actualités internationales | Page 8

Minerva Analytics apporte une belle mise à jour à la problématique de la diversité en m’apprenant que la Grèce vient de renforcer son dispositif juridique en matière de féminisation : « Greek companies will soon be mandated to meet a 25% female quota on their boards following a landmark decision for gender diversity ».

Extrait :

The quota requirement has been included as an amendment to the bill transposing the EU Shareholder Rights Directive II (SRD II) into Greek law, and is the result of a consultation led by a group of academics specialising in corporate governance.

(…)

Overall, the directive is designed to encourage companies away from short-termism, focusing on areas such as director remuneration. However, the Greek amendment marks the first time it has been used to tackle the EU’s poor record on gender diversity at a board level.

According to the European Commission’s 2019 report on equality between men and women, since 2015, progress on corporate gender inclusivity has stalled. As of October 2018, the proportion of women on the boards of the EU’s biggest companies was only 26.7%.

Within this, France was the only EU member state with at least 40% female representation at board-level, while women account for less than a third of board-level positions in Italy, Sweden, Finland and Germany.

According to the same data, women made up less than 10% of board members in Greece.

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David Larcker, Bradford Lynch, Brian Tayan et Daniel Taylor publient un texte qui revient sur la transparence des ghrandes entreprises américaines en matière de COVID-19 « The Spread of Covid-19 Disclosure » (29 juin 2020). Un document plein de statistiques et de tendances sur la transparence… vraiment intéressant sachant que l’enjeu de la question n’est pas à négliger.

Extrait :

The COVID-19 pandemic presents an interesting scenario whereby an unexpected shock to the economic system led to a rapid deterioration in the economic landscape, causing sharp changes in performance relative to expectations just a few months prior. For most companies, the pandemic has been detrimental. For a few, it brought unexpected demand. In many cases, supply chains have been strained, causing ripple effects that extend well beyond any one company.

How do companies respond to such a situation? What choices do they make, and how much transparency do they offer? How does disclosure vary in a setting where the potential impact is so widely uncertain? The COVID-19 pandemic provides a unique setting to examine disclosure choices in a situation of extreme uncertainty that extends across all companies in the public market. This devastating outlier event provides a rare glimpse into disclosure behavior by managers and boards.

Why This Matters

1. The COVID-19 pandemic provides a unique opportunity to examine disclosure practices of companies relative to peers in real time about a somewhat unprecedented shock that impacted practically every publicly listed company in the U.S. We see that decisions varied considerably about whether to make disclosure and, if so, what and how much to say about the pandemic’s impact on operations, finances, and future. What motivates some companies to be forthcoming about what they are experiencing, while others remain silent? Does this reflect different degrees of certitude about how the virus would impact their businesses, or differences in managements’ perception of their “obligations” to be transparent with the public? What does this say about a company’s view of its relation and duty to shareholders?
2. In one example, we saw a consumer beverage company make zero references to COVID-19 in its SEC filings and website, despite the virus plausibly having at least some impact on its business. In another example, we saw a company claim no material changes to its previously reported risk factors when managers almost certainly had relevant information about the virus and the likely impact on sales and operations. What discussion among the senior managers, board members, external auditor, and general counsel leads to a decision to make no disclosures? What should shareholders glean from this decision, particularly in light of peer disclosure?
3. The COVID-19 pandemic represents a so-called “black swan” event that inflicted severe and unexpected damage to wide swaths of the economy. What strategic insights will companies learn from this event? Can boards use these insights to prepare for other possible outlier events, such as climate events, terrorism, cyber-attacks, pandemics, and other emergencies? Should these insights be disclosed to shareholders?

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Intéressant article du Financial Times du 1er juillet 2020 qui revient sur le modèle allemand « German corporations — and regulation — are in the dock ».

Extrait :

Now the consensual German model of business has suffered multiple mechanical failures. Wirecard, the payments group that bolstered German tech credentials, has imploded in fraud. Bayer is taking up to $11bn in charges mostly triggered by a disastrous US takeover. Once-proud conglomerates Siemens and Thyssenkrupp are shrinking. Volkswagen’s service life shortens each time Tesla’s outlook improves.

(…) Germany, can we talk? “Sure. I’m driving but I’m German so that’s second nature,” jokes an economist via his hands-free, “I don’t think there is any common thread between Wirecard and these other examples.” According to him, the worst accidents occur when German business adopts US ways. Wirecard had a two-tier board structure, like most German businesses. But its supervisory board was seemingly full of corporate yespersons, not vigilant workers as governance rules dictate. And the group was led by a bossy entrepreneur. Kenneth Amaeshi, a professor of business at Edinburgh university, disagrees with such exceptionalism. He believes the Wirecard scandal puts German stakeholder capitalism “in the dock”. It points to a structural weakness of regulation, he says. He is right.

(…) Corporate governance must be overhauled this time.

