Nous avons déjà abordé l’importance d’inscrire un item « huis clos » à l’ordre du jour des réunions du conseil d’administration. Celui-ci doit normalement être à la fin de la réunion et comporter une limite de temps afin d’éviter que la réunion ne s’éternise… et que les membres de la direction (qui souvent attendent la fin de la rencontre) soient mieux informés.
Ensuite, le président du conseil d’administration (PCA) devrait rencontrer le président et chef de la direction (PCD) en privé, et dans les meilleurs délais, afin de rendre compte des résultats et de la portée du huis clos. Cette responsabilité du PCA est déterminante, car les dirigeants ont de grandes attentes et un souci eu égard aux discussions du huis clos.
Plusieurs dirigeants et membres de conseil m’ont fait part de leurs préoccupations concernant la tenue des huis clos. Il y a des malaises dissimulés en ce qui a trait à cette activité ; il faut donc s’assurer de bien gérer la situation, car les huis clos peuvent souvent avoir des conséquences inattendues, voire contre-productives !
Ainsi, le huis clos :
(1) ne doit pas être une activité imprévue et occasionnelle inscrite à l’ordre du jour
(2) doit comporter une limite de temps
(3) doit être piloté par le président du conseil
(4) doit comporter un suivi systématique, et
(5) doit se dérouler dans un lieu qui permet de préserver la confidentialité absolue des discussions.
J’insiste sur cette dernière condition parce que l’on a trop souvent tendance à la négliger ou à l’oublier, carrément. Dans de nombreux cas, la rencontre du conseil a lieu dans un local inapproprié, et les dirigeants peuvent entendre les conversations, surtout lorsqu’elles sont très animées…
Au début de la séance, les membres sont souvent insoucieux ; avec le temps, certains peuvent s’exprimer très (trop) directement, impulsivement et de manière inconvenante. Si, par mégarde, les membres de la direction entendent les propos énoncés, l’exercice peut prendre l’allure d’une véritable calamité et avoir des conséquences non anticipées sur le plan des relations interpersonnelles entre les membres de la direction et avec les membres du conseil.
L’ajout d’un huis clos à l’ordre du jour témoigne d’une volonté de saine gouvernance, mais, on le comprend, il y a un certain nombre de règles à respecter si on ne veut pas provoquer la discorde. Les OBNL, qui ont généralement peu de moyens, sont particulièrement vulnérables aux manquements à la confidentialité ! Je crois que dans les OBNL, les dommages collatéraux peuvent avoir des incidences graves sur les relations entre employés, et même sur la pérennité de l’organisation.
J’ai à l’esprit plusieurs cas de mauvaise gestion des facteurs susmentionnés et je crois qu’il vaut mieux ne pas tenir le bien-fondé du huis clos pour acquis.
Ayant déjà traité des bienfaits des huis clos lors d’un billet antérieur, je profite de l’occasion pour vous souligner, à nouveau, un article intéressant de Matthew Scott sur le site de Corporate Secretary qui aborde un sujet qui préoccupe beaucoup de hauts dirigeants : lehuis clos lors des sessions du conseil d’administration ou de certains comités.
L’auteur explique très bien la nature et la nécessité de cette activité à inscrire à l’ordre du jour du conseil. Voici les commentaires que j’exprimais à cette occasion.
«Compte tenu de la “réticence” de plusieurs hauts dirigeants à la tenue de cette activité, il est généralement reconnu que cet item devrait toujours être présent à l’ordre du jour afin d’éliminer certaines susceptibilités.
Le huis clos est un temps privilégié que les administrateurs indépendants se donnent pour se questionner sur l’efficacité du conseil et la possibilité d’améliorer la dynamique interne; mais c’est surtout une occasion pour les membres de discuter librement, sans la présence des gestionnaires, de sujets délicats tels que la planification de la relève, la performance des dirigeants, la rémunération globale de la direction, les poursuites judiciaires, les situations de conflits d’intérêts, les arrangements confidentiels, etc. On ne rédige généralement pas de procès-verbal à la suite de cette activité, sauf lorsque les membres croient qu’une résolution doit absolument apparaître au P.V.
La mise en place d’une période de huis clos est une pratique relativement récente, depuis que les conseils d’administration ont réaffirmé leur souveraineté sur la gouvernance des entreprises. Cette activité est maintenant considérée comme une pratique exemplaire de gouvernance et presque toutes les sociétés l’ont adoptée.
Notons que le rôle du président du conseil, en tant que premier responsable de l’établissement de l’agenda, est primordial à cet égard. C’est lui qui doit informer le PCD de la position des membres indépendants à la suite du huis clos, un exercice qui demande du tact!
Je vous invite à lire l’article ci-dessous. Vos commentaires sont les bienvenus».
Aujourd’hui, je partage avec vous un article publié dans le magazine suisse Le Temps.ch qui présente les résultats d’une recherche sur la bonne gouvernance des caisses de retraite en lien avec les recommandations des fonds de placement tels que BlackRock.
L’auteur, Emmanuel Garessus, montre que même si le lien entre la performance des sociétés et la bonne gouvernance semble bien établi, les caisses de retraite faisant l’objet de la recherche ont des indices de gouvernance assez dissemblables. L’étude montre que les caisses ayant des indices de gouvernance faibles ont des rendements plus modestes en comparaison avec les indices de référence retenus.
Également, il ressort de cette étude que c’était surtout la prédominance de la gestion des risques qui était associée à la performance des caisses de retraite.
Comme le dit Christian Ehmann, spécialisé dans la sélection de fonds de placement auprès de Safra Sarasin, « la gouvernance n’est pas une cause de surperformance, mais il existe un lien direct entre les deux ».
Encore une fois, il appert que BlackRock défend les petits épargnants-investisseurs en proposant des normes de gouvernance uniformisées s’appliquant au monde des entreprises cotées en bourses.
J’ai reproduit l’article en français ci-dessous afin que vous puissiez bien saisir l’objet de l’étude et ses conclusions.
Bonne lecture ! Vos commentaires sont les bienvenus.
Le principe de gouvernance selon lequel une action donne droit à une voix en assemblée générale est bafoué par de très nombreuses sociétés, surtout technologiques, au premier rang desquelles on trouve Facebook, Snap, Dropbox et Google. BlackRock, le plus grand groupe de fonds de placement du monde, demande aux autorités d’intervenir et de présenter des standards minimaux, indique le Financial Times.
Le groupe dont Philipp Hildebrand est vice-président préfère un appel à l’Etat plutôt que de laisser les fournisseurs d’indices (MSCI, Dow Jones, etc.) modifier la composition des indices en y intégrant divers critères d’exclusion. Barbara Novick, vice-présidente de BlackRock, a envoyé une lettre à Baer Pettit, président de MSCI, afin de l’informer de son désir de mettre de l’ordre dans les structures de capital des sociétés cotées.
Mark Zuckerberg détient 60% des droits de vote
De nombreuses sociétés ont deux catégories d’actions donnant droit à un nombre distinct de droits de vote. Les titres Facebook de la classe B ont par exemple dix fois plus de droits de vote que ceux de la classe A. Mark Zuckerberg, grâce à ses actions de classe B (dont il détient 75% du total), est assuré d’avoir 60% des droits de vote du groupe. A la suite du dernier scandale lié à Cambridge Analytica, le fondateur du réseau social ne court donc aucun risque d’être mis à la porte, explique Business Insider. L’intervention de BlackRock n’empêche pas l’un de ses fonds (Global Allocation Fund) d’avoir probablement accumulé des titres Facebook après sa correction de mars, selon Reuters, pour l’intégrer dans ses dix principales positions.
Cette structure du capital répartie en plusieurs catégories d’actions permet à un groupe d’actionnaires, généralement les fondateurs, de contrôler la société avec un minimum d’actions. Les titres ayant moins ou pas de droit de vote augmentent de valeur si la société se développe bien, mais leurs détenteurs ont moins de poids en assemblée générale. Les sociétés qui disposent d’une double catégorie de titres la justifient par le besoin de se soustraire aux réactions à court terme du marché boursier et de rester ainsi concentrés sur les objectifs à long terme. Ce sont souvent des sociétés technologiques.
Facebook respecte très imparfaitement les principes de bonne conduite en matière de gouvernance. Mark Zuckerberg, 33 ans, est en effet à la fois président du conseil d’administration et président de la direction générale. Ce n’est pas optimal puisque, en tant que président, il se contrôle lui-même. Sa rémunération est également inhabituelle. Sur les 8,9 millions de dollars de rémunération, 83% sont liés à ses frais de sécurité et le reste presque entièrement à l’utilisation d’un avion privé (son salaire est de 1 dollar et son bonus nul).
Quand BlackRock défend le petit épargnant
Le site de prévoyance IPE indique que le fonds de pension suédois AP7, l’un des plus grands actionnaires du réseau social, est parvenu l’an dernier à empêcher l’émission d’une troisième catégorie de titres Facebook. Cette dernière classe d’actions n’aurait offert aucun droit de vote. Une telle décision, si elle avait été menée à bien, aurait coûté 10 milliards de dollars à AP7. Finalement Facebook a renoncé.
BlackRock prend la défense du petit investisseur. Il est leader de la gestion indicielle et des ETF et ses produits restent investis à long terme dans tous les titres composant un indice. Il préfère influer sur la gouvernance par ses prises de position que de vendre le titre. Le plus grand groupe de fonds de placement du monde demande aux autorités de réglementation d’établir des standards de gouvernance en collaboration avec les sociétés de bourse plutôt que de s’en remettre aux fournisseurs d’indices comme MSCI.
La création de plusieurs classes d’actions peut être justifiée par des start-up en forte croissance dont les fondateurs ne veulent pas diluer leur pouvoir. BlackRock reconnaît ce besoin spécifique aux start-up en forte croissance, mais le gérant estime que «ce n’est acceptable que durant une phase transitoire. Ce n’est pas une situation durable.»
Le géant des fonds de placement aimerait que les producteurs d’indices soutiennent sa démarche et créent des «indices alternatifs» afin d’accroître la transparence et de réduire l’exposition aux sociétés avec plusieurs catégories de titres. L’initiative de BlackRock est également appuyée par George Dallas, responsable auprès du puissant International Corporate Governance Network (ICGN).
La gouvernance des «bonnes caisses de pension»
La recherche économique a largement démontré l’impact positif d’une bonne gouvernance sur la performance d’une entreprise. Mais presque tout reste à faire en matière de fonds de placement et de caisses de pension.
«La gouvernance n’est pas une cause de surperformance, mais il existe un lien direct entre les deux. Les caisses de pension qui appartiennent au meilleur quart en termes de bonne gouvernance présentent une surperformance de 1% par année par rapport au moins bon quart», explique Christian Ehmann, spécialisé dans la sélection de fonds de placement auprès de Safra Sarasin, lors d’une présentation organisée par la CFA Society Switzerland, à Zurich.
Ce dernier est avec le professeur Manuel Ammann coauteur d’une étude sur la gouvernance et la performance au sein des caisses de pension suisses (Is Governance Related to Investment Performance and Asset Allocation?, Université de Saint-Gall, 2016). «Le travail sur cette étude m’a amené à porter une attention particulière à la gouvernance des fonds de placement dans mon travail quotidien», déclare Christian Ehmann. Son regard porte notamment sur la structure de l’équipe de gestion, son organisation et son système de gestion des risques. «Je m’intéresse par exemple à la politique de l’équipe de gérants en cas de catastrophe», indique-t-il.
Claire surperformance
L’étude réalisée sur 139 caisses de pension suisses, représentant 43% des actifs gérés, consiste à noter objectivement la qualité de la gouvernance et à définir le lien avec la performance de gestion. L’analyse détaille les questions de gouvernance en fonction de six catégories, de la gestion du risque à la transparence des informations en passant par le système d’incitations, l’objectif et la stratégie d’investissement ainsi que les processus de placement. Sur un maximum de 60 points, la moyenne a été de 21 (plus bas de 10 et plus haut de 50). La dispersion est donc très forte entre les caisses de pension. Certaines institutions de prévoyance ne disposent par exemple d’aucun système de gestion du risque.
Les auteurs ont mesuré la performance sur trois ans (2010 à 2012), le rendement relatif par rapport à l’indice de référence et l’écart de rendement par rapport au rendement sans risque (ratio de Sharpe). Toutes ces mesures confirment le lien positif entre la gouvernance et la performance (gain de 2,7 points de base par point de gouvernance). Les moteurs de surperformance proviennent clairement de la gestion du risque et du critère portant sur les objectifs et la stratégie d’investissement. Les auteurs constatent aussi que même les meilleurs, en termes de gouvernance, sous-performent leur indice de référence.
La deuxième étape de la recherche portait sur l’existence ou non d’une relation entre le degré de gouvernance et l’allocation des actifs. Ce lien n’a pas pu être établi.
Voici un article très intéressant publié dans l’édition d’avril 2018 de la Harvard Business Review qui porte sur l’identification des grands principes qui guident les comportements des présidents de conseil d’administration.
L’auteur, Stanislav Shekshnia*, est professeur à l’Institut européen d’administration des affaires (INSEAD) et chercheur émérite dans le domaine de la gouvernance. Son article est basé sur une enquête auprès de 200 présidents de conseils.
Que doit-on retenir de cette recherche eu égard aux rôles distinctifs des présidents de conseils d’administration et aux caractéristiques qui les distinguent des CEO ?
Huit principes ressortent de ces analyses :
(1) Be the guide on the side; show restraint and leave room for others
(2) Practice teaming—not team building
(3) Own the prep work; a big part of the job is preparing the board’s agenda and briefings
(4) Take committees seriously; most of the board’s work is done in them
(5) Remain impartial
(6) Measure the board’s effectiveness by its inputs, not its outputs
(7) Don’t be the CEO’s boss
(8) Be a representative with shareholders, not a player.
Je vous invite à lire l’article au complet puisqu’il regorge d’exemples très efficaces.
The majority of board chairs are former CEOs, who are used to calling the shots and being stars. So it’s no surprise that many start behaving as if they are alternative chief executives of their firms. That sows conflict and confusion at the top. In addition, as research by INSEAD’s Corporate Governance Centre shows, the two jobs are distinctly different—and so are the skills needed in them. The chair leads the board, not the company, and that means being a facilitator of effective group discussions, not a team commander.
After surveying 200 board chairs and interviewing 140 chairs, directors, shareholders, and CEOs, INSEAD has distilled the requirements for the chair’s role down to eight principles: (1) Be the guide on the side; show restraint and leave room for others. (2) Practice teaming—not team building. (3) Own the prep work; a big part of the job is preparing the board’s agenda and briefings. (4) Take committees seriously; most of the board’s work is done in them. (5) Remain impartial. (6) Measure the board’s effectiveness by its inputs, not its outputs. (7) Don’t be the CEO’s boss. (8) Be a representative with shareholders, not a player. While many executives need to shift gears and mindsets to follow these, successful chairs say the effort pays off.
