Les effets dévastateurs des « Hedge Funds » | Recueil des arguments évoqués


Voici le plus récent mémo de Martin Lipton*, associé fondateur de la firme Wachtell, Lipton, Rosen & Katz, spécialisée dans les affaires de fusions et acquisition, qui présente une longue liste d’événements et de publications montrant les effets dévastateurs des attaques des fonds activistes sur l’actionnariat, les autres parties prenantes et l’économie en général.

L’auteur avance que les trois dernières années ont vu un accroissement de l’intensité des actions menées par les « Hedge Funds ».

Si l’évolution de ce débat vous intéresse et que vous croyez que les activistes de tout acabit nuisent à la saine gouvernance des grandes sociétés, vous serez certainement comblés par les arguments invoqués par une multitude d’experts, de firmes spécialisées, d’universitaires, d’autorités règlementaires, etc.

Voici l’introduction à ce court article paru hier sur le site du Harvard Law School Forum on Corporate Governance.

Vos commentaires sont appréciés. Bonne lecture !

The Threat to Shareholders and the Economy from Activist Hedge Funds

Again in 2014, as in the two previous years, there has been an increase in the number and intensity of attacks by activist hedge funds. Indeed, 2014 could well be called the “year of the wolf pack.”

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With the increase in activist hedge fund attacks, particularly those aimed at achieving an immediate increase in the market value of the target by dismembering or overleveraging, there is a growing recognition of the adverse effect of these attacks on shareholders, employees, communities and the economy.

Noted below are the most significant 2014 developments holding out a promise of turning the tide against activism and its proponents, including those in academia.

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*Martin Lipton* is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisitions and matters affecting corporate policy and strategy.

Le constat de l’incompétence de plusieurs administrateurs | HBR


Aujourd’hui, je vous propose la lecture d’un récent article, paru dans Harvard Business Review, sous la plume de Dominic Barton* et Mark Wiseman*, qui traite d’un sujet assez brûlant : l’incompétence de plusieurs conseils d’administration.

Les auteurs font le constat que, malgré les nombreuses réformes règlementaires effectuées depuis Enron, plusieurs « Boards » sont dysfonctionnels, sinon carrément incompétents !

En effet, une étude de McKinsey montre que seulement 22 % des administrateurs comprennent comment leur firme crée de la valeur; uniquement 16 % des administrateurs comprennent vraiment la dynamique de l’industrie dans laquelle leur société œuvre.

L’article avance même que l’industrie de l’activisme existe parce que les « Boards » sont inadéquatement équipés pour répondre aux intérêts des actionnaires !

Je vous invite à lire cet article provocateur. Voici un extrait de l’introduction. Qu’en pensez-vous ?

Bonne lecture !

Where Boards Fall Short

Boards aren’t working. It’s been more than a decade since the first wave of post-Enron regulatory reforms, and despite a host of guidelines from independent watchdogs such as the International Corporate Governance Network, most boards aren’t delivering on their core mission: providing strong oversight and strategic support for management’s efforts to create long-term value. This isn’t just our opinion. Directors also believe boards are falling short, our research suggests.

435A mere 34% of the 772 directors surveyed by McKinsey in 2013 agreed that the boards on which they served fully comprehended their companies’ strategies. Only 22% said their boards were completely aware of how their firms created value, and just 16% claimed that their boards had a strong understanding of the dynamics of their firms’ industries.

More recently, in March 2014, McKinsey and the Canada Pension Plan Investment Board (CPPIB) asked 604 C-suite executives and directors around the world which source of pressure was most responsible for their organizations’ overemphasis on short-term financial results and underemphasis on long-term value creation. The most frequent response, cited by 47% of those surveyed, was the company’s board. An even higher percentage (74%) of the 47 respondents who identified themselves as sitting directors on public company boards pointed the finger at themselves.

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*Dominic Barton is the global managing director of McKinsey & Company and the author of “Capitalism for the Long Term.”

*Mark Wiseman is the president and CEO of the Canada Pension Plan Investment Board.

Mieux travailler avec les CA dans le futur


Nous assistons à un intérêt accru des problématiques de gouvernance depuis les vingt dernières années.

En fait, au cours de ma carrière universitaire comme professeur de management, les notions de gouvernance étaient très peu abordées, sinon carrément ignorées.

Pourquoi ? Parce que l’on enseignait le management, c’est-à-dire la gestion, surtout la gestion stratégique, qui relevait de la haute direction; les effets de la gouvernance n’étaient perçues qu’à travers les activités de conformité des CA, de manière plutôt traditionnelle et figée; la direction des entreprises ne semblait imputable qu’envers les actionnaires, pas envers les parties prenantes ! Et les actionnaires étaient loin …

Le PDG (PCD) est nommé par le conseil d’administration, élu annuellement lors de l’assemblée des actionnaires. Celle-ci est très bien organisée car le PDG veille au grain ! 

Nos organisations étaient laissées au bon vouloir des hauts gestionnaires, sans pratiquement aucune intervention du CA.

Les choses ont changées dramatiquement depuis que les autorités règlementaires ont réaffirmé le rôle souverain des administrateurs et que les experts de la gouvernance ont mis en place des programmes de formation renouvelés et adaptés.

L’article ci-dessous, publié sur le blogue de David Doughty* traite des défis qui attendent les coaches, les mentors et les consultants appelés à travailler avec les conseils d’administration du futur.

Working with the board in the 21st century

 working with the board

Qu’est-ce que l’investissement socialement responsable ?


Vous trouverez, ci-dessous, une référence à un article publié par Merryn Somerset Webb* dans le Financial Times qui montre qu’il n’est pas facile de saisir la notion d’investissement dans une entreprise socialement responsable. 

