revlon duties to maximize shareholder value in connection with a change of control transaction. In its decision, the court specifically provided that “the fiduciary duty of the directors to the corporation originated in common law. It is a duty to act in the best interests of the corporation. Often the interests of shareholders and stakeholders are co-extensive with the interests of the corporation. But if they conflict, the directors’ duty is clear—it is to the corporation.”

The thinking in the BCE decision has now been reflected in Canada’s federal corporate statute, which provides that that, when acting with a view to the best interests of the corporation, directors may consider, without limitation, the interests of shareholders, employees, retirees and pensioners, creditors, consumers and governments; the environment; and the long-term interests of the corporation.

At its most basic level, the move away from shareholder primacy better reflects the history and animating principles of corporate law, which establish that a corporation is a separate legal person and its shareholders are not owners of its assets per se, but investors with certain contractual and statutory rights (including a right to elect directors and a residual claim on the assets). That distinction―that shareholders are not owners in the classic sense―is of fundamental importance and gets to the heart of corporate governance and the role of boards. Indeed, the seminal work of Berle and Means, which has influenced a generation of corporate governance scholars, is focused exactly on the separation of ownership and control.

When the BCE decision first came out in Canada some expressed concern that a focus on the corporation provides no meaningful guidance for boards of directors. That concern has not manifested itself. The experience of advising boards following BCE has not been one of confusion or uncertainty―that’s not to say decisions are easy, but well-advised boards of directors understand and act in accordance with their fiduciary duties as expressed by BCE.

It is also worth pointing out that a singular focus on shareholders does not provide clear guidance to boards of directors. In a modern public company, shareholders come and go, each with their own investment criteria and objectives.

As a practical matter, in Canada, a stakeholder model allows directors to exercise their business judgment to consider the interests of stakeholders, to the extent those directors have an informed basis for believing that doing so will contribute to the long-term success and value of the corporation. However, in the context of a change of control transaction, much of the focus rightly remains on what consideration shareholders will receive.

As long as directors fulfill their duties of loyalty and due care when considering the interests and reasonable expectations of the corporation’s stakeholders, the business judgment rule protects Canadian directors from liability. Minutes of meetings should reflect, where appropriate, that directors considered such factors as reputation of the corporation, legal and regulatory risk, investments in employees, the environment and any other matter that could affect the success or value of the corporation.

Other factors that help address concerns of those who fear a stakeholder-based governance system is that the market for corporate control remains healthy and, since Canadian securities law does not permit a “just say no” defense, the threat of an unsolicited offer being made directly to shareholders is always present. In addition, product markets and reputational pressures also provide meaningful incentives to promote responsible and disciplined management. And perhaps most important, shareholders retain their most basic and powerful right in the stakeholder model: they elect the board of directors and can change the board if they are dissatisfied with its performance.

So, to our friends in the United States, we encourage you to consider the experience here in Canada before concluding that the ideas put forth by the Business Roundtable will undermine the effectiveness of your public corporations.

Top 10 de Harvard Law School Forum on Corporate Governance au 13 février 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 13 février 2020.

Cette semaine, j’ai choisi dix billets d’intérêt. Il y a plusieurs rapports sur la gouvernance qui sont publiés en début d’année.

J’ai relevé les dix principaux billets.

Bonne lecture !

Top 10 predictions for Thailand 2020 | The Thaiger
  1. 2020 Governance Outlook
  2. Private Equity—Year in Review and 2020 Outlook
  3. Strengthening the Board’s Effectiveness in 2020: A Framework for Board Evaluations
  4. Leading Boards Rethinking Strategy and Enabling Innovation
  5. Year in Review: Delaware Corporate Law and Litigation
  6. Accelerating ESG Disclosure—World Economic Forum Task Force
  7. S&P 500 CEO Compensation Increase Trends
  8. Core Principles of Exculpation and Director Independence
  9. Let’s Get Concrete About Stakeholder Capitalism
  10. Technology and Life Science 2019 IPO Report

Top 15 de Harvard Law School Forum on Corporate Governance au 6 février 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 6 février 2020.