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*Stanislav Shekshnia is a professor at INSEAD. He is also a senior partner at Ward Howell, a global human capital consultancy firm, and a board member at a number of public and private companies in Central and Eastern Europe.
Nous avons souvent publié des billets qui abordent diverses conséquences liées à l’émission d’actions à votes multiples. L’article intitulé, « ACTIONS MULTIVOTANTES : LE MODÈLE DE BOMBARDIER SOULÈVE DES VAGUES », publié dans La Presse le 21 juillet 2015 avait d’ailleurs fait couler beaucoup d’encre.
Ces émissions d’actions sont-elles fondées, justifiées, légitimes et équitables dans le contexte de la gouvernance des sociétés cotées en bourse ? Voici ce que pense Yvan Allaire, président del’Institut sur la gouvernance d’organisations privées et publiques, dans un article paru dans Les Affaires le 9 mai 2016 : Pourquoi le Canada a besoin des actions multivotantes ?
Vous trouverez, ci-dessous, un article publié par David J. Berger de la firme Wilson Sonsini Goodrich & Rosati, et par Laurie Simon Hodrick de la Stanford Law School, paru sur le site du Harvard Law School Forum on CorporateGovernance, qui fait le point sur cette épineuse question.
Les études montrent que ces types d’arrangements ne sont pas immanquablement dommageables pour les actionnaires, comme nous laissent croire plusieurs groupes d’intérêt tels que le Conseil des investisseurs institutionnels et la firme de conseil Institutional Shareholder Services (« ISS »). Plusieurs militent en faveur d’une durée limitée pour de telles émissions d’actions.
Les récentes émissions d’actions à classes multiples des entreprises de haute technologie ne nous permettent pas, à ce stade-ci, de statuer sur les avantages à long terme pour les actionnaires.
Les auteurs concluent qu’il est trop hâtif pour se prononcer définitivement sur la question, et pour réglementer cette structure de capital.
Clarion calls for regulating dual-class stock have become a common occurrence. For example, the Council of Institutional Investors (“CII”) has called upon the NYSE and Nasdaq to adopt a rule requiring all companies going public with dual-class shares to include a so-called “sunset provision” in their charter, which would convert the company to a single class of stock after a set period of years. CII has also urged index providers to discourage the inclusion of firms with dual-class structures (and both the S&P Dow Jones and FTSE Russell indices have already done so). Many individual CII members, along with some of the world’s largest mutual funds and other investors, have joined together in the “Framework for U.S. Stewardship and Governance” to take a strong stance against dual class structures.
Proxy advisory services have also announced their opposition to dual-class companies. For example, Institutional Shareholder Services (“ISS”) has announced a plan to recommend against directors at companies with differential voting rights if there are no “reasonable sunset” provisions. Even the SEC’s Investor Advisory Committee has raised its own concerns about dual-class stock companies, calling on the SEC to “devote more resources” to “identify risks” arising out of governance disputes from dual-class structures. [1]
Yet what is the empirical evidence supporting these calls for regulation of dual-class companies? Dual-class companies have existed for nearly a century, going back to the Dodge Brothers’ IPO in 1925 and Ford’s IPO in 1956. Historically, technology companies did not adopt a dual-class capital structure. Rather, until Google’s (now Alphabet) 2004 IPO, most dual-class companies were family businesses, media companies seeking to ensure their publications could maintain journalistic editorial independence, or other companies led by a strong group of insiders. These companies often adopted their dual-class structures to avoid the pressures of having to focus primarily on short-term variations in stock price.
Many of these older dual-class companies were the focus of a seminal 2010 paper that found that dual class firms tend to be more levered and to underperform their single class counterparts, with increased insider cash flow rights increasing firm value and increased insider voting rights reducing firm value. [2]
Since 2010, there have been an increasing number of technology companies going public with dual-class (or multi-class) share structures. Anecdotal evidence is mixed, but the early empirical evidence on the performance of these newer dual-class companies as a group is quite interesting. In particular, though many of these companies have not been public for very long, the limited available data suggests that these newer dual-class companies might even be out-performing single-class structured companies.
For example, MSCI, one of the largest global index providers, recently released a study showing that companies with “unequal voting stocks in aggregate outperformed the market over the period from November 2007 to August 2017.” [3] The study further concluded that excluding these companies “from market indexes would have reduced the indexes’ total returns by approximately 30 basis points per year over [the] sample period.” The differential was even greater in North America, where stocks with unequal voting rights outperformed stocks with the more traditional one-share/one-vote structure by 4.5% annually.
Recent academic research corroborates the outperformance of the newly public companies with dual-class stock. For example, one study concludes that dual-class companies, avoiding short-term market pressures, have more growth opportunities and obtain higher market valuations than matched single-class firms [4] Even with respect to perpetual dual-class stock companies, research shows that these companies, when controlled by a founding family, “significantly and economically” outperform nonfamily firms. [5] Another study maintains that it might be more efficient to give more voting power to shareholders who are better informed, thereby allowing them more influence, and correspondingly less voting power to those who are less informed, including passive index funds. Passive investors would pay a discounted price in exchange for waiving their voting rights. [6]
We have begun our own preliminary research on these issues, with considerations including corporate control, liquidity, capital allocation, “next generation” issues, and using stock as currency for acquisitions and to reward employees. While still in its initial stage, our analysis also raises fundamental questions about how much value shareholders perceive in having voting stock versus non-voting stock in these relatively new to market technology companies. For example, consider Classes A and C of Alphabet, issued through a stock dividend four years ago, which are different only in specific ways, most notably that A has one vote per share and C has none. [7] Atypically, for each of the last three trading days in February, Alphabet’s non-voting class C share, GOOG, had a higher closing market price than its voting class A share, GOOGL. [8] More broadly, since GOOG was introduced on April 3, 2014, the correlation between the two classes’ stock prices is 99.9%, and they have similar stock price standard deviations, betas, trading volume, and short interest. [9]
We believe that it is too early to make a definitive determination from an economic standpoint as to whether having dual-class stock is better or worse for investors in the current market environment, especially for younger companies. Any consideration to limit dual-class stock, including adoption of mandatory sunset provisions, must be based on analysis not anecdotes. It should also recognize the changing nature of public markets, including the following:
The dominance of shareholder primacy has led boards of single-class companies to feel short-term pressure from shareholders. As no less an authority than Delaware Chief Justice Strine has frequently recognized, boards respond to those who elect them. In today’s world, for most public companies that is a handful of institutional investors, as by 2016 institutional investors owned 70% of all public shares, while just three money managers held the largest stock position in 88% of the companies in the S&P 500. [10] While many of these institutions emphasize that they are long-term holders, directors of companies with high institutional investor ownership continue to feel the pressure to take actions to achieve short-term stock increases. For example, a recent survey of over 1000 directors and C-level executives by McKinsey and the Canadian Pension Plan Investment Board (“CPPIB”) found that nearly 80% of these executives felt “especially pressured” to demonstrate strong financial results in two years or less. [11]
The changing nature of the public and private capital markets. The increased use by technology companies of dual-class capital structures when entering the public markets must be viewed within the changing nature of both the public and private markets for technology companies. According to the Wall Street Journal, more money was raised in private markets than in public markets in 2017, while the number of public companies continues to decline—the number of public companies has fallen by about half since 1996. [12] SEC Commissioner Clayton (among others) has spoken repeatedly about the problems arising out of the decline in the number of public companies. Limiting the ability of public companies to have different capital structures will certainly impact the decision by some companies about whether or not to go public.
Dual-class stock and alternative capital structures across the world. Regulators considering how to respond to the growth of dual-class stock should consider the growing acceptance of dual-class stock in markets globally. For example, in recent months both Hong Kong and Singapore have opened their markets to dual-class listings. Many European markets already have rules allowing for dual-class companies or other similar structures that allow companies to focus on longer-term principles as well as non-shareholder constituencies. Even in the U.S., newer markets, such as the Long-Term Stock Exchange, are working to list companies with alternative capital structures, so that companies can focus on building a business, in apparent recognition that surrendering to the current dominance of shareholder primacy may not be the best governance structure for all companies.
For these reasons, we believe that the current effort to mandate some form of one-share one-vote for all public companies in the U.S. is premature. The limited empirical evidence on the technology and emerging growth companies that are the target of these regulations is insufficient to support the adoption of new regulations, as the evidence that is available indicates that the most recent group of dual-class companies may have performed as well, if not better, than those with a single class of stock.
2 Paul Gompers, Joy Ishii, and Andrew Metrick, “Extreme Governance: An Analysis of Dual-Class Shares in the United States,” Review of Financial Studies 23, 1051-1087 (2010). See also Ronald Masulis, Cong Wang, and Fei Xie, “Agency Problems at Dual-Class Companies” Journal of Finance64, 1697-1727 (2009).(go back)
3 Dmitris Melas, “Putting the Spotlight on Spotify: Why have Stocks with Unequal Voting Right Outperformed?” MSCI Research, April 3, 2018. The study’s findings are robust to controlling for common factors including country, sector, and style factor exposures.(go back)
4 Bradford Jordan, Soohyung Kim, Nad Mark Liu, “Growth Opportunities, Short-Term Market Pressure, and Dual-Class Share Structure,” Journal of Corporate Finance 41, 304-328 (2016).(go back)
5 See Ronald Anderson, Ezgi Ottolenghi, and David Reeb, “The Dual Class Premium: A Family Affair,” August 2017.(go back)
6 Dorothy Shapiro Lund, “Nonvoting Shares and Efficient Corporate Governance,” Stanford Law Review 71 (forthcoming 2019).(go back)
7 There are also class B shares with 10 votes per share, 92.7% of which are owned by executives Eric Schmidt, Sergey Brin, and Larry Page as of December 31, 2017, representing 56.7% of the total voting power (source: Alphabet 10K).(go back)
8 GOOG also closed higher than GOOGL on March 14, March 16, and March 20, 2018. This is not the first such finding: In 1994, Comcast’s nonvoting shares often sold for more than its voting shares. See Paul Schultz and Sophie Shive, “Mispricing of Dual-Class Shares: Profit Opportunities, Arbitrage, and Trading,” Journal of Financial Economics 98, 524-549 (2010).(go back)
9 For the past four years, GOOG and GOOGL have standard deviations (betas) of 176.6 (1.24) and 177.8 (1.23), respectively. GOOGL is slightly more liquid than GOOG, as GOOGL daily share volume averages 2.3 million shares, while GOOG averages 1.97 million shares. GOOGL and GOOG have short interest of 3.4 million and 3.6 million shares, respectively.(go back)
10 See The Hon. Kara M. Stein, Commissioner, Securities and Exchange Commission, The Markets in 2017: What’s at Stake, February 24, 2017.(go back)
11 See Dominic Barton and Mark Wiseman, Investing for the Long-Term, Harvard Business Review, 2014.(go back)
12 Jean Eaglesham and Coulter Jones, “The Fuel Powering Corporate America: $2.4 Trillion in Private Fundraising,” Wall Street Journal, April 3, 2018.(go back)
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*David J. Berger is a partner at Wilson Sonsini Goodrich & Rosati; and Laurie Simon Hodrick is Visiting Professor of Law and Rock Center for Corporate Governance Fellow at Stanford Law School, Visiting Fellow at the Hoover Institution, and A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business at Columbia Business School. Related research from the Program on Corporate Governance includes The Untenable Case for Perpetual Dual-Class Stock (discussed on the Forum here) and The Perils of Small-Minority Controllers (discussed on the Forum here), both by Lucian Bebchuk and Kobi Kastiel.
Quelle est la raison d’être d’une entreprise sur le plan juridique ? À qui doit-elle rendre des comptes ?
Une entreprise est-elle au service exclusif de ses actionnaires ou doit-elle obligatoirement considérer les intérêts de ses parties prenantes (stakeholders) avant de prendre des décisions de nature stratégiques ?
On conviendra que ces questions ont fréquemment été abordées dans ces pages. Cependant, la réalité de la conduite des organisations semble toujours refléter le modèle de la primauté des actionnaires, mieux connu maintenant sous l’appellation « démocratie de l’actionnariat ».
L’article de Martin Lipton* fait le point sur l’évolution de la reconnaissance des parties prenantes au cours des quelque dix dernières années.
Je crois que les personnes intéressées par les questions de gouvernance (notamment les administrateurs de sociétés) doivent être informées des enjeux qui concernent leurs responsabilités fiduciaires.
Bonne lecture. ! Vos commentaires sont les bienvenus.
Whether the purpose of the corporation is to generate profits for its shareholders or to operate in the interests of all of its stakeholders has been actively debated since 1932, when it was the subject of dueling law review articles by Columbia law professor Adolf Berle (shareholders) and Harvard law professor Merrick Dodd (stakeholders).
Following “Chicago School” economics professor Milton Friedman’s famous (some might say infamous) 1970 New York Times article announcing ex cathedra that the social responsibility of a corporation is to increase its profits, shareholder primacy was widely viewed as the purpose and basis for the governance of a corporation. My 1979 article, Takeover Bids in the Target’s Boardroom, arguing that the board of directors of a corporation that was the target of a takeover bid had the right, if not the duty, to consider the interests of all stakeholders in deciding whether to accept or reject the bid, was widely derided and rejected by the Chicago School economists and law professors who embraced Chicago School economics. Despite the 1985 decision of the Supreme Court of Delaware citing my article in holding that a board of directors could take into account stakeholder interests, and over 30 states enacting constituency (stakeholder) statutes, shareholder primacy continued to dominate academic, economic, financial and legal thinking—often disguised as “shareholder democracy.”
While the debate continued and stakeholder governance gained adherents in the new millennium, shareholder primacy continued to dominate. Only since the 2008 financial crisis and resulting recession has there been significant recognition that shareholder primacy has been a major driver of short-termism, encourages activist attacks on corporations, reduces R&D expenditures, depresses wages and reduces long-term sustainable investments—indeed, it promotes inequality and strikes at the very heart of our society. In the past five years, the necessity for changes has been recognized by significant academic, business, financial and investor reports and opinions. An example is the 2017 paper I and a Wachtell Lipton team prepared for the World Economic Forum, The New Paradigm: A Roadmap for an Implicit Corporate Governance Partnership Between Corporations and Investors to Achieve Sustainable Long-Term Investment and Growth, whichquotes or cites many of the others.