Comment identifier des organisations qui sont véritablement socialement responsables, qui gèrent en fonction du long terme, et qui procurent des biens et services utiles à la société ?

Quelle est votre définition d’un fond d’investissement constitué d’entreprises socialement responsables ?

Rien n’est évident dans ce domaine…

L’auteur nous présente son point de vue sur le sujet. Bonne lecture !

So what exactly is social enterprise investing ?

I went to speak at an event on social enterprise last week for a very nice organisation called LaunchMe. My brief was pretty simple. I was to speak for 10-15 minutes on the nature of social enterprise and then I was to interview TV celebrity Carol Smillie about her newish company Diary Dolls, which sells rather marvellous pants made at a manufacturing plant in Scotland that is a social enterprise.

Now what could be easier than that? Nothing – as long as you know what a social enterprise is. When I sat down to think about the matter, I realised I did not. Luckily, I have a pretty good contacts book. What, I asked them, is a social enterprise? Answers came there plenty, definitive answers came there none. Beyond the idea that it was a business – or sort of a business – that in some way did good, no one could really answer the question.

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Can a social enterprise make a profit? Even at the dinner itself, one person told me yes and one person told me no. If it makes a profit does it have to give some away? Or is it not the profit but the nature of the business that makes it a social enterprise? If you employ homeless people but pay them the minimum wage and keep the profits in their entirety, are you a social enterprise? Or do you have to overpay the staff and donate to Shelter too? You get the idea. This is very tricky ground.

Everyone wants capitalism to make more people better off than not, for companies to act in the interest of society as a whole as well as for their shareholders. You’ve read this hundreds of times. But what is good and what is bad? I don’t often write about ethical funds on the basis that the lines are all far too blurred. If you are going to invest with ethics in mind you have to choose someone’s ethics to work with.

Take defence companies. They might be bad when their products are used in wars of which you disapprove – but what if you were to need defending very badly? Would you withhold your capital then? And what of tobacco companies? I think they are bad. But what if paying my grandmother’s care home fees rested on the need for high dividends sustainable over the medium term? I wonder if I might be budged from my position then. And what about companies that aren’t explicitly out to do good, but do it along the way?

I went to meet Will Smith, manager of the City Natural Resources High Yield Trust earlier in the week. His fund holds all sorts of companies I would imagine ethical investors wouldn’t fancy much. But he also told me about a recent investment in a small UK-listed firm called Plant Impact, which develops products that help to enhance the eventual yield from seeds. Higher yields mean a greater supply of food to the market, lower prices and then, presumably, fewer hungry people. Does that make Plant Impact a social impact business? It might even make City Natural Resources HYT a partial impact fund.

Moving away from the absolutely bad or not, there are companies that you could argue should get marks for improvement. If big oil invests a lot in renewable energy does that make them bad for being involved in fossil fuels – or good for pouring capital the rest of us don’t have into a greener future? Then there is Coca-Cola. Sure, it is peddling poison to the masses. But it has also been spending huge amounts of time and effort on useful things such as cutting its water usage (vital in much of the world these days). That’s a social good. Sort of.

You can see the problem. Once you start down the path of trying to be a morally superior investor, you are always a hypocrite– Merryn Somerset Webb

If you are going to choose ethics you might want to take religious fuzziness into account. If Islamic finance forbids interest payments, but there are very few listed companies that have no debt and do not pay or receive interest, is an Islamic finance compliant equity fund an oxymoron? Or not?

You can see the problem. Once you start down the path of trying to be a morally superior investor, you are always a hypocrite. Which is why you don’t read about this stuff much in this column.

However, there is a problem with my persistent refusal to engage with this attempt to make capitalism friendlier. It leaves me with a nagging sense that I could do a little better. I am, for example, a long-term fan of passive investing. But as First State’s David Gait pointed out to me this week, if we simply throw our money into the market to be invested in the stocks of every company in any index we are obviously neglecting our duty to society. There are some genuinely awful companies out there and if we don’t discriminate between the good and the bad how can we hope to encourage the bad to be better?

Mr Gait runs a group of what First State calls sustainability funds. The approach in these is not about red lines on good and bad, but about investing in companies that have the good governance, social and environmental polices in place to keep operating and paying good dividends to shareholders for decades to come. He wouldn’t buy Coca-Cola or tobacco companies, not because they are evil but because consumer habits (and legislation) are likely to mean their businesses aren’t sustainable in their current forms over the long term.

That seems entirely reasonable. But think about it a bit and you will see that it brings us right back to our usual mantra on investing: buy long-term growth at the right price.

Mr Gait phrases it well and First State practises what it preaches with exceptional skill, but what they are peddling is simply what should be recognised by everyone as good practice, long-term investing with a happy label. Nothing wrong with that. But it does suggest that investing in a way that is right for society is probably a matter of finding a good long-term, long-only fund run by an intelligent and trustworthy manager.

If he really is investing for the long term he will be automatically investing in sustainability. Mr Gait’s Worldwise Sustainability Fund is as good a place to start as any. The only caveat? I think it might be part of my own duty to society to point out that almost all stocks and markets are overvalued at the moment, so whatever you buy comes with more risk than usual.

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*Merryn Somerset Webb is editor-in-chief of MoneyWeek.

Peut-on évaluer la valeur d’une organisation en se fiant uniquement au prix de ses actions ?


Voici un article très intéressant qui montre qu’on ne peut pas évaluer une entreprise uniquement en prenant en compte la valeur de ses actions, au moment présent.

Cet article publié par John Rekenthaler*, et paru sur le site de Morningstar.com, montre que l’actionnaire n’est pas le seul maître à bord et que les dirigeants doivent considérer plusieurs autres parties prenantes dans l’établissement de la valeur d’une organisation. La société civile doit aussi se rallier à cette idée.

