Billets d'humeur

This note written in due course after a conference about corporate governance organised by both the IoD (Institute of Directors) and the HEC alumni.

In the UK, the “Combined code” of corporate governance is set up on two main principles :
1/ Board of Directors should have independent directors
2/ CEO should be separated from the Board of directors
3/ CEO should not transfer to Chairman when they retired from CEO
4/ CEO should not serve more than 5 / 6 years
5/ CEO should come from outside the industry
Large Quoted companies are supposed to comply to. If they do not, they are supposed to disclose it. This is a “comply or explain system” (quite different from the Sarbanes Oaxley’s prescription system).

There is less duality in the French system.
Three systems do exist :
- A board of Directors with the same person acting as Chairman & CEO
- A board of Directors with a non executive Chaiman diffrent from the CEO
- A Supervisory Board and an Executive Board.
However, what is the role of the Independant Director himself.
Who is he (she) sitting for ? The UK system seems more focused on the delivery of value to shareholders.
No representative for the employees is expected whereas it is an obligation in France (Same obligation in Germany, Austria, Sweden).
The french system aims to represent all the stakeholders of the company (shareholders but also employees, partners, ....).
What’s the standard ? Does he have to comply with th standard of the country or to a wider "worldwide" standard ? What’s the "reasonable" period of expected time return for the shareholders’ investments ? What to decide / Where to sit when there is a conflict between shareholders (LT view vs short term view)?