This year we are seeing important new support for counterbalancing shareholder primacy and promoting long-term sustainable investment. Among the many prominent examples is the January 2018 annual letter from Larry Fink, Chairman of BlackRock, to CEOs:
Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures to distribute earnings, and, in the process, sacrifice investments in employee development, innovation, and capital expenditures that are necessary for long-term growth. It will remain exposed to activist campaigns that articulate a clearer goal, even if that goal serves only the shortest and narrowest of objectives. And ultimately, that company will provide subpar returns to the investors who depend on it to finance their retirement, home purchases, or higher education.
This was followed in March by the report of a commission appointed by the French Government recommending amendment to the French Civil Code to add, “The company shall be managed in its own interest, considering the social and environmental consequences of its activity,” following the existing, “All companies shall have a lawful purpose and be incorporated in the common interest of the shareholders.” The draft amendment is intended to establish the principle that each company should pursue its own interest—namely, the continuity of its operation, sustainability through investment, collective creation and innovation. The report notes that this amendment integrates corporate and social responsibility considerations into corporate governance and goes on to state that each company has a purpose not reducible to profit and needs to be aware of its purpose. The report recommends an amendment to the French Commercial Code for the purpose of entrusting the boards of directors to define a company’s purpose in order to guide the company’s strategy, taking into account its social and environmental consequences.
Subject to the outcome of its impact assessment, the Commission will table a legislative proposal to clarify institutional investors’ and asset managers’ duties in relation to sustainability considerations by Q2 2018. The proposal will aim to (i) explicitly require institutional investors and asset managers to integrate sustainability considerations in the investment decision-making process and (ii) increase transparency, towards end-investors on how they integrate such sustainability factors in their investment decisions in particular as concerns their exposure to sustainability risks.
Further, the Commission proposes a number of other laws or regulations designed to promote ESG, CSR and sustainable long-term investment.
In addition to these examples, there are similar policy statements by major investors and similar efforts at legislation to modulate or eliminate shareholder primacy in Great Britain and the United States. While it is not certain that any legislation will soon be enacted, it is clear that the problems have been identified, support is growing to find a way to address them and if implicit stakeholder governance does not take hold, legislation will ensue to assure it.
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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. This post is based on a Wachtell Lipton publication by Mr. Lipton.
Les administrateurs de sociétés doivent apporter une attention spéciale à la gestion des risques telle qu’elle est mise en œuvre par les dirigeants des entreprises.
Les préoccupations des fiduciaires pour la gestion des risques, quoique fondamentales, sont relativement récentes, et les administrateurs ne savent souvent pas comment aborder cette question.
L’article présenté, ci-dessous, est le fruit d’une recherche de Martin Lipton, fondateur de la firme Wachtell, Lipton, Rosen & Katz, spécialisée dans les fusions et acquisitions ainsi que dans les affaires de gouvernance.
L’auteur et ses collaborateurs ont produit un guide des pratiques exemplaires en matière de gestion des risques. Cet article de fond s’adresse aux administrateurs et touche aux éléments-clés de la gestion des risques :
(1) la distinction entre la supervision des risques et la gestion des risques ;
(2) les leçons que l’on doit tirer de la supervision des risques à Wells Fargo ;
(3) l’importance accordée par les investisseurs institutionnels aux questions des risques ;
(4) « tone at the top » et culture organisationnelle ;
(5) les devoirs fiduciaires, les contraintes réglementaires et les meilleures pratiques ;
(6) quelques recommandations spécifiques pour améliorer la supervision des risques ;
(7) les programmes de conformité juridiques ;
(8) les considérations touchant les questions de cybersécurité ;
(9) quelques facettes se rapportant aux risques environnementaux, sociaux et de gouvernance ;
(10) l’anticipation des risques futurs.
Voici donc l’introduction de l’article. Je vous invite à prendre connaissance de l’article au complet.
The past year has seen continued evolution in the political, legal and economic arenas as technological change accelerates. Innovation, new business models, dealmaking and rapidly evolving technologies are transforming competitive and industry landscapes and impacting companies’ strategic plans and prospects for sustainable, long-term value creation. Tax reform has created new opportunities and challenges for companies too. Meanwhile, the severe consequences that can flow from misconduct within an organization serve as a reminder that corporate operations are fraught with risk. Social and environmental issues, including heightened focus on income inequality and economic disparities, scrutiny of sexual misconduct issues and evolving views on climate change and natural disasters, have taken on a new salience in the public sphere, requiring companies to exercise utmost care to address legitimate issues and avoid public relations crises and liability.
Corporate risk taking and the monitoring of corporate risk remain prominently top of mind for boards of directors, investors, legislators and the media. Major institutional shareholders and proxy advisory firms increasingly evaluate risk oversight matters when considering withhold votes in uncontested director elections and routinely engage companies on risk-related topics. This focus on risk management has also led to increased scrutiny of compensation arrangements throughout the organization that have the potential for incentivizing excessive risk taking. Risk management is no longer simply a business and operational responsibility of management. It has also become a governance issue that is squarely within the oversight responsibility of the board. This post highlights a number of issues that have remained critical over the years and provides an update to reflect emerging and recent developments. Key topics addressed in this post include:
the distinction between risk oversight and risk management;
a lesson from Wells Fargo on risk oversight;
the strong institutional investor focus on risk matters;
tone at the top and corporate culture;
fiduciary duties, legal and regulatory frameworks and third-party guidance on best practices;
specific recommendations for improving risk oversight;
legal compliance programs;
special considerations regarding cybersecurity matters;
special considerations pertaining to environmental, social and governance (ESG) risks; and
Aujourd’hui, je partage avec vous un cas publié sur le site de Julie Garland McLellan qui demande beaucoup d’analyse, de stratégie et de jugement.
Dans ce cas, Xandra, la présidente du comité d’audit d’une petite association professionnelle, propose une solution courageuse afin de mettre un terme au déclin du membership de l’organisation : une diminution des frais de cotisation en échange d’une hausse des frais de service et des frais associés à la formation.
La proposition a été jugée inéquitable par les membres, qui ont soulevé leur grande désapprobation, en la condamnant sur les réseaux sociaux.
Plusieurs membres insistent pour que cette décision soit mise au vote lors de l’AGA, et que le PDG soit démis de ses fonctions.
Étant donné que les règlements internes de l’organisation ne permettent pas aux membres de voter sur ces questions en assemblée générale (puisque c’est une prérogative du CA), le président du conseil demande à Xandra de préparer une défense pour le rejet de la requête.
Xandra est cependant consciente que la stratégie de communication arrêtée devra faire l’objet d’une analyse judicieuse afin de ne pas mettre la survie de l’organisation en danger.
Comment la responsable doit-elle procéder pour présenter une argumentation convaincante ?
La situation est exposée de manière assez synthétique ; puis, trois experts se prononcent sur le dilemme que vit Xandra.
Je vous invite donc à prendre connaissance de ces avis, en cliquant sur le lien ci-dessous, et me faire part vos commentaires.
This month our case study investigates the options for a board to respond to shareholders who know that they want something but don’t quite know how to get it. I hope you enjoy thinking about the governance and strategic implications of this dilemma:
Xandra chairs the audit committee of a small professional association. She has a strong working relationship with the chair and CEO who are implementing a strategic reform based on ‘user pays services’ to redress a fall in membership numbers and hence revenue. The strategy bravely introduced a reduced membership fee compensated by charges for advisory services and an increase in the cost of member events and education.
Some members felt that this was unfair as they used more services than others and would now pay a higher total amount each year. They have voiced their concerns through the company’s Facebook page and in an ‘open’ letter addressed to the board. In the letter they have said that they want to put a motion to the next AGM asking for a vote on the new pricing strategy and for the CEO to be dismissed. They copied the letter to a journalist in a national paper. The journalist has not contacted the company for comment or published the letter.
The CEO has checked the bylaws and the open letter does not meet the technical requirements for requisitioning a motion (indeed the authors seem to have confused their right to requisition an EGM with the right of members to speak at the AGM and ask questions of the board and auditor).
As the only person qualified in directorship on the association board, the Chair has asked Xandra « how can we push back against this request? »
Xandra is not sure that it is wise to rebuff a clear request for engagement with the members on an issue that is important for the survival of their association. She agrees that putting a motion to a members’ meeting could be dangerous. She also agrees that the matter needs to be handled sensitively and away from emotive online fora where passions are running unexpectedly high
Voici un article qui met en garde les structures de gouvernance telles que Facebook.
L’article publié sur le site de Directors&Boards par Eve Tahmincioglu soulève plusieurs questions fondamentales :
(1) L’actionnariat à vote multiple conduit-il à une structure de gouvernance convenable et acceptable ?
(2) Pourquoi le principe de gouvernance stipulant une action, un vote, est-il bafoué dans le cas de plusieurs entreprises de la Silicone Valley ?
(3) Quel est le véritable pouvoir d’un conseil d’administration où les fondateurs sont majoritaires par le jeu des actions à classe multiple ?
(4) Doit-on réglementer pour rétablir la position de suprématie du conseil d’administration dirigé par des administrateurs indépendants ?
(5) Dans une situation de gestion de crise comme celle qui confronte Facebook, quel est le rôle d’un administrateur indépendant, président de conseil ?
(6) Les médias cherchent à connaître la position du PDG sans se questionner sur les responsabilités des administrateurs. Est-ce normal en gestion de crise ?
Je vous invite à lire l’article ci-dessous et à exprimer vos idées sur les principes de bonne gouvernance appliqués aux entreprises publiques contrôlées par les fondateurs.
Facebook is arguably facing one of the toughest challenges the company has ever faced. But the slow and tepid response from leadership, including the boards of directors, concerns governance experts.
The scandal involving data-mining firm Cambridge Analytica allegedly led to 50 million Facebook users’ private information being compromised but a public accounting from Facebook’s CEO and chairman Mark Zuckerberg has been slow coming.
Could this be a governance breakdown?
“This high-powered board needs to engage more strongly,” says Steve Odland, CEO of the Committee for Economic Development and a board member for General Mills, Inc. and Analogic Corporation. Facebook’s board includes Netflix’s CEO Reed Hastings; Susan D. Desmond-Hellmann, CEO of The Gates Foundation; the former chairman of American Express Kenneth I. Chenault; and PayPal cofounder Peter A. Thiel, among others.
Odland points out that Facebook has two powerful and well-known executives, Zuckerberg and Facebook COO Sheryl Sandberg, who have been publicly out there on every subject, but largely absent on this one.
“They need to get out and publicly talk about this quickly,” Odland maintains. “They didn’t have to have all the answers. But this vacuum of communications gets filled by others, and that’s not good for the company.”
Indeed, politicians, the Federal Trade Commission and European politicians are stepping in, he says, “and that could threaten the whole platform.”
Typically, he adds, it comes back to management to engage and use the board, but “I don’t think Zuckerberg is all that experienced in that regard. This is where the board needs to help him.”
But how much power does the board have?
Charles Elson, director of the University of Delaware’s Weinberg Center for Corporate Governance, sees the dual-class ownership structure of Facebook that gives the majority of voting power to Zuckerberg and thus undermines shareholders and the board’s power.
“It’s his board because of the dual-class stock. There is nothing [directors] can do; neither can the shareholders and a lawsuit would yield really nothing,” he explains.
Increasingly, company founders have been opting to shore up control by creating stock ownership structures that undercut shareholder voting power, where only a decade ago almost all chose the standard and accepted one-share, one-vote model.
Now the Snap Inc. initial public offering (IPO) takes it even further with the first-ever solely non-voting stock model. It’s a stock ownership structure that further undercuts shareholder influence, undermines corporate governance and will likely shift the burden of investment grievances to the courts.
By offering stock in the company with no shareholder vote at all, Snap — the company behind the popular mobile-messaging app Snapchat that’s all about giving a voice to the many — has acknowledged that public voting power at companies with a hierarchy of stock ownership classes is only a fiction. And it begs the question: Why does Snap even need a board?
Alas, Facebook’s shares have tanked as a result of the Cambridge Analytica revelations, and it’s unclear what’s happening among the leaders at Facebook to deal with the crisis.
Facebook’s board, advises Odland, needs to get involved and help create privacy policies and if those are violated, they need to follow up.
“This is a relatively young company in a relatively young industry that has grown to be a powerhouse and incredibly important,” he explains. Given that, he says, there are “new forms of risk management this board needs to tackle.”
J’ai trouvé très intéressantes les questions qu’un nouvel administrateur pourrait se poser afin de mieux cerner les principaux facteurs liés à la bonne gouvernance d’un conseil d’administration.
Bien sûr, ce petit questionnaire peut également être utilisé par un membre de CA qui veut évaluer la qualité de la gouvernance de son propre conseil d’administration.
Les administrateurs peuvent interroger le président du conseil, les autres membres du conseil et le secrétaire corporatif.
Les douze questions énumérées ci-dessous ont fait l’objet d’une discussion lors d’une table ronde organisée par INSEAD Directors Forum du campus asiatique de Singapore.
Cet article a été publié par Noelle Ahlberg Kleiterp* sur le site de la Harvard Law School Forum on Corporate Governance.
Chaque question est accompagnée de quelques réflexions utiles pour permettre le passage à l’acte.
Bonne lecture ! Vos commentaires sont les bienvenus.
In many countries, boards of directors (particularly those of large organisations) have functioned too long as black boxes. Directors’ focus has often—and understandably so—been monopolised by a laundry list of issues to be discussed and typically approved at quarterly meetings.
The board’s own performance, effectiveness, processes and habits receive scant reflection. Many directors are happy to leave the corporate secretary with the task of keeping sight of governance best practices; certainly they do not regard it as their own responsibility.
It occurred to me later that these questions could be of broader use to directors as a framework for beginning a reassessment of their board role.
However, increased regulatory pressures are now pushing boards toward greater responsibility, transparency and self-awareness. In some countries, annual board reviews have become compulsory. In addition, mounting concerns about board diversity provide greater scope for questioning the status quo.
Achieving a more heterogeneous mix of specialisations, cultures and professional experiences entails a willingness to revise some unwritten rules that, in many instances, have governed board functions. And that is not without risk.
At the same time, the “diversity recruits” wooed for board positions may not know the explicit, let alone the implicit, rules. Some doubtless never anticipated they would be asked to join a board. Such invitations often come out of the blue, with little motivation or clarity about what is expected from the new recruit. No universal guidelines are available to aid candidates as they decide whether to accept their invitation.
Long-standing directors and outliers alike could benefit from a crash course in the fundamentals of well-run boards. This was the subject of a roundtable discussion held in February 2017 as part of the INSEAD Directors Forum on the Asia campus.