Les arguments développés dans cet article indiquent que la contre-attaque des tenants de la bonne gouvernance est en marche … et qu’ils auront probablement gain de cause !

Je vous invite à lire l’extrait ci-dessous et à consulter l’article pour plus de détails.

Qu’en pensez-vous ? Bonne lecture !

The Attack on Shareholder Value

The Markets Say …

Another way of viewing the matter is to compare the results of the U.S. stock market with those of the major European marketplaces. As previously mentioned, shareholder-value theory has been most influential in the U.S., somewhat less so in the United Kingdom, and largely ignored in continental Europe. Can this pattern be seen in the 30-year market returns? Apparently not…

 Over the past two years, the barrage has intensified. Both The Wall Street Journal and The New York Times have published articles criticizing shareholder value, the Times on multiple occasions. The discussion has gone thoroughly mainstream.

It also is making its way into money-management circles–an audience that historically has been among the strongest supporters of shareholder value. Earlier this month, James Montier of GMO published a white paper calling shareholder value “the world’s dumbest idea. » He assembles several charts in support of his contention that the practice damages the long term by overemphasizing the short term. Montier’s recommendation is the same as Stout’s: acknowledging that companies have multiple constituencies.

Summary

Two questions: Will the backlash strengthen and, if so, what might that mean for investors?

For the first question, a tentative yes. The current orthodoxy has been in place for several decades. While it has not been proved wrong, neither has it made a convincing case for itself. Yes, many particularly slow-growing and asset-rich companies have been transformed through the notion of shareholder value–often with excellent benefits for stock owners (although not necessarily for those companies’ employees). But it’s not clear that the typical firm has fared better by having its managers constantly measured by stock-market returns. Thus, the questions will continue.

As for the second question, I suspect the answer is « not much in aggregate. » Some companies likely will perform less well, as their managements relax when not having their feet held to the fire. Others likely will meet Montier’s expectations by improving their prospects through increased investment, as managements will be willing to take more chances on long-term investments. Overall, then, I would expect that a change in the shareholder-value mind-set would not much affect U.S. stock-market averages.

It is possible, however, that it might improve the prospects of active mutual fund managers. If corporate managers are afforded more freedom to reward (and hire) employees, increase capital investment, and/or purchase more businesses, then they have more rope with which to either create something of value or hang themselves. Perhaps the astute fund manager will be able to distinguish between the bad and good corporate managements.

Perhaps. It’s only a wink of hope, but after the annus horribilis for active managers that was 2014, a wink is as good as a nod.

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*John Rekenthaler has been researching the fund industry since 1988. He is now a columnist for Morningstar.com and a member of Morningstar’s investment research department.

Supervision accrue des firmes de conseil en vote


Quelles sont les dispositions règlementaires susceptibles de s’appliquer aux firmes de conseil spécialisées en matière de votation en 2015 ?

Comme on le sait, le marché est actuellement dominé par deux grands joueurs : (1) Institutional Shareholder Services (ISS) et (2) Glass Lewis & Co. Les recommandations de ces organisations influencent grandement le comportement des actionnaires activistes et le processus de votation lors des assemblées annuelles, notamment le comportement des investisseurs institutionnels qui se fient souvent aveuglément sur les avis de ces firmes conseil, négligeant ainsi leur rôle de fiduciaire. 

249Plusieurs représentants de la communauté des affaires dont le commissaire de la Securities and Exchange Commission (SEC), Daniel M. Gallagher, s’inquiètent du manque de transparence de ces entreprises, de l’absence de mécanismes de reddition de compte et de la présence potentielle de conflits d’intérêts.

En 2015, ces firmes feront l’objet d’une supervision accrue de la SEC et, possiblement, de la mise en place d’un code de conduite prévoyant la divulgation des méthodologies utilisées. Les préoccupations relatives aux pratiques de ces firmes sont sensiblement les mêmes aux É.U., au Canada et en Europe.

Pour en savoir plus sur les actions de l’AMF, je vous invite à consulter l’Avis 25-201 relatif aux indications à l’intention des agences de conseil en vote. Vous pouvez également consulter la présentation de l’IGOPP en réponse à l’appel de commentaires sur le projet d’avis relatif aux indications à l’intention des agences de conseil en vote.

Je vous invite aussi à lire l’article ci-dessous publié par David A. Katz, associé de la firme Wachtell, Lipton, Rosen & Katz, spécialisée dans le domaine des fusions et acquisitions, et paru sur le forum de la Harvard Law School.

Voici un bref extrait de la conclusion de l’article. Bonne lecture ! Vos commentaires sont les bienvenus.

Important Proxy Advisor Developments

At best, proxy advisors play an important role in making investment managers more informed, efficient stewards of their clients’ proxy voting. However, their influence has become so significant that it is crucial that their recommendations be as worthwhile, transparent, and objective as possible. As the focus shifts to the 2015 proxy season, companies should be mindful of the SEC’s increased scrutiny of investment advisers’ voting and use of proxy advisory firms. Corporate issuers can and should be proactive in obtaining and reviewing proxy voting reports relating to the company and promptly requesting any needed corrections of incorrect information. In cases of material misstatements or confusion created by the proxy voting reports, companies may wish to add their own corrections to their proxy materials or other shareholder communications. Companies should, as always, continue to engage directly with their large shareholders and make the case for supporting the recommendations of the board. Healthy communication with issuers will help enable institutional investors to make their own independent, informed decisions about voting matters.