Cette semaine, j’ai choisi plusieurs billets d’intérêt. C’est normal, car c’est le début de l’année 2020 et il y a plusieurs rapports sur la gouvernance qui sont publiés à la fin du premier mois.

J’ai relevé les quinze principaux billets.

Bonne lecture !

Résultat de recherche d'images pour "top 15"

 

 

  1. Navigating the ESG Landscape
  2. 2019 Year-End Securities Enforcement Update
  3. IAC Recommendation Concerning SEC Guidance and Rule Proposals on Proxy Advisors and Shareholder Proposals
  4. SEC’s Office of Compliance Inspection: Examination Priorities for 2020
  5. 2020 Compensation Committee Handbook
  6. Supreme Court Is Asked to Weaken the SEC’s Ability to “Make Things Right”: Amici Curiae Brief
  7. CEO Letter to Board Members Concerning 2020 Proxy Voting Agenda
  8. White-Collar and Regulatory Enforcement: What Mattered in 2019 and What to Expect in 2020
  9. Governance of Corporate Insider Equity Trades
  10. Confidential Treatment Applications and SEC Disclosure Guidance
  11. Advance Notice Bylaw and Activists Board Nominees
  12. The Economics of Shareholder Proposal Rules
  13. ISS Comment Letter on Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice
  14. Glass Lewis Comment Letter to the SEC About Proposed Proxy Rules for Proxy Voting Advice
  15. The Economics of Regulating Proxy Advisors

 

Top 15 de Harvard Law School Forum on Corporate Governance au 30 janvier 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 30  janvier 2020.

Cette semaine, j’ai choisi plusieurs billets d’intérêt. C’est normal, car c’est le début de l’année 2020 et il y a plusieurs rapports sur la gouvernance qui sont publiés à la fin du premier mois.

J’ai relevé les quinze principaux billets.

Bonne lecture !

Image associée

 

  1. NACD Public Company Board Governance Survey
  2. Shareholder Activism in 2020: New Risks and Opportunities for Boards
  3. Making Corporate Social Responsibility Pay
  4. SEC Year-End Guidance
  5. Companies’ Anti-Fraternization Policies: Key Considerations
  6. S&P 1500 2019 Bonus Expectations and a Look to 2020
  7. Female Directors in California-Headquartered Public Companies
  8. Sustainability in the Spotlight
  9. ESG Performance and Disclosure: A Cross-Country Analysis
  10. Board Composition and Shareholder Proposals
  11. Challenging Times: The Hardening D&O Insurance Market
  12. Foundational Principles in an Evolving Governance Environment
  13. 2019 Sustainability Report
  14. Audit Committee Perspectives on Audit Quality and Assessment: A PCAOB Report
  15. 2019 Review of Shareholder Activism

 

Top 10 de Harvard Law School Forum on Corporate Governance au 16 janvier 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 16  janvier 2020.

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

Bonne lecture !

Résultats de recherche d'images pour « governance 2020 »

 

 

  1. CalSTRS Green Initiative Task Force Annual Report
  2. Bernie Ebbers and Board Oversight of the Office of Legal Affairs
  3. Delaware Appraisal Decisions
  4. Corporate Culture: Evidence from the Field
  5. Into the Mainstream: ESG at the Tipping Point
  6. Eight Priorities for Boards in 2020
  7. Startup Governance
  8. ESG Matters
  9. Corporate Law for Good People
  10. Embracing the New Paradigm
  11. A Fundamental Reshaping of Finance

 

 

Top 10 de Harvard Law School Forum on Corporate Governance au 3 janvier 2020


Voici le compte rendu hebdomadaire du forum de la Harvard Law School sur la gouvernance corporative au 3 janvier 2020.

Je profite de l’occasion pour vous souhaiter une formidable année 2020 et la mise en place de pratiques exemplaires de gouvernance.

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

Bonne lecture !