As discussion leader, I gave the participants, most of whom were recent recipients of INSEAD’s Certificate in Corporate Governance, a basic quiz designed to prompt reflection about how their board applies basic governance principles. It occurred to me later that these questions could be of broader use to directors as a framework for beginning a reassessment of their board role.
Questions and reflections
Q1) True/False: My board maintains a proper ratio of governing vs. executing.
Reflection: Recall basic principles of governance. If you are executing, who is maintaining oversight over you? Why aren’t the executive team executing and the board governing?
Q2) True/False: My board possesses the required competencies to fulfil its duties.
Reflection: Competencies can be industry-specific or universal (such as being an effective director). Many boards are reluctant to replace members, yet the needs of the organisation shift and demand new competencies, particularly in the digital age. Does your board have a director trained in corporate governance who could take the lead? Or does it adopt the outdated view of governance as a matter for the corporate secretary, perhaps in consultation with owners?
Q3) True/False: The frequency and duration of my board meetings are sufficient.
Reflection: Do you cover what you must cover and have ample time for strategy discussions? Are discussions taking place at the table that should be conducted prior to meetings?
Q4) How frequently does your chairperson meet with management: weekly, fortnightly, monthly, or otherwise?
Reflection: Meetings can be face-to-face or virtual. An alternative question is: Consider email traffic between the chair/board and management—is correspondence at set times (e.g. prior to scheduled meetings/calls) or random in terms of topic and frequency?
Q5) Is this frequency excessive, adequate or insufficient?
Reflection: Consider what is driving the frequency of the meetings (or email traffic). Is there a pressing topic that justifies more frequent interactions? Is there a lack of trust or lack of interest driving the frequency?
Q6) True/False: My board possesses the ideal mix of competencies to handle the most pressing issue on the agenda.
Reflection: If one issue continually appears on the agenda (e.g. marketing-related), there could be reason to review the board’s effectiveness with regards to this issue, and probably the mix of skills within the current board. If the necessary expertise were present at the table, could the board have resolved the issue?
Q7) True/False: The executive team is competent/capable. If “false”, is your board acting on this?
Reflection: At this point in the quiz, you should be considering whether incompetency is the issue. If so, is it being addressed? How comfortable are you, for example, that your executive team is capable of addressing digitisation?
Q8) True/False: My chairperson is effective.
Reflection: Perhaps incompetency rests with the chairperson or with a few board members. Are elements within control of the chairperson well managed? Does your board function professionally? If not, does the chair intervene and improve matters? Are you alone in your views regarding board effectiveness? A “false” answer here should lead you to take an activist role at the table to guide the chair and the board to effectiveness.
Q9) Yes/No: Does your board effectively make use of committees? If “yes”, how many and for which topics? If “no”, why not?
Reflection: Well-defined committees (e.g. audit, nomination, risk) improve the efficiency of board meetings and are a vital component of governance. In the non-profit arena, use of board committees is less common. However, non-profit boards can equally benefit from this basic guiding principle of good governance.
Q10) True/False: Recruitment/nomination of new board members adheres to a robust process.
Reflection: When are openings posted? Who reviews/targets potential candidates? How are candidate criteria determined? And is there a clear “on-boarding” process that is regularly revisited?
Q11) True/False: My board performs a board review annually.
Reflection: A board review will touch on many elements mentioned in previous questions. Obtaining buy-in for the first review might prove painful. Thereafter knowledge of an annual review will undoubtedly lead to more conscious governance and opportunities to introduce improvements (including replacement of board members). Procedurally, the review of the board as a whole should precede the review of individuals.
Q12) Think of a tough decision your board has made. Recall how the decision was reached and results were monitored. Was “fair process leadership” (FPL) at play?
Reflection: Put yourself in the shoes of a fellow board member, perhaps the one most dissatisfied with the outcome of a particular decision. Would that person agree that fair process was adhered to, despite his or her own feelings? Boards that apply fair process move on—as a team—from what is perceived to be a negative outcome for an individual board member. If decisions are made rashly and lack follow-up, FPL is not applied. Energies will quickly leave the room.
From reflection to action
Roundtable participants agreed that these questions should be applied in light of the longevity of the organisation concerned. Compared with most mature organisations, a start-up will need many more board meetings and more interactions between the board and the management team. The “exit” phase of an organisation (or a sub-part of the organisation) is another time in the lifecycle that requires intensified board involvement.
Particularly in the non-profit sector, where directors commonly work pro bono, passion for the organisational mission should be a prerequisite for all prospective board members. However, passion—in the form of a determination to see the organisation’s strategy succeed—should be a consideration for all board members and nominees, regardless of the sector.
Directors who apply the above framework and are dissatisfied with what they discover could seek solutions in their professional networks, corporate governance textbooks or a course such as INSEAD’s International Directors Programme.
If you are considering a board role, you could use the 12 questions, tweak them for your needs and evaluate your answers. Speak not only with the chair, but also with as many board members and relevant executive team members as you can. Understand your comfort level with how the board operates and applies governance principles before accepting a mandate.
Noelle Ahlberg Kleiterp, MBA, IDP-C, has worked for 25 years across three continents with companies including GE, KPMG, Andersen Consulting and Atradius. Noelle owns a sole proprietorship in Singapore and serves as a board member on a non-profit organisation in Singapore.
Le récent rapport de KPMG sur les grandes tendances en audit présente sept défis que les membres des CA, notamment les membres des comités d’audit, doivent considérer afin de bien s’acquitter de leurs responsabilités dans la gouvernance des sociétés.
Le rapport a été rédigé par des professionnels en audit de la firme KPMG ainsi que par le Conference Board du Canada.
Les sept défis abordés dans le rapport sont les suivants :
– talent et capital humain ;
– technologie et cybersécurité ;
– perturbation des modèles d’affaires ;
– paysage réglementaire en évolution ;
– incertitude politique et économique ;
– évolution des attentes en matière de présentation de l’information ;
– environnement et changements climatiques.
Je vous invite à consulter le rapport complet ci-dessous pour de plus amples informations sur chaque enjeu.
Alors que l’innovation technologique et la cybersécurité continuent d’avoir un impact croissant sur le monde des finances et des affaires à l’échelle mondiale, tant les comités d’audit que les chefs des finances reconnaissent le besoin de compter sur des talents de haut calibre pour contribuer à affronter ces défis et à en tirer parti.
Le rôle du comité d’audit est de s’assurer que l’organisation dispose des bonnes personnes possédant l’expérience et les connaissances requises, tant au niveau de la gestion et des opérations qu’au sein même de sa constitution. Il ne s’agit que de l’un des nombreux défis à avoir fait surface dans le cadre de ce troisième numéro du rapport Tendances en audit.
Les comités d’audit d’aujourd’hui ont la responsabilité d’aider les organisations à s’orienter parmi les nombreux enjeux et défis plus complexes que jamais auxquels ils font face, tout en remplissant leur mandat traditionnel de conformité et de présentation de l’information. Alors que les comités d’audit sont pleinement conscients de cette nécessité, notre rapport indique que les comités d’audit et les chefs des finances se demandent dans quelle mesure leur organisation est bien positionnée pour faire face à la gamme complète des tendances actuelles et émergentes.
Pour mettre en lumière cette préoccupation et d’autres enjeux clés, le rapport Tendances en audit se penche sur les sept défis qui suivent :
talent et capital humain;
technologie et cybersécurité;
perturbation des modèles d’affaires;
paysage réglementaire en évolution;
incertitude politique et économique;
évolution des attentes en matière de présentation de l’information;
environnement et changements climatiques.
Au fil de l’évolution des mandats et des responsabilités, ce rapport se révélera être une ressource précieuse pour l’ensemble des parties prenantes en audit.
Voici un sujet d’actualité brûlant sur le harcèlement sexuel au travail et les questions que le management des entreprises doit se poser à cet égard.
L’article publié par Arthur H. Kohn* sur le site de Harvard Law School on Corporate Governance, est très pertinent, autant pour la direction des organisations, que pour les administrateurs de sociétés.
Les auteurs présentent une série de huit (8) questions fondamentales auxquelles les responsables doivent répondre afin de bien s’acquitter de leurs responsabilités.
Il faut voir les questions comme une check-list des activités de diagnostic eu égard aux situations de harcèlement sexuel et de diverses formes d’inconduite.
J’espère que cette lecture sera utile aux gestionnaires soucieux de la qualité de l’environnement de travail des entreprises.
In recent months, sexual harassment allegations against well-known figures across a growing number of industries have become a common feature in news headlines. In the wake of these allegations, many companies have concluded that their current policies and procedures related to sexual harassment and discrimination are inadequate. Against the backdrop of this rapidly evolving landscape, companies are considering how to improve their policies and procedures not only to appropriately and effectively respond to allegations of sexual harassment, but also to deter inappropriate behavior going forward and foster an environment of openness, diversity and inclusion in their workplaces. To that end, below are 8 key questions that companies should be asking themselves in developing policies and procedures to confront sexual harassment and other forms of misconduct in today’s workplace.
The 8 Questions Companies Should Be Asking Themselves
1. Have we thought broadly, globally and proactively in developing our policies and procedures about workplace harassment?
Under both U.S. federal and state law, companies are incentivized to have policies and procedures in place that address sexual harassment and contain clear guidelines about what to do in the event an employee is sexually harassed. In addition to ensuring that their sexual harassment policies comply with applicable federal and state law, companies should consider developing other internal policies and trainings for employees and executives concerning inappropriate, offensive, or abusive behavior, including:
Policies concerning bullying, discrimination, retaliation, consensual relationships and nepotism.
Code of conduct, affirmatively establishing the expected company culture.
Trainings on unconscious bias, sensitivity in the workplace and behavioral responses to harassment and discrimination (e.g., understanding the “freeze” response to harassment).
In developing these policies and trainings, consideration should be given to the fact that the public’s perception of what constitutes harassment or inappropriate behavior has already begun, and will continue, to change. Likewise, some conduct that is unlikely to provide a basis for a legal claim against a company under the current state or federal law applicable to the company, may be the subject of future legislation. In addition, thinking not just about deterring illegal conduct but about fostering an environment in which such conduct is unlikely to occur is important. Training on unconscious bias, sensitivity in the workplace and behavioral responses to harassment and discrimination are just some ways in which the culture of a company can be improved.
As part of a comprehensive approach to developing policies on harassment, companies may also consider examining perspectives on harassment in foreign jurisdictions, including looking to local rules for guidance. Global organizations should not only adopt uniform policies across geographical areas that reflect global standards of conduct, but also should make sure that any local law requirements are adopted through addenda in relevant jurisdictions.
2. Do our employees trust the company’s procedure for reporting harassment?
If the behavior complained of is not expressly covered by a company’s sexual harassment policy or applicable law, employees may not think they have recourse through the company’s reporting procedures. Even if a company has put in place a clear procedure for reporting violations, employees may not use it if they do not trust that their complaints will be investigated thoroughly and without any repercussions. Employees may have the perception that the priorities of the individuals designated to receive complaints are more aligned with the accused or that these designated individuals have an obligation to presume innocence. Employees may moreover fear that their allegations will be perceived as overreactions or that they will face retaliation, particularly where the alleged perpetrator is a senior person or high performer. Where this is the case, employees may decide to escalate their complaints by going outside of their companies’ reporting procedures, including by sharing their stories more broadly:
through the press (Harvey Weinstein);
on social media (#MeToo);
on anonymous forums that are, or may become, open to the public (the “Sh%&ty Media Men” spreadsheet, Glassdoor.com, Blind conversation app); and
calling anonymous hotlines set up by organizations outside the company (National Organizations for Women; Equal rights advocates).
In light of this, companies should take steps to ensure that their human resources (“H.R.”) functions are sufficiently staffed and trained on how to handle concerns about harassment that they encounter outside of regular reporting channels. Companies may also consider having those in H.R. functions proactively monitor forums and other websites for allegations of harassment as a complement to their existing processes. A company’s failure to respond to allegations made in the press or on social media or to provide appropriate reporting mechanisms for harassment claims may contribute to a determination that the company has not exercised reasonable care in preventing and addressing harassment, thereby exposing the company to liability. In addition to legal risks, the publication of harassment allegations can also expose a company to reputational harm, which may be mitigated by a company’s proactive response to the allegations.
Companies should also take steps to ensure that all information concerning harassment allegations, even if not raised through the company’s reporting procedures or raised anonymously, is shared with appropriate individuals within the organization and also promptly escalated to senior management or the board. In order to comprehensively address allegations of harassment or unhealthy workplace cultures, it is essential that all known information about alleged violations be promptly and regularly escalated to senior management or the board.
3. Who is responsible for receiving complaints and do they have adequate resources and training?
Even if a company’s reporting procedures designate particular individuals as responsible for receiving complaints, employees may bring allegations to non-designated employees, including their managers and mentors. Employees may also report allegations directly to senior management. For example, recently developed apps like AllVoices enable victims of sexual harassment or discrimination to anonymously report incidents to a company’s CEO and board. Companies should thus ensure that senior management, as well as all employees and others who may receive complaints of harassment, receive training on how to respond to allegations of harassment and are well-versed on how to promptly escalate complaints within the organization. Employees should be reminded that they should never discourage someone from bringing forward an allegation of harassment and that any such allegations must be taken seriously and reported properly. As noted above, companies should also ensure that all information relevant to harassment allegations is shared with the appropriate individuals and escalated to senior management or the board on a regular basis.
Companies should also consider taking steps to assess the work environment before a complaint of harassment arises. For example, companies may consider conducting anonymous surveys of employees on their experiences in the workplace and the current harassment procedures, administering “climate assessments” in particular areas of the business, including H.R., holding skip-level meetings for senior management to gain insight into the culture at various levels of the organization, and establishing a clear open door policy to encourage openness between employees and senior management.
4. Who should be in charge of conducting investigations and do those in charge have adequate resources and independence?
Substantial consideration should be given to who is in charge of conducting an investigation into complaints of sexual harassment and to whether those directing the investigation are sufficiently independent. Companies may consider forming a committee consisting of representatives from different parts of the company to direct any harassment related investigations, including determining who should have responsibility for conducting the investigation. Depending on the nature of the allegations, an investigation by personnel in an H.R. function may be appropriate and cost effective. For allegations involving senior management or that involve pervasive behavior by a group or area within a company, a company may also consider bringing in outside counsel. In that scenario, consideration should be given to who retains the counsel and whether counsel is sufficiently independent.
Companies should also ensure that their investigations are conducted with the utmost confidentiality and assure employees that their harassment complaints are confidential and that they will be protected against retaliation. If, however, a company ultimately decides to settle with a complaining employee, it may consider reevaluating the use of non-disclosure agreements (“NDAs”), either in settlements or in existing employment contracts, which could be perceived as “hush money” or as perpetuating abusive work environments by protecting perpetrators, and which are the subject of proposed legislation in some state legislatures.