A separate issue that has not been widely discussed is whether the proxy advisory firms should be required to make their reports public, since they influence such a large segment of the voting population. Although the proxy advisory firms currently are not required to publicly file their reports, if the goal is increased transparency, perhaps this should change. As the SEC monitors the proxy advisory firms in the coming months, appropriate consideration should be given to modernizing the antiquated proxy voting system and determining what additional steps, if any, should be taken to regulate these firms and their influence on public companies.

Companies concerned about the undue influence of proxy advisors have an engaged advocate in Commissioner Gallagher, and momentum may be building, both in the United States and abroad, toward further reform in this area. The upcoming proxy season will be a key time for the SEC to observe any ramifications of SLB 20 and to consider next steps. Fundamentally, the SEC has, with SLB 20, reminded investment managers that their fiduciary duties are incompatible with inattentive overreliance on proxy advisors. It remains to be seen what effect the new guidance will have, but if it proves to be effective, it may herald a new era of decreasing relevance for proxy advisory firms.

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* David A. Katz is a partner at Wachtell, Lipton, Rosen & Katz specializing in the areas of mergers and acquisitions and complex securities transactions. The following post is based on an article by Mr. Katz and Laura A. McIntosh that first appeared in the New York Law Journal; the full article, including footnotes, is available here.

Une revue du blogue en 2014


Voici le rapport annuel du blogue préparé par The WordPress.com

Bonne lecture. Bonne année 2015 !

Voici un extrait du rapport annuel.

The concert hall at the Sydney Opera House holds 2,700 people.

This blog was viewed about 51,000 times in 2014.

If it were a concert at Sydney Opera House, it would take about 19 sold-out performances for that many people to see it.

Cliquez ici pour voir le rapport complet

Le cas du transfert de l’entreprise familiale Heineken


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

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

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

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

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

 

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

 

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

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

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

CHOOSE ONE.

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

TEST THE CHILDREN.

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

PICK STRONG ADVISERS.

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

HOLD ON.

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

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


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

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

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

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

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

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

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

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

 

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

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

IMG_20141211_183948

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

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

WSJ: How do you answer those questions?

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

WSJ: What is learning agility?

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

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

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

WSJ: Where are they investing poorly in talent?

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

WSJ: Why aren’t CEOs focused on turnover?

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

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

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

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

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

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

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

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

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

Les 10 plus importantes préoccupations des C.A. en 2015


En cette veille de Noël, voici un article de Kerry E. Berchem*, paru aujourd’hui dans le Harvard Law School Forum, qui présente une liste détaillée des 10 plus importantes préoccupations des conseils d’administration en 2015.

Cet excellent article devrait intéresser tous les membres de C.A., notamment le président du conseil et les présidents des comités du conseil. Même si l’article peut vous paraître assez dense, je crois qu’il fait vraiment le tour de la question.

Vous trouverez, ci-dessous, les sujets chauds à considérer par les C.A. en 2015.

Bonne lecture !

Les 10 plus importantes préoccupations des C.A. en 2015

1. Oversee strategic planning in the face of uneven economic growth and rising geopolitical tensions

2. Oversee cybersecurity as hackers seek to infiltrate even the most sophisticated information security systemsIMG_20141210_193400

3. Assess the impact of advances in technology and big data on the company’s business plans

4. Cultivate shareholder relations and assess company vulnerabilities as activist investors target more companies

5. Consider the impact of M&A opportunities

6. Oversee risk management as newer and more complex risks emerge

7. Ensure appropriate board composition in light of increasing focus on diversity, director tenure and board size

8. Explore new trends in reducing corporate health care costs

9. Set appropriate executive compensation

10. Ensure the company has a robust compliance program as the SEC steps up its enforcement efforts and whistleblowers earn huge bounties.

…….

In light of these developments, it is critical for companies to have comprehensive and effective compliance programs in place, including a transparent process for internal investigations. Companies should also review and update as necessary their anti-retaliation policies and procedures and make sure employees and executives at every level are sufficiently trained in this area.

The complete publication, including footnotes, is available here.

_______________________________________________

* Kerry E. Berchem, associé et co-responsable des pratiques de gouvernance de la firme Akin Gump Strauss Hauer & Feld LLP.

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


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

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

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

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

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

3. Les responsabilités relationnelles des administrateurs;

4. Les responsabilités relationnelles partagées.

Bonne lecture !

Essential Elements of an Effective CEO-Board Relationship

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

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

……

Conclusion

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

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

Une approche équilibrée à la rémunération des hauts dirigeants


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

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

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

2. Divulguez vos critères de choix;

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

Bonne lecture ! Vos commentaires sont les bienvenus.

Executive Compensation Benchmarking: 3 Best Practices

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

When you’re dealing with compensation at the executive level, the stakes become higher and the compensation package more nuanced, which means the process of comparison becomes more complex.023

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

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

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

1. Focus on authentic peer comparisons

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

2. Don’t dodge disclosure

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

3. Bring up performance

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

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


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

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

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

La plupart des organisations sont de très petites tailles;

Le défi de la gestion des bénévoles est très grand;

Les locaux et les équipements sont souvent peu attrayants;

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

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

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

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

Voici un extrait de l’article. Bonne lecture !

Dysfunction in the Nonprofit Sector—Reality or Myth ?

IMG_20141210_153507
Solomon R. Guggenheim Museum 1071 Fifth Avenue (at 89th Street) New York, NY

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

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

What characteristics color these perceptions?

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

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

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

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

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

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

What can be done?

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

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

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

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

 

Les fonds activistes créent-ils vraiment de la valeur à long terme pour la société ?


Vous trouverez ci-dessous un hyperlien menant au document qu’Yvan Allaire a présenté au Conference Board de New-York.