Résultats de recherche d'images pour « 2020 »

 

  1. Institutional Trading around Corporate News: Evidence from Textual Analysis
  2. Managerial Control Benefits and Takeover Market Efficiency
  3. Public Company vs. JV Governance
  4. New Considerations for Special Litigation Committees
  5. Worker Representation on U.S. Corporate Boards
  6. Board-Shareholder Engagement Practices
  7. The Plight of Women in Positions of Corporate Leadership in the United States, the European Union, and Japan: Differing Laws and Cultures, Similar Issues
  8. Institutional Investment Mandates: Anchors for Long-term Performance
  9. NYSE Proposal for Primary Direct Listings
  10. A New Dataset of Historical States of Incorporation of U.S. Stocks 1994-2019

 

En rappel | Constats sur la perte de contrôle des sociétés québécoises | Le cas de RONA


C’est avec plaisir que je partage l’opinion de Yvan Allaire, président exécutif du CA de l’IGOPP, publié le 4 novembre dans La Presse.

Ce troisième acte de la saga RONA constitue, en quelque sorte, une constatation de la dure réalité des affaires corporatives d’une société multinationale, vécue dans le contexte du marché financier québécois.

Yvan Allaire présente certains moyens à prendre afin d’éviter la perte de contrôle des fleurons québécois.

Selon l’auteur, « Il serait approprié que toutes les institutions financières canadiennes appuient ces formes de capital, en particulier les actions multivotantes, pourvu qu’elles soient bien encadrées. C’est ce que font la Caisse de dépôt, le Fonds de solidarité et les grands fonds institutionnels canadiens regroupés dans la Coalition canadienne pour la bonne gouvernance ».

Cette opinion d’Yvan Allaire est un rappel aux moyens de défense efficaces face à des possibilités de prises de contrôle hostiles.

Dans le contexte juridique et réglementaire canadien, le seul obstacle aux prises de contrôle non souhaitées provient d’une structure de capital à double classe d’actions ou toute forme de propriété (actionnaires de contrôle, protection législative) qui met la société à l’abri des pressions à court terme des actionnaires de tout acabit. Faut-il rappeler que les grandes sociétés québécoises (et canadiennes) doivent leur pérennité à des formes de capital de cette nature, tout particulièrement les actions à vote multiple ?

Bonne lecture !

RONA, LE TROISIÈME ACTE

 

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Acte I : La velléité de la société américaine Lowe’s d’acquérir RONA survenant à la veille d’une campagne électorale au Québec suscite un vif émoi et un consensus politique : il faut se donner les moyens de bloquer de telles manœuvres « hostiles ». Inquiet de cette agitation politique et sociale, Lowe’s ne dépose pas d’offre.

Acte II : Lowe’s fait une offre « généreuse » qui reçoit l’appui enthousiaste des dirigeants, membres du conseil et actionnaires de RONA, tous fortement enrichis par cette transaction. Lowe’s devient propriétaire de la société québécoise.

Acte III : Devant un aréopage politique et médiatique québécois, s’est déroulé la semaine dernière un troisième acte grinçant, bien que sans suspense, puisque prévisible dès le deuxième acte.

En effet, qui pouvait croire aux engagements solennels, voire éternels, de permanence des emplois, etc. pris par l’acquéreur Lowe’s en fin du deuxième acte ?

Cette société cotée en Bourse américaine ne peut se soustraire au seul engagement qui compte : tout faire pour maintenir et propulser le prix de son action. Il y va de la permanence des dirigeants et du quantum de leur rémunération. Toute hésitation, toute tergiversation à prendre les mesures nécessaires pour répondre aux attentes des actionnaires sera sévèrement punie.

C’est la loi implacable des marchés financiers. Quiconque est surpris des mesures prises par Lowe’s chez RONA n’a pas compris les règles de l’économie mondialisée et financiarisée. Ces règles s’appliquent également aux entreprises canadiennes lors d’acquisitions de sociétés étrangères.

On peut évidemment regretter cette tournure, pourtant prévisible, chez RONA, mais il ne sert à rien ni à personne d’invoquer de possibles représailles en catimini contre RONA.