5. Has a disclosure obligation been triggered?
Additional considerations may apply with respect to responding to and preventing misconduct by senior executives. Such misconduct can create or exacerbate an abusive work environment and lead to serious reputational injury for the company. If allegations are made against an executive officer, the company should determine when and how to involve the board in dealing with those allegations. Public companies should also keep in mind that the change in employment conditions, resignation or termination of certain executives must be disclosed on a Form 8-K in the U.S., and that other foreign jurisdictions may have similar disclosure requirements.
Companies may also consider whether to review their contracts with senior executives to ensure that the contracts include provisions that require and incentivize compliance with the company’s behavioral expectations. To that end, some companies have chosen to consider, with respect to their new and existing contracts, what rights they have to terminate senior executives for cause for violations of the company’s harassment policies and to deny indemnification in such situations. One reason to consider negotiating arrangements with these protections in place is that payment of large severance packages can cause reputational harm to a company based on the perception that it is being “soft” on executives whose behavior violated its policies or rewarding executives for inappropriate behavior. On the other hand, these negotiations may present real challenges.
6. Does senior management communicate the message that harassment of any type will not be tolerated?
The adoption of strong internal codes of conduct, policies and robust procedures will have limited efficacy if senior management does not make clear that it will not tolerate harassment of any kind or by any perpetrator. Management’s failure to swiftly investigate claims of harassment or to penalize abusive behavior can exacerbate an already hostile work environment. Further, as noted above, consideration should be given to ensuring that management cannot be reasonably perceived as rewarding senior executives who do not comply with the company’s behavioral expectations or silencing victims of abuse.
Companies should encourage senior management to takes steps to facilitate openness and increased communication with their employees even before a complaint arises. Senior management should also regularly remind employees of the existence of their company’s policies and procedures related to harassment and should participate in trainings.
7. Is the board sufficiently informed on the company’s policies and procedures relating to sexual harassment?
Board members may be exposed to claims of breach of fiduciary duty following claims of sexual harassment perpetrated by executive officers or other employees of the company. In particular, public companies may face serious financial consequences following allegations of harassment at the company as a result of such claims. Boards should also be aware that there are financial risks that are not directly tied to payment of civil damages or to legal and remediation costs related to sexual harassment. The media has recently reported numerous incidents of allegations where executives have been accused of sexual harassment and other misconduct, and the companies have seen their stock price fall or lost advertising revenue, customers and business opportunities. In light of these risks and, most importantly, to protect the safety of the company’s employees, the board should periodically review the company’s sexual harassment policies, including training and reporting channels. The board should also ensure that it is being informed of violations of these policies, as appropriate, and has a sense of the day-to-day workplace culture as it relates to sexual harassment and other forms of inappropriate workplace behavior.
8. Does the company have effective standards, policies and processes, including diligence processes, to address sexual harassment issues at potential investment targets and existing subsidiaries and/or portfolio companies?
Companies may face major reputational and financial repercussions based on the misconduct of other companies that they have acquired or in which they have invested. During the diligence process, consideration should be given to inquiring into the target’s or partner’s implementation and maintenance of harassment policies and procedures, the existence of appropriate controls, and whether the investment target or its key personnel have a history of incidents, investigations or allegations of harassment issues. In addition, in appropriate circumstances, consideration should be given to engaging local counsel for investments outside the U.S. to consider whether the company’s policies comply with applicable local rules, and the impact any non-compliance could have post acquisition.
Private equity sponsors and other similar organizations should consider reevaluating policies and procedures at existing portfolio companies and subsidiaries in light of recent developments, and may further consider putting in place reporting requirements to ensure that portfolio companies and subsidiaries have implemented effective policies and ongoing training. Companies may also consider steps that can be taken internally to effectively implement appropriate policies, procedures, and training at their portfolio companies and subsidiaries. For example, consideration should be given to whether a company can leverage its own practices and policies across its portfolio companies and subsidiaries.
Conclusion
Sexual harassment related allegations are increasingly making headlines and rapidly changing perceptions concerning harassment and abusive behaviors. While the allegations initially centered on the entertainment industry, sexual harassment in the workplace has now become a major issue in a growing number of industries, including technology and finance. Companies across all industries are responding by developing strategies for tackling harassment in the workplace and minimizing risk by implementing strong policies, procedures, and complaint systems. To do so, it is essential that companies ask the right questions.
L’une des questions prédominantes — et souvent controversées — dans l’évaluation des principes de saine gouvernance concerne l’indépendance des administrateurs.
L’Institut sur la gouvernance (IGOPP) propose une approche nouvelle et originale sur la question de l’indépendance des membres des conseils d’administration.
Dans un document « L’indépendance des conseils : un enjeu de légitimité », l’IGOPP propose que toute organisation dotée d’un conseil d’administration cherche à constituer un conseil qui soit à la fois légitime et crédible.
L’enjeu n’est pas tellement l’indépendance des conseils mais bien leur légitimité et leur crédibilité. La qualité d’indépendance ne prend son sens que si elle contribue à rehausser la légitimité d’un conseil.
C’est par sa légitimité qu’un conseil acquiert le droit et l’autorité de s’imposer à la direction d’une organisation. Les conseils d’organisations publiques ou privées, sans actionnaire ou sans actionnaire actif détenant plus de 10 % du capital-actions ordinaire, devraient être composés d’une majorité nette d’administrateurs indépendants. De plus, tous leurs comités statutaires devraient être composés exclusivement de membres indépendants.
L’article ci-dessous, écrit à la suite d’une table ronde réunissant plusieurs spécialistes de la gouvernance européenne, aborde trois sujets incontournables, en tentant de tirer des enseignements pour le futur :
(1) l’indépendance des administrateurs et la pertinence du concept
(2) les divers aspects de la rémunération et les obligations fiduciaires
(3) l’identification des actionnaires et les questions de procuration des votes
Dans ce billet, nous vous proposons les questionnements reliés à l’indépendance des administrateurs.
L’indépendance est-elle une bonne idée ?
Quels sont les problèmes liés à l’indépendance ?
Quels sont les résultats de recherche qui montrent que l’indépendance améliore la qualité de la gouvernance ?
Comment composer avec l’influence des gestionnaires et des conflits d’intérêts ?
L’article publié par Christian Strenger*est paru sur le site de Harvard Law School Forum on Corporate Govervance.
Alors, selon vous, pourquoi l’indépendance des administrateurs est-elle un gage de bonne gouvernance ?
Bonne lecture ! Vos commentaires sont les bienvenus.
L’indépendance des administrateurs : panacée ou boîte de Pandore?
Board Independence: the Quality Question and dealing with Insider Issues
Background
A reliable formula for board effectiveness has been elusive, but the importance of effective boards warrants ongoing reflection and research by both academics and practitioners.
In spite of the diversity of governance models around the world, the concept of independence plays a prominent role in most, if not all, codes of governance globally as an intrinsic component of good board structure. For example, independence features, to varying degrees of emphasis, in the governance frameworks of the US, UK, Germany and Japan. It is also reflected in global frameworks, such as the ICGN Global Governance Principles or the OECD Corporate Governance Principles.
But what does independence mean in a corporate governance context, and does it deliver what we want it to? This session seeks to challenge how we think about independence and addresses several fundamental questions relating to boards and corporate governance:
Is board independence essential to quality in corporate governance—or is independence simply a placebo that doesn’t do anything but makes us feel better?
What do we expect board independence to achieve in practical terms?
Are independent directors really in a position to monitor and control corporate insiders?
These are questions that have relevance for company managers and directors, but also for investors, regulators and stakeholders.
Role of boards
A company’s board of directors is at the core of its corporate governance. Boards play a range of advisory and control functions. This includes strategic direction and risk/control oversight, along with the monitoring and reward of executive management.
At a more overarching level, agency theory suggests that one of the key roles of the board is to serve as an agent protecting the interests of shareholders vis-à-vis company management or controlling owners. This reflects a duty of care to support the company’s long-term success and sustainable value creation and to ensure the alignment of interests between management, controlling owners, minority investors—taking into account stakeholder interests as well.
Why is independence a good idea?
Shareholders and other stakeholders expect boards to have the ability and authority to think and act independently from company executives or controlling owners. The board may be unable to serve effectively in its agency role if its directors’ judgements are not free of conflicts or any other external influence other than promoting the long-term success of the firm.
What are the problems related to independence?
It is important to recognise that independence has to be looked at in the context of how it affects board processes, decisions and overall governance. Yet spite of the inherent virtues of independence, its realisation in practice is not an easy fix; nor does it intrinsically enhance board effectiveness. A director must be able to contribute something other than independence alone, whether that is in the form of sector knowledge, commercial experience, international experience, technical skills or other areas that support the board’s oversight of company management.
Moreover, independence is ultimately a state of mind, not a product of definitions. There are many different sets of criteria that seek to define independence for individual directors. While these sorts of criteria can be useful, they can also be crude, misleading or incomplete.
The Lehman Brothers board in 2008, the year of its demise, was an example of a nominally independent board. But was this board able to operate independently of a strong Chair/CEO? Was there enough financial sector expertise amongst this group of independent directors to provide a rigorous challenge? (See Annex 1 in the complete publication).
Does independence ensure quality? What is the evidence?
Independence may be real, but it can be hard, if not impossible, to measure in a meaningful way. It is much easier to measure structural features of boards than it is to measure the quality of board processes. But sometimes what is easily measurable is not worth measuring. So while it is possible (and very common) to calculate simple ratios, such as independent directors/total directors a common gauge of board independence, they may not tell us much. Indeed, the evidence of empirical studies using simplistic/conventional measures of independence has been inconclusive (See Annex 2).
Many board attributes, including independence, which are regarded as “best practice” lack clear empirical grounding, at least in an econometric context. So, in many features of our corporate governance codes we are dealing in effect with opinions more than facts.
How to deal with insider influence and vested interests?
Insider influences can vary depending on the nature of the company. For widely-held companies, the vested interests of executive management often take the form of high pay for limited performance. In controlled companies vested interests may be the controlling owners themselves in terms of entrenchment and self-dealing.
Are independent directors really equipped to challenge these insiders? Or is that possibly asking for a bit too much? The empirical evidence cited above suggests that independent directors may not have a meaningful impact on board governance. But the evidence does suggest in the area of audit committees that independence is important. This makes logical sense, but it also suggests that for an independent director to provide meaningful oversight, independence must be combined with other important attributes, including sectoral knowledge and financial expertise. Independence as a determinant of board effectiveness therefore may be a necessary, but not a sufficient, condition.
Conclusion
We need to recognise that independence may be overrated, or at least not always live up to its billing. At least as it is conventionally defined, independence has not proven to be a panacea or silver bullet to ensure good corporate governance. At the same time, however, the concept of board independence is important and worth preserving, if nothing else as an aspirational ideal.
Discussion Results
Independent directors seem to be an intuitive solution for the agency problem stemming from the separation of ownership and control, but also for limiting the power of controlling shareholders in a corporation.
The starting point of the discussion was: Why do we need independence in the first place? As investors and other stakeholders want to see their interests served and protected by the board, the absence of potential conflicts of interest between non-executive directors and managers or undue influence from a major shareholder are the answers. Disclosure of meaningful ties of the non-executive directors to the management or controlling shareholders is important. The discussion also emphasized that reasonable diversity can be a contributing factor for board independence, and that truly independent board members can play a key role in avoiding too much convergence in decision making, as well as in focusing on the well-being of the company itself, and not any separate vested interests. While the discussion highlighted many benefits of board independence, it also pointed to potential costs: board independence may come with costs relating to problems in information flows, access to information and processing. Thus, it is important to complement board independence with proper board procedures and processes.
A key point of the discussion was the definition of independence itself. Besides the obligatory disclosure of relevant ties of a non-executive board member to management or controlling shareholders, regulators tried to formalize criteria to define independent board members. Academic literature also strives to evaluate how predefined criteria affect company decisions. However, results of these efforts are mixed and can hardly achieve “true” independence. The description of certain characteristics could introduce independence on paper, but may not reflect correctly the individual case of a board member. A predefined strict categorization would in practice suffer from a “ticking the box” approach. Independence from a controlling shareholder is equally hard to define as thresholds for shareholdings may not reflect the individual circumstances. The discussion also highlighted that strict definitions of independence might also require companies to replace experienced board members with new independent board members. That could lead to a temporary loss of experience and industry expertise.
Ways for the Future:
The realistic description of board independence needs a detailed assessment of the individual and a disclosure of ties of a non-executive board member to the management or controlling shareholders. Furthermore, disclosure of the selection process of the nomination committee should bring important insights for investors and the stakeholders.
The discussion further emphasized that formal characteristics alone could be misleading to determine the independence of a board member, focusing on “independence in mind” as an important aspect. As this factor is difficult to gauge or measure, investors may have to communicate with the chair in individual cases.
A sensible and company specific skillset of personnel management, industry knowledge and experience must be represented in the board as a priority, as formal independence alone is not a sufficient prerequisite for the selection process. The discussion emphasized that extensive information is key to allow proper evaluation of true independence. This should be complemented by sufficient access to the chair for communication with investors. The latest German code revision emphasizes that chairs make themselves available to investors for such supervisory board related issues.
Ways for the Future:
Full disclosure of important ties between individual board members with management and controlling shareholders should be obligatory. To properly evaluate the board member proposals, the disclosure of the skillsets of board members and the selection process would bring further important insights for investors. An idea proposed to support the process was the development of a “board skills matrix” for individual boards.
The discussion highlighted the key role of the nomination committee in the identificatio n and evaluation of independent directors. It was therefore suggested that the chair of the nomination committee should make himself available to investors. This point was controversially discussed due to possible loss of a “One Voice” communication strategy, so that communication should be confined to the chair of the supervisory board.
Another important point of the discussion was the regular evaluation of non-executive board members, as this may bring improvements for independent guidance and decision making of the full board. It could also identify areas of strength and weaknesses for an improved performance of both boards. A key prerequisite for a successful evaluation is the independence of the conducting leader.
The discussants raised the issue of the differences emerging from national governance environments, such as different shareholder structures and cultural differences. While the Anglo American approach to independence appears to work in the UK, this differs from continental European countries such as Germany and France.
Ways for the Future:
A solution to cross-country differences is the development of “local optima” that reflect the special circumstances in each country, rather from pursuing a “one fits all” approach.