Supervisory boards must shrink, meet more often and include more independent directors. Regulators must adopt the adversarial approach of US peers. Industrial giants should unbundle further to create a new tier of focused medium-sized businesses. Siemens’ 2018 flotation of Healthineers, a healthcare equipment unit, shows what can be done. Germany’s biggest challenge is spurring investment in disruptive technology. Business has depended on debt finance from risk-averse investors. But there is no lack of equity, as Guntram Wolff of Bruegel, a think-tank, points out. It features as retained corporate earnings rather than footloose investment capital. This is reflected in total equity of some €1.2tn on the balance sheets of Germany’s top 100 quoted companies, according to S&P Global data. Tax breaks are needed to chivvy more of this capital into start-ups and electric vehicle development. It would be a shame to waste two good crises — the meltdown of the German model plus coronavirus. Moreover, support is growing worldwide for stakeholder capitalism, in which social and environmental goals rank alongside profits. Germany just needs to reduce its emphasis on safe jobs for workers and well-networked managers. A little less consensus can make the German model roadworthy again.

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Dans le dossier Droit du travail et droit des sociétés : questions d’actualité réalisé sous la coordination scientifique de Jérôme Chacornac et Grégoire Duchange, je signale deux articles intéressants touchant les thématiques du blogue :

• L’obligation de prendre en considération les enjeux sociaux : quel impact pour les salariés d’une société ? Par Matthieu Buchberger
• Les administrateurs représentant les salariés : un renforcement de principe mais des difficultés pratiques ignorées… Par Valentino Armillei

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Intéressant billet sur le Harvard Law School Forum on Corporate Governance mettant en avant l’importance prise par le « S » des critères ESG : « Time to Rethink the S in ESG » (Jonathan Neilan, Peter Reilly, et Glenn Fitzpatrick, 28 juin 2020).

Extrait :

In advising companies on protecting and enhancing corporate reputation—through good and bad times—our guiding principle is to ‘do the right thing’. Simple as it sounds, it is reflected in the adage that ‘good PR starts with good behaviour’. This guiding principle also translates to building your ‘S’ credentials. While the various ESG criteria of the reporting frameworks and ratings agencies are a useful guide, our consistent approach in advising companies is for them to take the steps they believe are genuinely in the best interest of the company and its wider stakeholders. Not every decision will meet the expectations of every stakeholder; but it’s a good place to start.

As the wider sustainability agenda also drives more rapid and fundamental change in global markets and technology innovation, properly considering the pressure from public policy and evolving legal requirements, as well as the needs of key stakeholders, is key to understanding what is (and will be seen as) ‘good behaviour’.

As the focus on the ‘S’ grows, companies will need to shift from a reactive to a proactive position. While governance and environmental data is readily available for most companies, the same is not true of the ‘S’. The leeway companies have been afforded on the ‘S’ in the past is unlikely to continue; and, expectations of (and measurement by) rating agencies and investors will continue to increase.

In light of the economic shocks and social upheaval across the globe, demands from stakeholders—most pressingly investors and Governments—will reach a crescendo over the coming six months. As the sole arbiter of much of the information needed to value the ‘S’ in ESG, companies have an opportunity to demonstrate a willingness to shift levels of transparency before they are forced to do so. Companies understandably tend to highlight the efforts they make, often through their corporate social responsibility or communications departments, rather than the higher-cost, higher-risk analysis of the effectiveness of those efforts. Fundamentally, hastened by the emergence of a global pandemic, the world recognises the significance of the risk that failure to address stakeholder interests and expectations represents to business. That shift can be identified as demand for evidence of positive outcomes as opposed to simply efforts or policies.

As we noted in our 2019 Paper, ESG will never replace financial performance as the primary driver of company valuations. Increasingly, however, it is proving to drive the cost of capital down for companies while playing a hugely important role in companies’ risk management frameworks. Most immediately, companies should get a firm handle on how comprehensive their policies, procedures and data are in the five areas listed through a candid audit, as well as other factors material to their businesses’ long-term success. However, this is just a first step and companies must build a narrative and strategy around disclosure for all future annual reports and, where appropriate, market communications. Investors of all sizes are increasingly driving this factor home to Boards and management. In just one week at the end of April, human capital management proposals from As You Sow, a non-for-profit foundation, received 61% and 79% support at two S&P 500 companies, Fastenal and Genuine Parts, respectively. The two companies must now prepare reports on diversity and inclusion, and describe the company’s policies, performance, and improvement targets related to material human capital risks and opportunities as designed by a small shareholder—as opposed to crafting an approach and associated disclosure themselves.

What has become clear over the past three months is that a host of stakeholders, including many investors, will expect a sea-change in their access to information and company practices. While there is no requirement to be the first mover on this, those that are laggards will face avoidable challenges and a rising threat to their ‘licence to operate’.

À la prochaine…