QUE FAIRE, ALORS ?

Ce n’est pas en aval, mais en amont que l’on doit agir. Dans le contexte juridique et réglementaire canadien, le seul obstacle aux prises de contrôle non souhaitées provient d’une structure de capital à double classe d’actions ou toute forme de propriété (actionnaires de contrôle, protection législative) qui met la société à l’abri des pressions à court terme des actionnaires de tout acabit. Faut-il rappeler que les grandes sociétés québécoises (et canadiennes) doivent leur pérennité à des formes de capital de cette nature, tout particulièrement les actions à vote multiple ?

Il serait approprié que toutes les institutions financières canadiennes appuient ces formes de capital, en particulier les actions multivotantes, pourvu qu’elles soient bien encadrées. C’est ce que font la Caisse de dépôt, le Fonds de solidarité et les grands fonds institutionnels canadiens regroupés dans la Coalition canadienne pour la bonne gouvernance.

(Il est étonnant que Desjardins, quintessentielle institution québécoise, se soit dotée d’une politique selon laquelle cette institution « ne privilégie pas les actions multivotantes, qu’il s’agit d’une orientation globale qui a été mûrement réfléchie et qui s’appuie sur les travaux et analyses de différents spécialistes » ; cette politique donne à Desjardins, paraît-il, toute la souplesse requise pour évaluer les situations au cas par cas ! On est loin du soutien aux entrepreneurs auquel on se serait attendu de Desjardins.)

Mais que fait-on lorsque, comme ce fut le cas au deuxième acte de RONA, les administrateurs et les dirigeants appuient avec enthousiasme la prise de contrôle de leur société ? Alors restent les actionnaires pourtant grands gagnants en vertu des primes payées par l’acquéreur. Certains actionnaires institutionnels à mission publique, réunis en consortium, pourraient détenir suffisamment d’actions (33,3 %) pour bloquer une transaction.

Ce type de consortium informel devrait toutefois être constitué bien avant toute offre d’achat et ne porter que sur quelques sociétés d’une importance stratégique évidente pour le Québec.

Sans actionnaire de contrôle, sans protection juridique contre les prises de contrôle étrangères (comme c’est le cas pour les banques et compagnies d’assurances, les sociétés de télécommunications, de transport aérien), sans mesures pour protéger des entreprises stratégiques, il faut alors se soumettre hélas aux impératifs des marchés financiers.

Actionnaires de contrôle des entreprises | cibles des activistes


Voici un article très intéressant de Amy Freedman, Michael Fein et Ian Robertson de la firme Kingsdale Advisors, publié sur le Forum de Harvard Law School aujourd’hui.

Les auteurs expliquent très bien les situations de contrôle et de quasi-contrôle des entreprises. Ils montrent pourquoi ces entreprises sont vulnérables et comment elles constituent une cible de choix pour les activistes, qui n’hésitent pas à utiliser différents moyens pour arriver à leurs fins.

Les actionnaires minoritaires activistes cherchent à bouleverser les structures de contrôle existantes afin de diminuer le pouvoir des principaux propriétaires. Ultimement, on cherche à modifier la composition du conseil d’administration.

L’article expose différents stratagèmes pour ébranler le pouvoir des actionnaires de contrôle.

      • « Undermine the image of the current board and controlling shareholder as competent business managers
      • Identify and exploit divides between independent directors and the controlling shareholder’s representatives
      • Where familial relationships exist, seek to divide the family members or position them against other directors
      • Demonstrate unfair and abusive treatment of minority shareholders
      • Shine a spotlight on what is seen as “self-dealing” in exposing related-party transactions
      • Demonstrate a divide between top management and the average worker on pay issues
      • Illustrate divides where board and management are out of touch with other stakeholder groups beyond shareholders such as employees, unions, and the communities in which they operate
      • Inflict brand damage that will impact business relations with customers, consumers, and the general public ».

Bonne lecture !