Conclusion
The participants concluded that board independence remains a central issue in the corporate governance debate. The discussion identified definition issues as critical. It was also highlighted that full disclosure of the individual independence is important. Formal independence alone does not ensure board or director effectiveness. It must be accompanied with skills, knowledge and experience to obtain satisfactory board work results. Disclosure on the individual board members’ selection process and independence characteristics should be made available to investors and the other stakeholders.
*Christian Strengeris Academic Director at the Center for Corporate Governance at HHL Leipzig Graduate School of Management. This post is based on a publication by Mr. Strenger and Jörg Rochell, President and Managing Director at ESMT Berlin, for a symposium held in Berlin on November 9, 2017, sponsored by ESMT Berlin and the Center for Corporate Governance at HHL Leipzig Graduate School of Management.
Voici un article très intéressant qui présente une vision différente de la gouvernance à l’« Américaine ».
Les auteurs XAVIER HOLLANDTS et BERTRAND VALIORGUE sont enseignants-chercheurs en stratégie et gouvernance des entreprises. L’article vient de paraître sur le site LesEchos.fr.
Le projet français de loi « Pacte » a pour objectif de repenser les grandes notions de gouvernance, notamment la place de la participation des salariés à titre d’administrateur à part entière.
L’article examine trois idées reçues qu’il est important de bien élucider :
(1) la participation permet d’équilibrer le rapport capital/travail
(2) la participation améliore le dialogue social
(3) la participation améliore la performance
Bonne lecture ! Vos commentaires sont les bienvenus.
Voilà de quelle manière les auteurs concluent leur article :
Compte tenu de ces éléments, faut-il promouvoir la participation des salariés à la gouvernance des entreprises ? Oui car l’accroissement de cette participation nous semble nécessaire pour deux raisons. L’arrivée d’administrateurs élus par les salariés au sein des conseils d’administration va permettre de recentrer les discussions sur l’entreprise, son projet stratégique, les investissements de long terme et son apport au progrès social et environnemental. Cette arrivée va redonner tout leur sens et prérogatives aux conseils d’administration.
La participation des salariés à la gouvernance va en outre apporter des éclairages et des moyens nouveaux pour gérer l’actif clé de la performance des entreprises : le capital humain. Les administrateurs salariés vont aider les dirigeants à mieux prendre en compte et développer cet actif qui est facteur majeur de compétitivité, d’innovation et de performance durable. On objectera alors que d’autres parties prenantes jouent aussi un rôle clé dans le processus de création de valeur et que leur présence au sein des conseils d’administration serait bienvenue. Ceux-là n’auraient pas tort.
Les résultats sont présentés sous forme de questions relatives à la sécurité informatique :
Le CA doit-il être le responsable de la surveillance de cette activité ?
Votre CA nécessite-t-il plus d’expertise dans le domaine de la cybersécurité ?
Avons-nous toutes les compétences requises au sein du CA ?
Possédons-nous les informations nécessaires pour la supervision des risques de cybersécurité ?
Le CA, et notamment son président, a-t-il développé un niveau de relation ouverte avec le responsable des technologies (CISO) ?
Comment savoir si les contrôles mis en place pour prévenir les brèches dans les systèmes sont efficaces ?
Les auteurs donnent un exemple de tableau de bord utile pour les CA :
Despite how pervasive the threats are, 44% of the 9,500 executives surveyed in PwC’s 2018 Global State of Information Security® Survey say they don’t have an overall information security strategy. That gives you a sense of how much work companies still need to do. Overseeing cyber risk is a huge challenge, but we have ideas for how directors can tackle cybersecurity head-on.
L’article présente également une mine d’informations eu égard aux enjeux, aux défis et aux actions qu’un CA doit entreprendre pour assurer une solide sécurité informatique.
Je vous invite à lire les conclusions de l’étude de PwC ci-dessous. Pour plus d’information sur ce sujet, vous pouvez consulter le rapport complet.
Directors can add value as their companies struggle to tackle cyber risk. We put the threat environment in context for you and outline the top issues confronting companies and boards. And we identify concrete steps for boards to up their game in this complex area.
You don’t need us to tell you that cyber threats are everywhere. Breaches make headlines on
what seems like a daily basis. They also cost companies—in money and reputation. Indeed, cyber threats are among US CEOs’ top concerns, according to PwC’s 20th Global CEO Survey.
The pace of cyber breaches isn’t slowing. In part, we’re making it too easy for attackers. How? Employees fall for sophisticated phishing schemes, neglect to install security updates or use weak passwords. We are also doing more work on mobile devices, which tend not to be as well protected. And companies don’t always invest enough in cybersecurity or patch their systems promptly when problems are discovered.
The nature of cyber threats is also evolving. The self-propagating WannaCry attack, for instance, could infect a computer even if the user didn’t click on the link. Indeed, 2017 saw a number of major ransomware attacks that froze computer systems—keeping some companies offline for weeks.
Despite how pervasive the threats are, 44% of the 9,500 executives surveyed in PwC’s 2018 Global State of Information Security® Survey say they don’t have an overall information security strategy. That gives you a sense of how much work companies still need to do. Overseeing cyber risk is a huge challenge, but we have ideas for how directors can tackle cybersecurity head-on.
Challenge:
How can our board understand whether management’s cybersecurity and IT program reduces the risk of a major cyberattack or data breach—or actually makes the company more vulnerable?
Many directors are not confident that management has a handle on cyber threats. PwC’s 2017 Annual Corporate Directors Survey found that only 39% of directors are very comfortable that their company has identified its most valuable and sensitive digital assets. And a quarter had little or no faith at all that their company has identified who might attack.
There are obviously many moving parts that management needs to get right. Many companies align their programs and investments with a cybersecurity framework to help ensure they’re addressing everything they should.
For a board to oversee cyber risks effectively, it needs the right information on how the company addresses those risks. But 63% of directors say they’re not very comfortable that their company is providing the board with adequate cybersecurity metrics. [1]
Boards also shortchange the time they give to discussing cyber risks. We often see board agendas allocate relatively little time to the topic.
Another part of the challenge is that few boards have directors with current technology or cybersecurity expertise. And that puts directors at a disadvantage in being able to figure out if management is doing enough to address this area of significant risk.
Why does cybersecurity often break down in companies?
Common issues
Why they matter
There’s no inventory of the company’s digital assets
Companies can’t protect assets they don’t know about. Management should be able to explain what information and data they hold, why it’s needed, where it is (within the company’s systems or with third parties) and whether it’s properly protected. They should also know which data is most valuable (the crown jewels).
The company doesn’t know which third parties it digitally connects with
A company may interact—and even share sensitive information—with thousands of suppliers and contractors. Hackers often target these third parties as a way to get into a company’s network. Yet more than half of companies don’t keep a comprehensive inventory of the third parties they share sensitive information with. [2]
The company hasn’t identified who is most likely to come after its data
Knowing who might attack helps the company better anticipate how they might attack. That in turn may help the company put up better defenses.
The company has poor cyber hygiene
Systems that aren’t properly configured are more vulnerable to attacks. So companies should employ leading practices, like multi-factor authentication, to protect highly sensitive information. They also need to do the basics right—like removing access on a timely basis for people who leave the company or change jobs.
The company hasn’t patched known system vulnerabilities
System vulnerabilities are being uncovered constantly. But not all software companies push out patches to users. So the company needs to ensure someone regularly monitors to see if patch updates are available. And then make sure those fixes get made.
The company has a wide attack surface
Providing more ways to access company systems makes things easier for employees, customers and third parties. And for hackers. So companies need stronger controls (such as multi-factor authentication). And they need to increase their monitoring for suspicious activity.
Employees aren’t trained on their role in security
Current employees are the top source of security incidents—whether intentional or not. [3] Yet only half (52%) of executives say their company has an employee security awareness training program. [4]
Cybersecurity is viewed as the CISO’s responsibility
A chief information security officer (CISO) can’t do the job alone. Other groups like Infrastructure or Operations need to cooperate and provide resources to address cyber issues.
Board action:
Focus on getting the right information and building relationships with the company’s tech and security leaders so you get a better sense of whether management is doing enough
This is a really tough area to oversee. Here are a number of questions to help as you address it.
1. Since cybersecurity is really a business issue, should the full board oversee it?
Half of directors say their audit committee is responsible for cyber risk, and 16% give it to either a separate risk committee or a separate IT committee. Only 30% say it’s a full board responsibility. [5] If the full board doesn’t want to oversee cyber risk, ensure that, at a minimum, whichever committee is assigned the responsibility provides regular and comprehensive reporting up to the whole board. And consider moving it from the already overloaded audit committee to another board committee.
2. Does our board need greater cybersecurity or technology expertise?
For some companies, the answer will be to recruit a director with serious expertise in cybersecurity. But others won’t choose to close their skill gap by adding a new director. People with these skills are hard to find, especially since the technology landscape is changing so quickly. Some boards may not have room to add another member. Others may not want to add someone with such specific expertise unless they’re confident that person could handle other board matters as well. So instead they look for other ways to address any gap, including continuing education and using outside advisors.
3. Is everyone in the room who needs to be?
The cybersecurity discussion should include business, technology and risk management leaders—as well as the CEO and CFO. Why? For one, it reinforces that cyber is an enterprise-wide issue—and that directors expect everyone to be accountable for managing the risk. The discussion also may expose other areas where there are security gaps. For example, while a CISO will often cover IT, many industrial organizations also need to protect OT—the operational technology that directs what happens in physical plants or processes. So if the CISO isn’t covering OT, the board needs to hear from whoever is.
4. Do we have the information we need to oversee cyber risk?
First, consider whether you have the basic information you need on the company’s IT environment. Without this background, it’s tough to make sense of the level of risk the company faces. There are a few key areas:
The nature of the company’s systems.
Are they developed in-house, purchased and customized or in the cloud?
Are any no longer supported by vendors?
Is the company running multiple versions of key systems in different divisions?
To what extent has the company integrated the systems of companies it acquired?
The security resources.
Where does IT security report?
What are IT security’s resources and budget? How do they compare to industry benchmarks?
Has the company adopted a cybersecurity framework (e.g., NIST, ISO 27001)?
This type of basic information doesn’t change much, so directors likely only need periodic refreshers.
On the other hand, directors will want more frequent reporting on what does change. Each company needs to figure out which items—quantitative and qualitative—are most relevant. It’s also helpful for directors to see whether management believes cyber risk is increasing, stable or decreasing.
A good dashboard gives directors an at-a-glance understanding of the state of the company’s cyber risk. There are a number of different approaches to assembling a dashboard. One is to simply classify issues between external and internal factors, like the example we show below.
If boards sense the dashboard isn’t giving a complete or accurate picture, they shouldn’t be afraid to challenge what’s presented in it. Read more to find out how.
Example of what a dashboard might look like
5. Have we built a relationship that allows the CISO to be candid with us?
The CISO has a lot of responsibility but doesn’t always have the authority to insist that other technology and business leaders fall in line. A strong relationship with the board helps the CISO feel comfortable giving directors the true picture (warts and all) of cyber risks, including his or her views on whether resources are adequate. Periodic private sessions with the CISO are a key part of understanding whether the company is doing enough to manage these risks.
6. How can we know whether the controls and processes designed to prevent data breaches are working?
Speaking to objective groups, such as internal audit, can offer the board different perspectives. The board may also want to hire its own outside consultants to periodically review the state of cybersecurity at the company and report back to the board.
How can directors improve their knowledge of cybersecurity?
Hold deep-dive discussions about the company’s situation. That could include the company’s cybersecurity strategy, the types of cyber threats facing the company and the nature of the company’s “crown jewels.”
Attend external programs. There are a number of conferences that focus on the oversight of cyber risk.
Ask management what it has learned from connecting with peers and industry groups.
Ask law enforcement (e.g., the FBI) and other experts to present on the threat environment, attack trends and common vulnerabilities. Then discuss with management how the company is addressing these developments.
Challenge:
Given that companies are under constant attack, how can directors understand whether their company is adequately prepared to handle a breach?
No company is immune to the threat of a breach. One particularly scary aspect of cybersecurity is that companies may only know they’ve been breached when an outside party, such as the FBI, notifies them. Then there’s the question of what the company needs to do once it discovers a breach. Obviously it needs to investigate and patch its systems. But there’s much more.
Nearly all US states and many countries have laws requiring entities to notify individuals when there’s been a security breach involving personally identifiable information. These laws often set a deadline for notification—sometimes as short as 72 hours. The data breach notification laws change from time to time, making it a challenge to keep up to date. Separately, companies should also consider any potential SEC disclosure requirements regarding cyber risks and incidents.
Breaches can mean significant fines from regulatory agencies, as well as class-action lawsuits. They can also damage a company’s reputation and brand—resulting in loss of customers, as well as investors possibly losing confidence in the company. And as we have seen with some breaches, senior executives can lose their jobs.
Breaches also mean more costs to companies—to investigate, remediate and compensate those who were harmed. Only half of US companies have cyber insurance, [6] despite the growing number and size of incidents. In part, there’s still some skepticism on how claims will be covered.
Given how likely a breach is and how much companies need to do to respond, it’s surprising that 54% of executives say their companies don’t have an incident response plan. [7] Yet companies that responded well to a breach—thanks to better preparation—usually come out of the crisis better than those that had to scramble.
Board action:
Regularly review the breach and crisis management plan and lessons learned from management’s testing
It’s important to ask management about the company’s cyber incident response and crisis management plan on a regular basis. If there isn’t one, press management for a timeline to develop and test one.
If there is a plan, discuss what it entails and how the company intends to continue operating in the event of a disruptive attack. It should also identify everyone who needs to be involved, which could include the communications team, finance leaders, business leaders, legal counsel and the broader crisis response team, as well as IT specialists. The plan should specify which external resources are on retainer to support the internal teams. And who the company will work with on the law enforcement side.
A key part of the plan should cover breach notification and escalation procedures. When will the board be notified? What is the company’s plan to inform regulators? How and when will other stakeholders—including individuals whose personal information may have been lost—be informed?
Also ask management about plan testing and what changes were made as a result of the last test. Some directors even observe or participate in tabletop testing exercises to get a better appreciation for how management plans to address a cyber crisis.
Finally, have management explain if it has updated controls or recovery plans based on recent incidents at other organizations.
In conclusion…
As cyber threats persist, boards recognize they need to step up their cyber risk oversight. That starts when directors recognize that the responsibility for handling cyber risk goes well beyond the CISO. How? By insisting that cybersecurity be a business discussion, with the right senior executives in the room and a sophisticated understanding of the threats.
7PwC, Global State of Information Security® Survey 2018, October 2017.(go back)
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*Paula Loop is Leader at the Governance Insights Center, Catherine Bromilow is Partner at the Governance Insights Center, and Sean Joyce is US Cybersecurity and Privacy Leader at PricewaterhouseCoopers LLP. This post is based on a PwC publication by Ms. Loop, Ms. Bromilow, and Mr. Joyce.