Voici donc la position adoptée par l’IGOPP eu égard au phénomène de l’activisme, des prises de contrôle hostile et de la création de valeur à long terme pour la société.

Je vous invite à télécharger le document Power Point au bas de la page. Vos commentaires sont les bienvenus.

Do activist hedge funds create long-term value for companies?

Le 14 novembre 2014, le président exécutif du conseil d’administration de l’IGOPP, le professeur Yvan Allaire fut conférencier-principal « keynote speaker » à la rencontre annuelle du Governance Center- Conference Board of New-York dont les membres sont tirés des plus grandes sociétés américaines.IMG_20141211_103437

La présentation portait sur le thème: Do activist hedge funds create long-term value for companies?

Le professeur Allaire a  pris part à un panel auquel participaient:

– Abe Friedman, Managing Partner, Camberview Partners, LLC

– Roy J. Katzovicz, Partner, Investment Team Member and Chief Legal Officer of Pershing Square Capital Management, L.P.

– Modérateur : Charles Nathan, Senior Advisor, Finsbury

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


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

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

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

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

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

Bonne lecture !

 Executive Compensation in Controlled Companies

More than a decade ago, Professors Lucian Bebchuk and Jesse Fried published the seminal work on the role and significance of managerial power theory in executive compensation. Their work cultivated a vivid debate on executive compensation in companies with dispersed ownership. The discourse on the optimality of executive pay in controlled companies, however, has been more monolithic. Conventional wisdom among corporate law theorists has long suggested that the presence of a controlling shareholder should alleviate the problem of managerial opportunism because such a controller has both the power and incentives to curb excessive executive pay.IMG_20141210_201151

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

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

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

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

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

The full paper is available for download here.

Bulletin du Collège des administrateurs de sociétés (CAS) | Décembre 2014


Vous trouverez, ci-dessous, le Bulletin du Collège des administrateurs de sociétés (CAS) du mois de décembre 2014.

Le programme de certification universitaire en gouvernance de sociétés est le seul programme universitaire offert au Québec. Il s’adresse aux administrateurs siégeant à un conseil d’administration et disposant d’une expérience pertinente.

Les administrateurs de sociétés certifiés (ASC) sont regroupés dans la Banque des Administrateurs de sociétés certifiés (ASC) , un outil de recherche en ligne mis au point par le Collège, afin de faciliter le recrutement d’administrateurs sur les conseils d’administration.

Collège des administrateurs de sociétés

Bulletin du Collège des administraters de sociétés (CAS) | Décembre 2014

GRANDE CONFÉRENCE EN GOUVERNANCE DE SOCIÉTÉS 

 

Le Collège des administrateurs de sociétés présentera sa Grande conférence annuelle en gouvernance de sociétés le mardi 27 janvier 2015, de 17 h à 21 h, au Parquet du Centre CDP Capital.

M. Jean-René HaldeM. Jean-René Halde, président et chef de la direction de la Banque de développement du Canada, agira à titre de conférencier lors de cette soirée et y partagera ses réflexions sur la gouvernance.

Cette soirée marquera aussi le 10e anniversaire du Collège et un hommage sera rendu à des partenaires pour leur engagement exceptionnel depuis sa création. Un cocktail dînatoire suivra la conférence.

Inscription et déroulement [+]
Réserver rapidement, places limitées.

Le Collège offrira gracieusement le service d’autocar faisant l’aller-retour à partir du campus de l’Université Laval..

 

UN 33E GROUPE DE FINISSANTS À LA CERTIFICATION

 

Le 22 novembre 2014, le 33e groupe de finissants du Collège, composé de 16 participants, complétait le programme de certification universitaire en gouvernance de sociétés. Ces 16 finissants seront invités à l’examen du 28 février 2015, dernière étape avant d’obtenir la désignation d’Administrateur de sociétés certifié (ASC), désignation réservée aux diplômés du Collège et reconnue à l’échelle canadienne et en France.

Tous les ASC sont regroupés dans la Banque des ASC et celle-ci est dotée d’un outil de recherche en ligne mis au point par le Collège afin de faciliter le recrutement d’administrateurs sur les conseils d’administration. Seul programme de certification universitaire en gouvernance de sociétés offert au Québec, il s’adresse aux administrateurs siégeant à un conseil d’administration et disposant d’une expérience pertinente.

Finissants du module 5 de la certification universitaire en gouvernance de sociétés - novembre 2014
De gauche à droite, finissants du haut : Pierre Plamondon, vice-président des finances et chef de la direction financière, EXFO inc., Hugo St-Laurent, président et chef de la direction, Silicycle, Martine Rozon, directrice finances, administration, Productions Juste pour rire, Paul Beaudry, consultant, Charlotte Poirier, directrice générale, direction générale de l’administration, ministère de l’Immigration et des Communautés culturelles du Québec, Jacques-A. Chauvette, directeur, production, Des Cascades, Hydro-Québec, Julie Blackburn, secrétaire associée aux marchés publics, Secrétariat du Conseil du trésor , Jean-Paul Sabini, président et chef de la direction, Asturia Technologies inc., Jan Lembregts, gestionnaire professionnel, Normand Légaré, sous-ministre adjoint aux infrastructures, aux ressources informationnelles et aux relations de travail, ministère de l’Enseignement supérieur, de la Recherche, de la Science et de la Technologie. De gauche à droite, finissants du bas : Richard de La Fontaine, administrateur et directeur des finances, Groupe de La Fontaine, Gyslaine Desrosiers, présidente du conseil, Secrétariat international des infirmières et infirmiers de l’espace francophone (SIDIIEF), Benoît de Villiers, président-directeur général, RECYC-QUÉBEC, Isabelle Gratton, présidente, PMT, Claude Lachance, directeur principal, administration, Les Ponts Jacques Cartier et Champlain Incorporée, Édith Lapointe, secrétaire associée, Sous-secrétariat à la négociation, Secrétariat du Conseil du trésor.