Fall of the Ivory Tower: Controlled Companies and Shareholder Activism

 

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Despite longstanding complaints about governance and the tyranny of a few who may or may not hold a meaningful economic interest in the company they founded and/or now control, investors have continued to allocate to controlled or quasi-controlled companies. What has changed is that minority shareholders are no longer content to sit quietly and go along for the ride, increasingly demonstrating they are willing to pull on the few levers of activism and change available at these companies.

Companies that were set up to inoculate themselves from the whims of shareholders have now become targets. Even if directors aren’t at risk of losing their seats in a vote, they are at risk of losing their reputations and being embarrassed into change.

While governance concerns usually provide the thin edge of the wedge to begin the advancement of change, the underlying driver for a minority shareholder is usually a dissatisfaction with the way the controlling entity is running the business—not just in terms of current performance, but also in a lack of willingness to explore other accretive opportunities that may impact the controller’s vision for the company and status quo.

Many of today’s controlled and quasi-controlled companies found their genesis in family enterprises that grew beyond the bounds of private ownership to embrace the opportunities of external capital and diversified ownership, for better or worse.

Given strong, centralized leadership from proven entrepreneur-managers, senior management, and closely aligned directors, the boards of these companies have traditionally seen themselves as only marginally accountable to minority shareholders that held slivers of “their company.” But all of this is starting to transform as shareholders have begun testing the waters for change. The fact is, controlled companies are no longer impenetrable. But will they realize this? And if not, at what cost?

A general awareness of the tools of shareholder activism, the advent of advocacy and advisory groups who target ESG issues at public companies (especially those who are seen as governance laggards), and advancing regulations related to disclosure and transparency have created an environment where controlled companies are exposed, at least from a reputational perspective.

Activists have developed an appetite and motivation for chasing difficult targets Notably, Third Point ran a highly publicized proxy contest to replace the entire twelve-person board at Campbell Soup Company, despite the fact that heirs of the company’s founder held 41% of the shares. Third Point ultimately settled for two seats on an expanded fourteen-person board, indicating that some degree of change is possible despite daunting odds.

While it is unlikely a shareholder proposal related to something like executive pay disclosure would pass, it could serve to embarrass the company and educate the broader shareholder base and market about the actions of the current management.

So far, 2019 has seen the greatest frequency of say-on-pay proposals received by controlled issuers. Furthermore, 2019 has seen an unprecedented level of shareholder support, with an average of 24.95%, compared to 20.65% in 2017 and 17.68% in 2015, years that had comparable volumes of proposals.

How We Define Control

A controlled company is commonly defined as a corporation where more than 50% of voting power is held by a single person, entity, or group. This may be facilitated through a dual-class share structure or outright ownership of the majority of an issuer’s common shares outstanding.

A wider concept of control may also include quasi-controlled companies, wherein a stake of 20% or greater is held by a single person, entity, or group.

Both types of controlled groups are largely comprised of enterprises that were once family-operated or those that have a strategic partner with a large ownership stake. Despite partially divesting their significant ownership stakes, these families and stakeholders still maintain extraordinary influence over operating facets of these companies, from day-to-day strategy to overarching governance, largely influencing how the board is constituted, and the respective board and committee mandates.

Why Controlled Companies Are Vulnerable to Change: The Adapted Activist Playbook

Pursuing an activist course of action at controlled companies presents a unique set of challenges that often require some creativity on the part of the minority shareholder. Given the significant obstacles to immediate and meaningful change, these challenges result in what are often seen as “against all odds” campaigns.

Shareholders who target controlled companies modulate their campaigns with the understanding that it will often require a long, multi-staged process to advance change. Given that influencing meaningful change in a single instance of activism is likely impossible, from a pragmatic standpoint, controlled company activist tactics and goals differ from those of traditional activists. Tactically, activists will rely on informal avenues for change while aiming for more incremental objectives.