Quels sont les principes fondamentaux de la bonne gouvernance ? Voilà un sujet bien d’actualité, une question fréquemment posée, qui appelle, trop souvent, des réponses complexes et peu utiles pour ceux qui siègent à des conseils d’administration.
Je partage avec vous un billet qui a été publié il y a plusieurs années et qui, en 2018, est encore consulté par des milliers de lecteurs de mon blogue.
L’article de Jo Iwasaki, paru sur le site du NewStateman, a l’avantage de résumer très succinctement les cinq (5) grands principes qui doivent animer et inspirer les administrateurs de sociétés.
Bonne lecture !
Les principes évoqués dans l’article sont simples et directs ; ils peuvent même paraître simplistes, mais, à mon avis, ils devraient servir de puissants guides de référence à tous les administrateurs de sociétés.
Les cinq principes retenus dans l’article sont les suivants :
Un solide engagement du conseil (leadership) ;
Une grande capacité d’action liée au mix de compétences, expertises et savoir-être ;
Une reddition de compte efficace envers les parties prenantes ;
Un objectif de création de valeur et une distribution équitable entre les principaux artisans de la réussite ;
De solides valeurs d’intégrité et de transparence susceptibles de faire l’objet d’un examen minutieux de la part des parties prenantes.
« What board members need to remind themselves is that they are collectively responsible for the long-term success of their company. This may sound obvious but it is not always recognised ».
« Our suggestion is to get back to the fundamental principles of good governance which board members should bear in mind in carrying out their responsibilities. If there are just a few, simple and short principles, board members can easily refer to them when making decisions without losing focus. Such a process should be open and dynamic.
In ICAEW’s recent paper (The Institute of Chartered Accountants in England and Wales) What are the overarching principles of corporate governance?, we proposed five such principles of corporate governance.
Leadership
An effective board should head each company. The Board should steer the company to meet its business purpose in both the short and long term.
Capability
The Board should have an appropriate mix of skills, experience and independence to enable its members to discharge their duties and responsibilities effectively.
Accountability
The Board should communicate to the company’s shareholders and other stakeholders, at regular intervals, a fair, balanced and understandable assessment of how the company is achieving its business purpose and meeting its other responsibilities.
Sustainability
The Board should guide the business to create value and allocate it fairly and sustainably to reinvestment and distributions to stakeholders, including shareholders, directors, employees and customers.
Integrity
The Board should lead the company to conduct its business in a fair and transparent manner that can withstand scrutiny by stakeholders.
We kept them short, with purpose, but we also kept them aspirational. None of them should be a surprise – they might be just like you have on your board. Well, why not share and exchange our ideas – the more we debate, the better we remember the principles which guide our own behaviour ».
La transparence laisse paraître la réalité tout entière, sans qu’elle soit altérée ou biaisée. Il n’existe d’autre principe plus vertueux que la transparence de l’acte administratif par l’administrateur qui exerce un pouvoir au nom de son détenteur ; celui qui est investi d’un pouvoir doit rendre compte de ses actes à son auteur.
Essentiellement, l’administrateur doit rendre compte de sa gestion au mandant ou autre personne ou groupe désigné, par exemple, à un conseil d’administration, à un comité de surveillance ou à un vérificateur. L’administrateur doit également agir de façon transparente envers les tiers ou les préposés pouvant être affectés par ses actes dans la mesure où le mandant le permet et qu’il n’en subit aucun préjudice.
La continuité
La continuité est ce qui permet à l’administration de poursuivre ses activités sans interruption. Elle implique l’obligation du mandataire de passer les pouvoirs aux personnes et aux intervenants désignés pour qu’ils puissent remplir leurs obligations adéquatement.
La continuité englobe aussi une perspective temporelle. L’administrateur doit choisir des avenues et des solutions qui favorisent la survie ou la croissance à long terme de la société qu’il gère. En ce qui concerne la saine gestion, l’atteinte des objectifs à court terme ne doit pas menacer la viabilité d’une organisation à plus long terme.
L’efficience
L’efficience allie efficacité, c’est-à-dire, l’atteinte de résultats et l’optimisation des ressources dans la pose d’actes administratifs. L’administrateur efficient vise le rendement optimal de la société dont il a la charge et maximise l’utilisation des ressources à sa disposition, dans le respect de l’environnement et de la qualité de vie.
Conscient de l’accès limité aux ressources, l’administrateur met tout en œuvre pour les utiliser avec diligence, parcimonie et doigté dans le but d’atteindre les résultats anticipés. L’absence d’une utilisation judicieuse des ressources constitue une négligence, une faute qui porte préjudice aux commettants.
L’équilibre
L’équilibre découle de la juste proportion entre force et idées opposées, d’où résulte l’harmonie contributrice de la saine gestion des sociétés. L’équilibre se traduit chez l’administrateur par l’utilisation dynamique de moyens, de contraintes et de limites imposées par l’environnement en constante évolution.
Pour atteindre l’équilibre, l’administrateur dirigeant doit mettre en place des mécanismes permettant de répartir et balancer l’exercice du pouvoir. Cette pratique ne vise pas la dilution du pouvoir, mais bien une répartition adéquate entre des fonctions nécessitant des compétences et des habiletés différentes.
L’équité
L’équité réfère à ce qui est foncièrement juste. Plusieurs applications relatives à l’équité sont enchâssées dans la Charte canadienne des droits et libertés de la Loi canadienne sur les droits de la personne et dans la Charte québécoise des droits et libertés de la personne. L’administrateur doit faire en sorte de gérer en respect des lois afin de prévenir l’exercice abusif ou arbitraire du pouvoir.
L’abnégation
L’abnégation fait référence à une personne qui renonce à tout avantage ou intérêt personnel autres que ceux qui lui sont accordés par contrat ou établis dans le cadre de ses fonctions d’administrateur.
Les investisseurs institutionnels (II) cherchent constamment à améliorer leur portefeuille d’entreprises dans une perspective à long terme.
Ainsi, les II sont à la recherche de moyens pour communiquer efficacement avec les sociétés dans lesquelles elles investissent.
L’étude menée par Steve W. Klemash, leader du EY Center for Board Matters, auprès de 60 grands investisseurs institutionnels américains tous azimuts, a tenté de déterminer les cinq plus importantes priorités à accorder aux choix des entreprises sous gestion.
Voici donc les cinq grands thèmes qui intéressent les investisseurs institutionnels dans la sélection des entreprises :
(1) La composition du conseil d’administration, avec un œil sur l’amélioration de la diversité ;
(2) Un niveau d’expertise des administrateurs qui est en lien avec les objectifs d’affaires de l’entreprise ;
(3) Une attention accrue accordée aux risques de nature climatique ou environnemental ;
(4) Une attention marquée accordée à la gestion des talents
(5) Une rémunération qui est très bien alignée sur la performance et la stratégie.
Je vous propose un résumé des principaux résultats de travaux de recherche de EY. Pour plus de détails, je vous invite à consulter l’article ci-dessous.
Les cinq grandes priorités des investisseurs institutionnels en 2018
1. La composition du conseil d’administration, avec un œil sur l’amélioration de la diversité
2. Un niveau d’expertise des administrateurs qui est en lien avec les objectifs d’affaires de l’entreprise
3. Une attention accrue accordée aux risques de nature climatique ou environnemental
4. Une attention marquée accordée à la gestion des talents
5. Une rémunération qui est très bien alignée sur la performance et la stratégie
Investor priorities as seen through the shareholder proposal lens
For a broader perspective of investor priorities, a review of the top shareholder proposal topics of 2017, based on average support, shows that around half focus on environment and social topics. While the average support for many of these proposal topics appear low, this understates impact. Environmental and social proposals typically see withdrawal rates of around one-third, primarily due to company-investor successes in reaching agreement. Depending on the company situation and specific proposal being voted, some proposals may receive strong support of votes cast by a company’s broader base of investors.
Conclusion
Institutional investors are increasingly asking companies about how they are navigating changing business environments, technological disruption and environmental challenges to achieve long-term, sustained growth. By addressing these same topics in their interactions with and disclosures to investors, boards and executives have an opportunity to highlight to investors how the company is positioned to navigate business transformations over the short- and long-term. This opportunity, in turn, enables companies to attract the kind of investors that support the approach taken by the board and management. Like strong board composition, enhanced disclosure and investor engagement efforts can serve as competitive advantages.
Questions for the board to consider
– Are there opportunities to strengthen disclosures around the board’s composition and director qualifications and how these support company strategy?
– Do the board and its committees have appropriate access to deep, timely expertise and open communication channels with management as needed for effective oversight?
– Do the board and management understand how key investors generally view the company’s disclosures and strategic initiatives regarding environmental and social matters?
– How does the board define and articulate its oversight responsibilities with regard to talent? And does the board believe that the company has an adequate plan for talent management considering recent employee and employment-related developments and the company’s competitive position?
– To what extent have the board and management offered to dialogue with the governance specialists at their key investor organizations, whether active or passive, and including the largest and smallest, vocal shareholder proponents?
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*Steve W. Klemash* is EY Americas Leader at the EY Center for Board Matters. This post is based on an EY publication by Mr. Klemash.
Voici une étude d’Equilar qui montre une diminution constante dans la durée d’exercice des CEO aux États-Unis au cours des 5 dernières années.
Le rapport a été publié par Dan Marcec directeur des communications de la firme.
Ainsi, la présence en poste des CEO est passée d’une médiane de 6 ans, en 2013, à 5 ans, en 2017.
On note également que plus du quart des CEO restent en poste plus de 10 ans, comparativement à 38,1 % qui sont en poste entre un an et cinq ans.
L’article présente également un tableau qui montre les raisons des départs des CEO : (1) démissions (2) retraites (3) congédiement. On note que seulement 10 CEO ont été congédiés sur une période de dix ans. On peut dire que l’emploi est assez stable !
Enfin, l’étude montre que l’accroissement du taux des départs n’a pas donné lieu à des progrès dans le cadre de la diversité. En effet, comme le montre le tableau suivant, le nombre de femmes CEO de grandes entreprises est passé de 3,7 %, en 2013, à 5,6 % en 2017. La fonction de CEO dans ces entreprises est encore réservée presque exclusivement aux hommes.
Vous pouvez prendre connaissance de cet article paru sur le site du Harvard Law School Forum :
Ma veille en gouvernance m’amène à vous proposer la lecture d’un article publié par Demi Derem* et Elizabeth Maiellano sur les défis posés par un ensemble de directives récemment approuvées par le Parlement européen et qui traitent du droit des actionnaires : « Shareholder Rights Directive (SRD) ».
La Commission Européenne (CE) veut que les entreprises cotées aient une meilleure connaissance de leurs investisseurs et qu’elles soient en mesure d’interagir d’une manière claire et transparente avec eux. Voici un extrait qui montre l’ampleur des nouvelles directives.
The SRD also grants shareholders the right to vote on companies’ remuneration policies, which may increase the policy analysis and assessment required by the buy-side. Similarly, the SRD requires that any material transaction (as defined by national regulators) between a listed company and a related third party must be announced and approved by the shareholders and the board.
Depending on national requirements, the announcement may also need to be accompanied by a report about the impact of the transaction from an independent third party, the board or a committee of independent directors.
La lecture de cet article montre que les entreprises ont peu de temps pour se conformer aux directives. Les auteurs explorent les impacts de l’adoption de ces règles sur les principaux intéressés, notamment sur les investisseurs institutionnels et les firmes d’intermédiation.
All parties in the shareholder communication chain need to prepare for the enhanced requirements of the new Shareholder Rights Directive—and try to influence its local implementation to encourage a harmonised approach.
The new Shareholder Rights Directive (SRD), adopted by the European Council and approved by the European Parliament this spring, is a laudable initiative intended to encourage shareholder engagement in listed companies in Europe and improve the transparency of related processes— including proxy voting. The European Commission (EC) wants to see proof that companies understand their investors and communicate with them in a clear and transparent manner.
The new SRD updates its 2007 predecessor and introduces some new requirements related to remunerating directors, identifying shareholders, facilitating the exercise of shareholder rights, transmitting information and providing transparency for institutional investors, asset managers and proxy advisors. The majority of the SRD is required to be translated into national law by European member states by June 2019 (although some elements will not come into force until September 2020).
Given the complexities introduced by the new SRD, firms across the shareholder communication chain need to begin preparing now if they are to meet its requirements by 2019. These are expected to entail significant and potentially costly changes relating to process reforms and transparency requirements, impacting issuers, asset managers, custodians, central securities depositories (CSDs), and a range of other intermediaries and service providers.
The two-year member-state transposition process will involve adaptation of the SRD’s requirements to reflect domestic market structures and local legal processes. We encourage all affected firms to engage with the EC and national regulators, and share their views on how the SRD should be implemented. This is vital for achieving outcomes that are equitable and commensurate with the corporate governance benefits of the SRD. If national regulators opt for significantly different interpretations of the SRD, this would be challenging for industry participants.
For example, one global custodian has expressed concern about the risk of national divergence requiring compliance efforts to be tailored to each regulator’s interpretation, thereby increasing the complexity and cost of SRD implementation for firms operating in more than one market.
Another securities services firm believes that discrepancies in implementation dates in different jurisdictions will be problematic for global firms.
Institutional investor impact
Institutional investors and asset managers are likely to be affected by the SRD in a number of ways. For example, both will have to be more transparent about their engagement with investee companies and how they integrate shareholder engagement into their investment strategy. Under the SRD this information must be reported annually and made available on buy-side firms’ websites. These firms must also disclose annually their voting behaviour and explain significant votes and their use of proxy advisor services. The SRD introduces these requirements on a comply-or-explain basis.
The SRD also grants shareholders the right to vote on companies’ remuneration policies, which may increase the policy analysis and assessment required by the buy-side. Similarly, the SRD requires that any material transaction (as defined by national regulators) between a listed company and a related third party must be announced and approved by the shareholders and the board. Depending on national requirements, the announcement may also need to be accompanied by a report about the impact of the transaction from an independent third party, the board or a committee of independent directors.
These new requirements will result in the production of more data and more reporting before a vote, potentially creating a significant burden on asset managers and investors as they try to manage this information flow. This burden is likely to be particularly noticeable with related party transactions.
Intermediary implications
Intermediary firms will need to keep a close watch on national requirements for the adoption of specific identification standards and data items for shareholder transparency requirements. For instance, markets could set different minimum levels of holdings that must be disclosed.
In addition, the SRD refers to providing data in a standardised format but does not specify the standards, so these may be provided by the EC. However, if the disclosure of certain data items would breach some countries’ data privacy laws, national regulators would have to alter the local requirements.