 

LES FORMATIONS DU COLLÈGE ET LES ÉVÉNEMENTS EN GOUVERNANCE AUXQUELS LE CAS EST ASSOCIÉ

 

Certification – Module 1 : Les rôles et responsabilités des administrateurs | 12, 13 et 14 février 2015, à Québec |  26, 27 et 28 mars 2015, à Montréal

Gouvernance des PME | 24 et 25 février 2015, à Montréal

Gouvernance des OBNL | 13 et 14 mars 2015, à Montréal |24 et 25 avril 2015, à Québec

Gouvernance des services financiers | 21 et 22 avril 2015, à Montréal

Gouvernance et leadership à la présidence | 19 et 20 mai 2015, à Montréal

Petit-déjeuner conférence de l’IAS, section du Québec sur « Quelles sont les attentes des investisseurs institutionnels en 2015 » | 21 janvier 2015, à Montréal

Forum OBNL, présenté par l’IAS, section du Québec | 4 février 2015, à Montréal

Congrès de l’Ordre des ADMA sur les changements sociaux et organisationnels | 5 et 6 février 2015, à Montréal

 

NOMINATIONS ET DISTINCTIONS ASC

 

Michel Lamontagne, ASC | Fondation de l’Ordre des infirmières et infirmiers du Québec

Claude Blouin, ASC | Commission de la construction du Québec

Normand Cadieux, ASC | Canadian Pharmacists Association

Nicole D. Gélinas, ASC | Administration portuaire de Trois-Rivières

Maryse Lassonde, participante à la certification | Lauréate Le Soleil – Radio-Canada

Diane Jean, ASC | Prix hommage 2014 de l’Institut d’administration publique de Québec

Julie Chaurette, ASC | Prix Excellence CPA – Engagement social

Michel Samson, formateur au CAS | Prix Excellence CPA – Secteur public

Zhan Su, formateur au CAS | Prix Carrière en enseignement de l’Université Laval

 

 RETOUR SUR LES FORMATIONS SUR MESURE DE L’AUTOMNE

 

Alliance des caisses populaires de l’Ontario

Le Collège est retourné cet automne dispenser six cours auprès de 100 administrateurs et dirigeants de l’Alliance des caisses populaires de l’Ontario, cette fois sur la gestion intégrée des risques et le rôle du comité d’audit. L’Alliance veut ainsi supporter son réseau dans le renforcement de sa gouvernance.

Mouvement Desjardins

Le Collège a poursuivi la formation des présidents des caisses du Mouvement Desjardins. Cet automne, 56 présidents ont eu l’occasion de participer au cours Leadership Président. Au total, plus de 400 administrateurs seront invités à participer à ce programme offert par l’Institut coopératif Desjardins.

Formation de la relève

Pour une nouvelle saison, le Collège a collaboré avec la Jeune chambre de commerce de Montréal et le Regroupement des jeunes chambres de commerce du Québec afin d’offrir un séminaire d’une quinzaine d’heures sur le rôle des administrateurs, notamment auprès des conseils d’administration d’OBNL, à près de 90 jeunes administrateurs de moins de 40 ans intéressés à s’impliquer davantage dans la société. La Conférence régionale des élus de Montréal a, de nouveau, généreusement supporté cette initiative.

 

BOÎTE À OUTILS DES ADMINISTRATEURS 

 

Nouvelle référence mensuelle en gouvernance : Rapport de Davies 2014 sur la gouvernance.

Top 5 des billets les plus consultés au mois de novembre du blogue Gouvernance | Jacques Grisé.

Bonne lecture !

____________________________________________

Collège des administrateurs de sociétés (CAS)

Faculté des sciences de l’administration Pavillon Palasis-Prince

2325, rue de la Terrasse, Université Laval Québec (Québec) G1V 0A6

418 656-2630; 418 656-2624

info@cas.ulaval.ca

 

Rôles du comité exécutif versus rôles du conseil d’administration*


Voici une discussion très intéressante paru sur le groupe de discussion LinkedIn Board of Directors Society, et initiée par Jean-François Denault, concernant la nécessité de faire appel à un comité exécutif.

Je vous invite à lire les commentaires présentés sur le fil de discussion du groupe afin de vous former une opinion.

Personnellement, je crois que le comité exécutif est beaucoup trop souvent impliqué dans des activités de nature managériale.

Dans plusieurs cas, le CA pourrait s’en passer et reprendre l’initiative !

Qu’en pensez-vous ?

____________________________________________________

 

La situation exposée par  est la suivante (en anglais) :

I’m looking for feedback for a situation I encountered.
I am a board member for a non-profit. Some of us learned of an issue, and we brought it up at the last meeting for an update.IMG_20141013_145537
We were told that it was being handled by the Executive Committee, and would not be brought up in board meetings.
It is my understanding that the executive committee’s role is not to take issues upon themselves, but to act in interim of board meetings. It should not be discussing issues independently from the board.
Am I correct in thinking this? Should all issues be brought up to the board, or can the executive committee handle situations that it qualifies as « sensitive »?

 

The Role of the Executive Committee versus the main board of directors

Alan Kershaw

Chair of Regulatory Board

Depends whether it’s an operational matter I guess – e.g. a staffing issue below CEO/Director level. If it’s a matter of policy or strategy, or impacts on them, then the Board is entitled to be kept informed, surely, and to consider the matter itself. 