Absent conventional proxy fight and bargaining mechanisms—such as the threat of nominating and electing an activist director or calling a special meeting to force change—reputational damage and exposure are the primary forces that an activist at a controlled company can use to influence change. A single campaign tied to a shareholder proposal or a withhold campaign targeted at a specific director may not result in immediate substantive change, but can act as a disciplinary mechanism by publicly shaming the board, serve as a lightning rod to attract and expose broader shareholder opposition that would be useful in a future campaign, or be used as a bargaining chip or lever to obtain smaller, more gradual, changes, such as adding new, independent members to the board or adjusting executive pay to reflect market realities. Through this lens, a successful campaign may not be one that passes, just one that exposes a controlled company’s entrenchment and opens the eyes of the controlling entity.

As such, when private pressure fails, an activist’s strategy at a controlled company usually centers on exacting maximum reputational damage to force change. Such campaigns can become a significant distraction and headache for the board and management. At Kingsdale, we have observed that campaigns against controlled companies generally retain a number of common features, with the activist seeking to:

  • Undermine the image of the current board and controlling shareholder as competent business managers

  • Identify and exploit divides between independent directors and the controlling shareholder’s representatives

  • Where familial relationships exist, seek to divide the family members or position them against other directors

  • Demonstrate unfair and abusive treatment of minority shareholders

  • Shine a spotlight on what is seen as “self-dealing” in exposing related-party transactions

  • Demonstrate a divide between top management and the average worker on pay issues

  • Illustrate divides where board and management are out of touch with other stakeholder groups beyond shareholders such as employees, unions, and the communities in which they operate

  • Inflict brand damage that will impact business relations with customers, consumers, and the general public

L’activisme actionnarial | la situation en France


Voici un texte publié par le Club des juristes français portant sur l’activiste actionnarial.

Cette organisation vient de publier son rapport sur l’état des lieux de l’activisme en France. Le document est en français, ce qui améliore sensiblement la compréhension de la situation.

Après un bref historique du phénomène, les auteurs ont :

identifié les progrès souhaitables (première partie) et ils proposent plusieurs pistes d’amélioration de l’encadrement juridique ou des bonnes pratiques qui régissent l’exercice de l’engagement actionnarial des activistes (deuxième partie).

Vous trouverez ci-dessous le sommaire du rapport, suivi de la table des matières qui fait état des principales recommandations.

Bonne lecture !

ACTIVISME ACTIONNARIAL | Club des juristes français

 

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Sommaire du rapport

 

▶ L’engagement des actionnaires dans la vie de l’émetteur étant
généralement considéré par tous les acteurs du marché comme une
condition de son bon fonctionnement et encouragé comme tel par les
autorités de marché, comment pourrait-on s’étonner qu’un actionnaire
soit particulièrement actif ?

▶ L’activisme actionnarial apparaît aux États-Unis dans les années
1930. Après s’y être épanoui à partir des années 70 et 80, il s’observe
désormais partout où les actionnaires connaissent un renforcement
de leurs droits : en Italie, en Allemagne, aux Pays-Bas, au Royaume-Uni,
etc. L’intérêt pour le sujet a ainsi pris de l’ampleur en Europe, à partir des
campagnes activistes menées dans les années 2000. Davantage qu’un
mimétisme spontané des actionnaires européens, c’est une exportation
des activistes américains à laquelle on assiste. Près de la moitié des
sociétés visées en 2018 ne sont pas américaines. Il semble que
l’activisme se soit développé en cadence de, et parfois en relation avec,
la généralisation de la gestion passive de titres pour compte de tiers.
En contrepoint d’une gestion indicielle qui ne permet pas d’intervenir
de manière ciblée sur une société déterminée, l’actionnaire activiste
intervient ponctuellement et revendique une fonction d’optimisation du
fonctionnement du marché.

▶ Les fonds activistes ont connu une croissance significative, gagnant
par la même occasion en crédibilité et en force. Par exemple, les
activistes américains ont atteint 250,3 milliards de dollars d’actifs
sous gestion au deuxième trimestre de 2018 quand ils n’en avaient que
94,7 milliards au quatrième trimestre de 2010. L’activisme représente
désormais une puissance colossale avec 65 milliards de capital déployé
dans des campagnes en 2018. Les campagnes en Europe ne sont plus
occasionnelles. Avec 58 campagnes européennes en 2018, les fonds
activistes ont indéniablement intégré le paysage boursier.