Another change introduced by the SRD is that intermediaries will have to store shareholder information for at least 12 months after they become aware that someone has ceased to be a shareholder. Data storage and retention requirements are therefore likely to increase.
A particular concern for intermediaries is that the SRD requires them to transmit general meeting agenda and voting information “without delay”. National regulators could interpret this as a requirement for real-time or near-real-time reporting. If this means that vote information has to be transmitted immediately, intermediaries will need to introduce intraday processing support. Meanwhile, the need to use a standardised format could result in amendments to current SWIFT message formats, with associated costs. It is also likely that the volume of voting instructions and amendments will increase after implementation of the SRD.
One custodian has expressed concern about the lack of regulatory clarity on whether post-meeting announcements will also have to be transmitted immediately. The EC and national regulators will need to confirm the level of information that must be passed on to shareholders. Some intermediaries may face operational headaches if their current processes can support the transmission of voting information but not of other data items in the same standardised and immediate manner.
Intermediaries could face the brunt of the costs of SRD implementation, particularly because European member states can prohibit intermediaries from charging fees for the cost of changes related to disclosure. If regulators decide to mandate this, intermediaries will have to absorb all compliance costs rather than passing a percentage on to clients.
If regulators are more lenient, intermediaries may be able to pass on certain costs, but the SRD specifies that these must be proven to be proportionate to the cost of offering the service. Intermediaries could therefore have to pay for the full cost of transparency requirements in some jurisdictions, while providing an audit trail of operational costs (and facing questions about any inefficiencies) in others.
The bundling of proxy costs into custody fees may also need re-evaluating, because intermediaries will need to disclose their fees in relation to proxy services. The SRD stresses the need for “non-discriminatory and proportionate” fees and jurisdictions will also have the power to prohibit fees for proxy services. If some do prohibit fees, firms’ business models will need to be revised.
Widespread impact
Issuers and registrars will also be affected by the SRD in relation to the standardisation of meeting announcements and the provision of vote confirmation. And proxy service providers will be impacted, although global firms that already comply with some jurisdictions’ voluntary requirements in transparency and reporting will feel less short-term impact. They could face both opportunities and challenges—with the potential to deliver new services to help intermediaries to support requirements such as vote confirmation, but needing to invest to do so.
The SRD’s transposition period presents market participants with an opportunity to review the impact on their operations, engage with regulators and assess their readiness. It is something that the industry should embrace and collaborate on to get right.
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*Demi Derem is general manager for Investor Communication Solutions, International, at Broadridge, and Elizabeth Maiellano is vice president for product management, Investor Communication Solutions, International, at Broadridge. This article has been prepared in collaboration with Broadridge, a supporter of Board Agenda.
Aujourd’hui, je fais une première expérience de publication d’un billet en gouvernance parue sur le site du Harvard Law School Forum on Corporate Governance, le 6 février 2018.
En effet, j’édite la traduction en français d’un article publié par Abe M. Friedman*, CEO de la firme CamberView. Cette publication constitue, à mon avis, un moment décisif dans la conception de la gouvernance telle que vue par un investisseur avisé.
Comme plusieurs lecteurs sont particulièrement intéressés par les contenus en français, j’ai utilisé l’outil de traduction de Google pour faire ressortir les implications de la lettre annuelle aux PDG de Larry Fink, PDG de BlackRock.
Vous comprendrez que la traduction est perfectible, mais je crois qu’elle est compréhensible avec un minimum d’édition.
Je vous invite également à lire la dernière mise à jour des recommandations de BlackRock en vue des votes aux assemblées annuelles : Updated BlackRock Proxy Voting Guidelines
Bonne lecture !
Le mardi 16 janvier, Larry Fink, PDG de BlackRock, a publié sa lettre annuelle aux PDG décrivant une vision audacieuse liant la prospérité des entreprises à leur capacité à fournir de solides performances financières tout en contribuant positivement à la société. Intitulée « A Sense of Purpose », cette lettre souligne l’approche de plus en plus active de BlackRock en matière d’engagement actionnarial ; elle constitue son opinion selon laquelle les conseils d’administration jouent un rôle central dans la direction stratégique à long terme des sociétés ainsi que dans la prise en compte des facteurs de risque environnementaux, sociaux, de gouvernance (ESG) et de création de valeur à long terme.
La lettre est un autre signal d’un changement fondamental dans la pensée des gestionnaires d’actifs traditionnels sur des sujets que certains ont toujours considérés comme non économiques. Alors que la pression monte sur les grands gestionnaires d’actifs sur la façon dont ils « supervisent » les « portefeuilles » de leurs entreprises, ces questions sociales et environnementales sont de plus en plus considérées comme essentielles à la création de valeur et à la durabilité à long terme. La position d’avant-garde sur la responsabilité d’entreprise prise dans la lettre est un indicateur de la manière dont les attentes changeantes des propriétaires d’actifs sont intégrées dans le comportement des gestionnaires d’actifs. Pour les entreprises, ce changement a créé un nouvel ensemble d’attentes, et le potentiel d’un examen plus approfondi de la part des investisseurs qui pourraient continuer à croître dans les années à venir.
Thèmes clés — ESG, engagement des actionnaires, administrateurs et activisme
La lettre de cette année réitère un certain nombre de thèmes tirés des communications des années précédentes et explique comment BlackRock s’attend à ce que les sociétés améliorent la valeur à long terme pour les actionnaires.
ESG et importance de la diversité du conseil d’administration dans la création de valeur à long terme
La lettre de Fink souligne la conviction de BlackRock que la gestion des questions ESG est essentielle à une croissance durable. De l’avis de BlackRock, exercer la surveillance de ces défis ainsi que d’autres défis émergents à la création de valeur à long terme relève de la compétence du conseil, qui, selon M. Fink, devrait inclure une diversité de genres, d’ethnies, d’expériences et de façons de penser. Les entreprises devraient s’attendre à ce que BlackRock (et, avec le temps, d’autres grands investisseurs institutionnels) investisse plus de temps pour comprendre la gestion des risques des entreprises liée à leur impact plus large sur les communautés, la société et l’environnement. Cela signifie probablement un soutien croissant aux propositions d’actionnaires sur ces sujets et une pression accrue sur les conseils pour qu’ils démontrent qu’ils s’adressent sérieusement à ces questions.
Engagement des actionnaires
Citant le besoin d’être des « agents actifs et engagés pour le compte des clients investis avec BlackRock », la lettre appelle à un nouveau modèle d’engagement des actionnaires qui comprend des communications pendant toute l’année sur les moyens d’améliorer la valeur à long terme. Alors que M. Fink note que BlackRock a engagé des ressources importantes pour améliorer ses propres efforts d’intendance des investissements au cours des dernières années, il écrit que « la croissance de l’indexation exige que nous prenions maintenant cette fonction à un nouveau niveau. » BlackRock a l’intention de doubler la taille de ses équipes de supervision.
Le rôle du conseil dans la communication et la supervision de la stratégie d’entreprise pour la croissance à long terme
Revenant sur un thème commun des communications précédentes, la lettre de cette année souligne l’importance du conseil pour aider les entreprises à définir un cadre stratégique pour la création de valeur à long terme. Bien que le nombre moyen d’heures consacrées par les membres du conseil à leur rôle ait augmenté au cours des dernières années, M. Fink continue d’élever la barre, soulignant que les administrateurs, dont les compétences et l’expérience proviennent uniquement de réunions sporadiques, ne remplissent pas leur devoir envers les actionnaires. La lettre de cette année contient une liste de questions que les sociétés (c.-à-d. les conseils d’administration et la direction) devraient poser pour s’assurer qu’elles sont en mesure de maintenir leur rendement à long terme. Ces questions comprennent explicitement l’impact sociétal des entreprises et les importants changements structurels (tels que les conditions économiques, l’automation et les changements climatiques) qui influencent le potentiel de croissance.
S’engager sur l’activisme
Fink écrit qu’une « raison centrale de la montée de l’activisme — et des luttes intempestives par procuration — est que les entreprises n’ont pas été assez explicites sur leurs stratégies à long terme. » Il souligne, à titre d’exemple, la réforme fiscale récemment adoptée et son potentiel d’augmentation des flux de trésorerie après impôt, comme un moyen pour les activistes de cibler les entreprises qui ne communiquent pas efficacement leur stratégie à long terme. M. Fink encourage les entreprises à s’engager avec les investisseurs et autres parties prenantes au début du processus lorsque ceux-ci offrent « des idées précieuses — plus souvent que certains détracteurs ne le suggèrent », une observation cohérente avec le soutien sélectif de BlackRock aux activistes dans les luttes par procuration.
Recommandations aux émetteurs
Cette lettre représente une évolution significative de l’opinion publique de BlackRock sur la responsabilité des entreprises et des conseils d’administration de gérer activement les impacts sociétaux de leurs activités au bénéfice de toutes les parties prenantes. M. Fink affirme que l’objectif des propriétaires d’actifs est non seulement d’améliorer leurs rendements d’investissement, mais aussi de voir le secteur privé relever les défis sociaux qui assureront la « prospérité et la sécurité » de leurs concitoyens.
BlackRock n’est pas le seul à faire ce changement philosophique. Les derniers mois ont fourni des exemples de la façon dont cette nouvelle dynamique façonne les décisions de vote et d’investissement. L’été dernier, des résolutions sur la divulgation des risques climatiques ont été adoptées pour la première fois dans de grandes entreprises énergétiques. En novembre, State Street Global Advisors a révélé qu’elle avait voté contre les administrateurs de 400 entreprises qui, selon elle, n’avaient pas fait d’efforts pour accroître la diversité au sein du conseil. Plus tôt ce mois-ci, JANA Partners et CalSTRS se sont associés pour mener une campagne d’activisme sur la question de savoir si Apple permet aux parents de protéger leurs enfants en utilisant la technologie et JANA a également créé un fonds pour cibler d’autres entreprises.
Afin de répondre aux questions soulevées dans la lettre de M. Fink, les sociétés ouvertes devraient envisager :
Construire une pratique de l’engagement continu tout au long de l’année sur la gouvernance et la durabilité avec leurs meilleurs investisseurs afin de rester en contrôle de l’activisme et d’être au-devant des investisseurs face à un défi.
Expliquer le processus du conseil dans le développement de la stratégie à long terme, dans le rôle de supervision de l’entreprise ainsi que dans les discussions avec les investisseurs.
Présenter les investisseurs à une variété de membres de l’équipe de direction et, à l’occasion, à un ou plusieurs membres du conseil d’administration pour établir des relations et faire confiance, au fil du temps, à tous les dirigeants de l’entreprise.
Décrire comment les administrateurs cultivent la connaissance de l’entreprise en dehors des réunions formelles du conseil d’administration, afin de remplir leur mandat de protection des intérêts à long terme des investisseurs.
Aujourd’hui, je vous propose mon point de vue en lien avec l’article de Jean-François Thuot*, intitulé « Les principes de saine gouvernance (PSG) sont-ils valables et applicables à toutes les organisations ? », paru sur le site de l’Ordre des administrateurs agréés du Québec (OAAQ) ainsi que sur le site de LinkedIn.
L’auteur met principalement l’accent sur deux principes de gouvernance généralement reconnus (PGGR) qui ne s’appliquent pas très bien à certains types d’organisations telles les OBNL, les ordres professionnels et les nombreuses variantes d’associations. J’ajouterais à la liste de Jean-François les sociétés d’État, les petites entreprises (PME), les entreprises en démarrage (start-up) et les entreprises à contrôle familial.
Voici les deux éléments qui posent problème dans l’application des PGGR :
(1) les personnes élues par les membres de différentes régions et qui sont, de facto, administrateurs de l’organisation ;
(2) les modalités de l’utilisation d’un comité exécutif.
Il s’agit d’excellents questionnements et j’y suis fréquemment confronté !
À mon avis, aucune organisation ne peut se conformer aux PGGR, et c’est bien normal ! Mais, ces entités peuvent se rapprocher de ce modèle perfectible comme l’auteur le dit si bien lorsqu’il mentionne que les OBNL « gagneraient à se doter de solides conditions d’éligibilité à un poste d’administrateur, faisant une large part à la dimension de compétence ».
Également, l’auteur touche un point déterminant lorsqu’il questionne la quasi-nécessité, pour plusieurs organisations, de se doter d’un comité exécutif (CE).
À mon avis, le CE doit être créé dans tous les types d’organisations, même s’il n’est pas toujours utilisé ou actif.
Comme mentionné, le comité exécutif est malheureusement nécessaire dans les cas où les conseils d’administration sont de grandes tailles. Il n’est généralement pas utile, ou nécessaire, lorsque le CA est d’environ 8-10 personnes et que celui-ci se réunit au moins 5 fois par an.
Le CE est nécessaire s’il y a des décisions urgentes à prendre à court terme. Mais, de nos jours, les membres du CA sont facilement joignables et ils peuvent décider rapidement. De plus, les autres comités statutaires du conseil sont davantage sollicités dans leur sphère de compétence.
Les raisons que l’auteur évoque eu égard à l’inutilité d’un CE qui se réunit régulièrement (à tous les mois, par exemple) sont, à mon avis, toujours très valables : déresponsabilisation du CA et de ses administrateurs, concentration du pouvoir entre les mains d’un cercle d’initiés, perception que les CA de petite taille sont plus efficaces.
Je suis tout à fait d’accord avec la conclusion de l’auteur.
Ces deux exemples invitent à bien mesurer le contexte organisationnel dans lequel les PSG sont destinés à être appliqués. Il existe une diversité des modèles de gouvernance, ce que la vogue actuelle des PSG tend à nous faire oublier. Il faut espérer que la réflexion se développe pour mieux saisir les particularités des OBNL, des associations et des ordres professionnels, afin de donner les réponses appropriées aux défis qui les caractérisent en matière de gouvernance.
Je vous encourage à lire l’article de Jean-François, ci-dessous, qui s’interroge sur ces deux grandes difficultés dans l’application des règles de bonne gouvernance.
Largement issus des organisations privées à visée lucrative, les principes de saine gouvernance (PSG) ont été mis à l’honneur ces dernières années et leur légitimité est telle qu’il est généralement admis qu’on peut les exporter vers n’importe quelle organisation.
En grattant un peu toutefois, les limites de certains de ces principes finissent par apparaitre. J’aimerais ici donner deux exemples.
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*Jean-François Thuot, PhD, ASC, AdmA, conseiller, facilitateur stratégique pour OBNL et ordres professionnels: management associatif, affaires publiques, rédaction stratégique, formation.
Gouvernance | Jacques Grisé 