 

John Dinner

John T,  Dinner Board Governance Services

Helping boards improve their performance and contributionI’ll respond a bit more broadly, Jean-François. While I am not opposed to the use of executive committees, a red flag often goes up when I conduct a governance review for clients and review their EC mandate and practices. There is a slippery slope where such committees find themselves assuming more accountability for the board’s work over time. Two classes of directors often form unintentionally as a result. Your situation is an example where the executive committee has usurped the board’s final authority. While I don’t recommend one approach, my inclination is to suggest that boards try to function without an executive committee because of the frequency that situations similar to the one you describe arise at boards where such committees play an active role. There are pros and cons, of course, for having these committees, but I believe the associated risk often warrants reconsideration of their real value and need.

 

Chuck Molina

Chief Technology Officer at DHI

I currently sit on the EC and have been in that role with other boards. Although I can see the EC working on projects as a subset of the board we Always go back to the full board and disclose those projects and will take items to the full board for approval. The board as a whole is accountable for decisions! There has to be transparency on the board! I found this article for you. http://www.help4nonprofits.com/BrainTeaser/BrainTeaser-Role_of_Executive_Committee.htm , which concurs to John’s comment. If used correctly the EC or a subset of the board can work on board issues more efficiently then venting through the full board, but they should always go back to the Full board for consideration or approval.  

 

Dave Chapman

CHM and CEO of NorthPoint ERM

I have experienced couple of EB’s and unless the company is in deep financial or legal trouble for the most part the took away from the main board and in the whole worked ok but not great. If the board has over 10 to 15 board members it is almost a requirement but the board them is there for optics more than or effective and efficient decision making

James Clouser

Experienced CEO & Board member of Domestic and European companies.

I think Mr. Dinner, Mr. Molina, and Mr. Chapman summed it up beautifully:
– You cannot have two classes of Directors
– You have to have transparency and every Board member is entitled to the same information
– A Board of 10-15 members is inefficient and may need committees, but that does not change the fact that all Board members are entitled to have input into anything that the Board decides as a body.
– An Executive Committee is a sub-committee of the entire Board, not an independent body with extraordinary powers.

 

Al Errington

Entrepreneur & Governance Advocate

I agree with John, executive committees tend to be a slippery slope to bad governance. The board of directors has the responsibility of direction and oversight of the business or organization. If anything goes substantially wrong, the board of directors will also be accountable, legally. The rules of thumb for any and all committees is
– Committees must always be accountable to the board of directors, not the other way around.
– Committees must always have limits defined by the board of directors on authority and responsibility, and should have limits on duration.
– Committees should always have a specific reason to exist and that reason should be to support the board of directors in addressing it’s responsibilities. 

 

Emerson Galfo

Consulting CFO/COO / Board Member/Advisor

Judging from the responses, we need to clearly define the context of what an Executive Committee is. Every organization can have it’s own function/view of what an Executive Committee is.

From my experience, an Executive Committee is under the CEO and reflects a group of trusted C-level executives that influence his decisions. I have had NO experience with Executive Boards other than the usual specific Board Committees dealing with specific realms of the organization.

So coming from this perspective, the Executive Committee is two steps down from the organizational pecking order and should be treated or viewed in that context.. 

 

Terry Tormey

President & CEO at Prevention Pharmaceuticals Inc.

I concur with Mr. James Clouser (above).
They should be avoided except in matters involving a performance question regarding C-Level Executive Board member, where a replacement may be sought.

 

John Baily

Board of Directors at RLI Corp

James hit the nail on the head. Executive committees are a throwback to times when we didn’t have the communication tools we do now. They no longer have a reason for their existence. All directors, weather on a not for profit or a corporate board have equal responsibilities and legal exposures. There is no room or reason for a board within a board in today’s world.

 

Chinyere Nze

Chief Executive Officer

My experience is; Board members have the last say in all policy issues- especially when it concerns operational matter. But in this case, where there is Executive Committee, what it sounds like is that, the organization in question has not clearly identified, nor delineated the roles of each body- which seem to have brought up the issue of ‘conflict’ in final decision- making. Often Executive Committees are created to act as a buffer or interim to the Board, this may sometime cause some over-lapping in executive decision-making.

My suggestion is for the organization to assess and evaluate its current hierarchy- clearly identify & define roles-benefits for creating and having both bodies, and how specific policies/ protocol would benefit the organization. In other words, the CEO needs to define the goals or benefits of having just a Board or having both bodies, and to avoid role conflict or over-lap, which may lead to confusion, as it seems to have been the case here. 

 

STEPHEN KOSMALSKI

CEO / PRESIDENT/BOARD OF DIRECTORS /PRIVATE EQUITY OPERATING PARTNER known for returning growth to stagnant businesses

The critical consideration for all board members is ‘ fiduciary accountability’ of all bod members. With that exposure , all bod members should be aware of key issues . 

 

Thomas Brattle « Toby » Gannett

President and CEO at BCR Managment

I think for large organizations, that executive committees still have an important role as many board members have a great deal going on and operational matters may come up from time to time that need to be handled in a judicial manner. While I think that the Executive committee has an important, at times critical role for a BOD, it is also critical that trust is built between the executive Committee and the BOD. This is only done when the executive committee is transparent, and pushes as many decisions that it can to the full board. If the committee does not have time to bring a matter to the full BOD, then they must convey to the BOD the circumstances why and reasoning for their decision. It is the executive committees responsibility to build that trust with the BOD and work hard to maintain it. All strategic decisions must be made by the full BOD. It sounds like you either have a communication failure, governance issue, or need work with your policies and procedures or a combination of issues.