▶ Désormais, l’activisme actionnarial présente une telle diversité que sa
délimitation, et par conséquent son encadrement, sont des plus ardus.
Ainsi, aucune réglementation spécifique n’est applicable aux seuls
activistes. Seul le droit commun applicable à tout investisseur permet
d’appréhender l’activiste qui se prévaut précisément des prérogatives
ordinaires de l’actionnaire. Qu’il s’agisse des questions écrites posées
en assemblée générale, de la présentation de résolutions alternatives,
de la demande d’une expertise de gestion, ou, enfin, de l’information
périodique ou permanente, l’activiste invoque ses droits de minoritaire.
Il fait toutefois un exercice de ces droits qui peut apparaître
particulièrement radical voire, selon certains, déloyal, et faire peser un
risque d’atteinte à l’intérêt social. Il peut ainsi sortir du cadre que lui
réservait le législateur en mettant parfois en difficulté la société.

▶ Logiquement, le droit commun fournit des outils pour réagir :
identification des actionnaires, déclaration de franchissement de
seuils, déclaration d’intention, déclaration d’un projet d’opération,
déclaration des transferts temporaires de titres, déclaration des
positions nettes courtes en cas de ventes à découvert, déclaration à
la Banque de France, déclaration de clauses des pactes d’actionnaires,
encadrement de la sollicitation active de mandats et transparence sur
la politique de vote des fonds d’investissement. Ce droit commun
apparaît néanmoins insuffisant au regard de la diversité des outils dont
disposent les activistes et de leur sophistication juridique.

▶ La perspective d’une régulation adaptée ou d’une amélioration des
pratiques impose de cerner au préalable ce que recouvre l’activisme
actionnarial.

▶ Une campagne activiste peut être définie comme le comportement
d’un investisseur usant des prérogatives accordées aux minoritaires
afin d’influencer la stratégie, la situation financière ou la gouvernance
de l’émetteur, par le moyen initial d’une prise de position publique.
L’activiste a un objectif déterminé qui peut varier selon les activistes
et les circonstances propres à chaque campagne. L’activisme peut
être short ou long, avec le cas échéant des objectifs strictement
économiques ou alors environnementaux et sociétaux (ESG), chaque
activiste développant des modalités d’action qui lui sont propres.
Malgré ces différences indéniables entre les types d’activisme, les
difficultés soulevées par l’activisme sont communes et justifient de
traiter de l’activisme dans son ensemble.

▶ L’activisme ne doit pas être confondu avec la prise de position ponctuelle
par un actionnaire sur un sujet particulier, lorsque son investissement
n’est pas motivé par cette seule critique. Un investisseur peut ainsi être
hostile aux droits de vote double et le faire savoir, y compris en recourant
à une sollicitation active de mandats, sans être qualifié d’activiste car la création de valeur recherchée ne repose pas exclusivement sur cette
critique. Dans le cas où le retour sur investissement attendu ne repose
que sur une stratégie de contestation, l’investisseur adopte alors une
forme d’activisme économique.

▶ D’un point de vue prospectif, la question de l’activisme actionnarial a
parfois été abordée à l’occasion de travaux portant sur d’autres sujets
de droit des sociétés ou de droit boursier. Outre les rapports élaborés
par le Club des juristes, dans le cadre de la Commission Europe et
de la Commission Dialogue administrateurs-actionnaires, l’AMF,
tout comme les législateurs français et européen ont identifié la
problématique, sans toutefois proposer, à ce jour, un régime juridique
spécifique.

▶ Alors que l’année 2018 a été qualifiée d’année record de l’activisme,
la question de la montée en puissance des activistes, en Europe et en
France, est devenue un enjeu de Place dont se sont notamment saisis
les pouvoirs publics, comme l’illustrent le lancement par l’Assemblée
nationale d’une Mission d’information sur l’activisme actionnarial et
les déclarations récentes du ministre de l’Économie et des Finances.
Les entreprises y voient un sujet sensible et se sont déjà organisées
individuellement en conséquence. L’Association française des
entreprises privées (AFEP) et Paris Europlace ont également initié des
réflexions à ce sujet.

▶ En parallèle, l’activisme actionnarial a depuis plusieurs années donné
lieu à un vif débat académique sur ses effets économiques et sociaux
sur le long terme, tant aux États-Unis qu’en France. Pour ses
partisans, l’activisme actionnarial permet à la société de créer de la
valeur actionnariale et économique sur le long terme. Pour d’autres, les éventuels effets bénéfiques sont identifiés sur le seul court-terme et les
émetteurs doivent au contraire se focaliser sur la création de valeur à
long terme en intégrant plus vigoureusement les questions sociales et
environnementales comme cela a été acté en France par la loi PACTE
à la suite du Rapport NOTAT SÉNARD et aux États-Unis par la position
récente du Business Roundtable.

▶ C’est dans ce contexte que le Club des juristes a décidé la création d’une
commission multidisciplinaire chargée de faire le point des questions
posées par l’activisme actionnarial et de proposer éventuellement
des améliorations à l’environnement juridique et aux pratiques qui le
concernent.

▶ L’objectif de la Commission n’est pas de prendre parti dans le débat
économique, politique et parfois philosophique qui oppose les partisans
et les détracteurs de l’activisme actionnarial, ni de prendre position sur
telle ou telle campagne activiste actuelle ou passée. Il s’agit plutôt
d’identifier les comportements susceptibles d’être préjudiciables à
la transparence, la loyauté et le bon fonctionnement du marché et
d’examiner, au plan juridique, l’encadrement et les bonnes pratiques qui
pourraient être appliqués aux campagnes activistes.

▶ Les travaux de la Commission du Club des juristes ont consisté à
auditionner une trentaine de parties prenantes à la problématique
de l’activisme actionnarial, représentants des émetteurs et des
investisseurs, intermédiaires de marché et des personnalités
qualifiées, afin de bénéficier de leur expérience et de recueillir leur
avis sur les pistes de droit prospectif. Les autorités compétentes ont participé aux travaux de la Commission en qualité d’observateurs et
ne sont en rien engagées par les conclusions de la Commission. Pour
compléter son analyse, une enquête a été effectuée auprès d’environ
deux cents directeurs financiers et responsables des relations avec les
investisseurs de sociétés cotées.

 

Table des matières du rapport 

PREMIÈRE PARTIE – ÉTAT DES LIEUX 

I. LA DÉFINITION DE L’ACTIVISME FACE A LA DIVERSITÉ DES ACTIVISTES

1. L’absence de définition juridique de l’activisme actionnarial
2. L’irréductible hétérogénéité de l’activisme actionnarial

II. DES COMPORTEMENTS PARFOIS DISCUTABLES

1. La construction de la position
2. Le dialogue actionnarial
3. La campagne publique
4. Le vote en assemblée générale

DEUXIÈME PARTIE – PISTES DE RÉFLEXION 

1. De nouvelles règles de transparence
2. L’encadrement du short selling
3. L’encadrement du prêt-emprunt de titres en période
d’assemblée générale
4. L’extension de la réglementation sur la sollicitation
active de mandats à la campagne activiste

II. L’AMÉLIORATION DU DIALOGUE ENTRE éMETTEURS ET INVESTISSEURS 

1. Dialogue collectif : la création d’une plateforme de dialogue
actionnarial
2. Le renforcement du dialogue actionnarial en amont
de la campagne
3. La méthode d’élaboration du code de gouvernement
d’entreprise

III. RÉFLEXIONS SUR LE RÔLE DE L’AMF ET SUR L’ESMA

1. L’intervention de l’AMF
2. Les incertitudes de la notion d’action de concert

Conclusions