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*En reprise

L’amitié entre un administrateur et un PCD (CEO) peut interférer avec les responsabilités de fiduciaire*


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

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

Les auteurs tirent deux conclusions de ces résultats : (1) le fait de divulguer des conflits ou des relations personnelles n’élimine pas les conséquences négatives reliées à cette divulgation et (2) les actionnaires doivent se méfier des liens trop étroits que certains administrateurs entretiennent avec leur PCD.

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

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

 

 The C.E.O. Is My Friend. So Back Off

 

…

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

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…

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

That’s to be expected.

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

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

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

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

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

…

____________________________________

* En reprise

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


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

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

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

Avoid presentation overload

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

Avoid understating the importance of compliance

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

Avoid postponing the CEO succession discussion

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

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

Avoid the trap of homogeneity

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

Avoid excessive short-term focus

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

Avoid approvals if you don’t understand the issue

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

Avoid discounting the value of experience

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

Avoid stepping over the line into management’s role

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

Avoid ignoring shareholders

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

Avoid a bias to risk aversion

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

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Le secrétaire du conseil et la gouvernance de l’entreprise | En reprise


Ce matin, je tente de répondre à de nombreuses interrogations concernant le rôle et les fonctions d’un secrétaire du conseil. En premier lieu, voici une présentation faite par Richard Leblanc auprès des membres de la Canadian Society of Corporate Secretaries (CSCS) – Société canadienne des secrétaires corporatifs (SCSC) lors d’un panel à Toronto.

Le professeur Leblanc a énoncé dix recommandations très pertinentes sur les actions à entreprendre par les responsables afin de s’assurer du bon traitement réservé à la diversité. Mon billet du 24 octobre 2012, intitulé Le rôle des secrétaires corporatifs eu égard à la diversité des C.A. des sociétés canadiennes, aborde ce sujet.

Je constate que le président du conseil est un acteur clé dans la conduite des activités des secrétaires. Comme le président assume la responsabilité des communications entre le conseil et la direction, son rôle se confond souvent avec celui de secrétaire.

C’est le président qui établit l’ordre du jour avec le PCD et qui, souvent, rédige ou supervise étroitement les procès-verbaux, une tâche normalement accomplie par le secrétaire. Ainsi, dans beaucoup de cas, le secrétaire joue le rôle d’adjoint au président du conseil pour la gestion administrative des affaires du conseil.

Français : Cabinet du Secrétaire Perpétuel de ...
Français : Cabinet du Secrétaire Perpétuel de l’Académie nationale de Médecine, Paris, France (Photo credit: Wikipedia)

En cherchant à connaître davantage la description de tâche d’un secrétaire du conseil, j’ai trouvé, parmi les publications de notre partenaire IFA (Institut Français des Administrateurs), un document qui répond très bien à cette préoccupation et qui peut convenir à tous les types d’organisations.

Le document de l’IFA est le fruit d’une enquête menées auprès de 149 secrétaires du conseil; il traite (1) du statut, (2) de la fonction, (3) des moyens et (4) du profil du secrétaire du conseil. Vous pouvez télécharger le document au bas du communiqué de l’IFA.

Le Secrétaire du Conseil & la Gouvernance de l’Entreprise | IFA

Les fonctions de Secrétaire du Conseil et des comités du conseil, couvrent par ordre d’importance, les travaux suivants :

  1. rédige les procès-verbaux des réunions du Conseil et s’assure avant leur approbation qu’ils reflètent fidèlement le déroulement des séances ;
  2. est en relation avec les administrateurs en dehors du Conseil, répond à leurs questions, s’assure de leur présence pour le quorum, suit leurs questions matérielles et réglementaires (jetons de présence, suivi des déclarations pour les opérations sur titres etc.) ;
  3. met au point le calendrier des réunions du Conseil, prépare les ordres du jour et convoque les administrateurs ;
  4. prépare l’ordre du jour et organise le déroulement de la séance du Conseil avec le Président ;
  5. prépare ou contribue à l’élaboration des différents documents mis à la disposition des actionnaires en vue de l’Assemblée Générale ;
  6. organise matériellement les réunions, y compris hors du siège social ;
  7. surveille les règles de déontologie et de conformité ;
  8. organise le processus d’évaluation du fonctionnement du Conseil ;
  9. assure le suivi des relations avec les actionnaires individuels, les institutionnels;
  10. est le « Gardien de la gouvernance dans le Groupe »  et
  11. assure le secrétariat du Conseil de chaque filiale.

 

Voici les recommandations qui émanent de cette enquête :

 

1. La fonction de Secrétaire du Conseil doit être formalisée par le Conseil (plutôt que par des textes réglementaires). Son rôle doit être défini dans le Règlement Intérieur du Conseil et sa nomination entérinée lors d’une séance du Conseil.

2. Lorsque des comités spécialisés existent, il est recommandé que le Secrétaire du Conseil soit aussi le secrétaire de tous les comités. Dans le cas contraire, des comptes rendus des travaux de chaque comité doivent être établis et le Secrétaire du Conseil doit en être destinataire.

3. Dans les entreprises cotées, son poste doit évoluer vers un poste à plein temps et les moyens nécessaires à l’exercice de sa fonction doivent lui être donnés. Budgétairement et en comptabilité analytique, un centre de coût spécifique doit lui être attribué (frais de missions, de formation, jetons de présence …)

4. Le Secrétaire du Conseil doit être disponible et, si possible, rattaché directement au Président du Conseil (exécutif ou non) afin de favoriser une plus grande indépendance et un meilleur fonctionnement du Conseil.

5. Si son poste n’est pas à plein temps, il peut être rattaché à d’autres directions dans le cadre de ses autres fonctions.

6. Il est apparu utile qu’un lieu permanent de rencontre et d’échange (mais aussi d’information et de formation) soit mis à la disposition des Secrétaires du Conseil dans le cadre de l’IFA.