Normes d’encadrement

En mai 2016, l’Institute of Chartered Secretaries and Administrators (ICSA) a publié avec Ernst & Young un rapport sur le rôle du comité de nomination : « The Nomination Committee – Coming out of the Shadows ».

While its role may be less clearly defined than that of the audit committee, and its profile lower than that of the remuneration committee, it is arguably the most important of the three. It plays a pivotal role in appointing directors to the board and, if the board lacks the right balance, knowledge, skills and attributes, the likelihood of it and its committees operating effectively is greatly reduced.

Concernant sa mission et ses membres, il est précisé les points suivants :

1. What the appropriate role of the committee should be, e.g., whether the committee should look at executive talent if it does not already do so, and whether the board would benefit from combining the committee into a nomination and governance committee.

2. Whether the following processes are clearly linked: the discussion of current board composition and future composition in light of the company’s strategy, the executive and senior talent succession planning and company strategy, the outcome of the board evaluation exercise and board succession plans, and the link between board evaluations and development and training plans.

3. The existence of a two-pronged approach to identify succession plans in both emergency and steady-state situations.

À propos de la planification de la relève et la détection de talent, le rapport mentionne relativement au comité :

1. The extent to which nomination committee looks across the market and internally to identify four or five potential successors to the CEO.

2. How deeply into the organisation the committee should be looking to identify future talent.

3. The best way to develop the skills of future executive leaders in the business.

À la prochaine…

Ivan Tchotourian

L’EHRC vient de publier un guide « Business and human rights – A five-step guide for company boards » bien intéressant pour les CA. Comme le précise ce document : « We recommend that boards should follow five steps to ensure that their company is fulfilling its responsibility to respect human rights in a robust and coherent manner that meets the expectations of the UN Guiding Principles and UK statutory reporting obligations. Boards should be aware of the company’s salient, or most severe, human rights risks, and ensure ».

The following are the five steps that it is recommended boards should follow to ensure that their company is fulfilling its responsibility to meet human rights in a robust and coherent manner that meets the expectations of the UN Guiding Principles and UK statutory reporting obligations:

1. the company should embed the responsibility to respect human rights into its culture, knowledge and practices;
2. the company should identify and understands its salient, or most severe, risks to human rights;
3. the company should systematically address its salient, or most severe, risks to human rights and provide for remedies when needed;
4. the company should engage with stakeholders to inform its approach to addressing human rights risks; and
5. the company should report on its salient, or most severe, human rights risks and meet regulatory reporting requirements.

Attention : encore une fois, tout cela n’est que du droit international et donc du droit « mou ». Ce guide l’exprime très bien en ces termes : « The Guiding Principles do not create any new international legal obligations on companies, but they can help boards to operate with respect for human rights and meet their legal responsibilities set out in domestic laws ».

À la prochaine…

Ivan Tchotourain

Bonjour à toutes et à tous, 6 agences fédérales américaines (dont la SEC) ont publié pour commentaire (jusqu’au 22 juillet 2016) leur proposition de mise en place de l’article 956 du Dodd-Frank Act visant à interdire les rémunérations incitatives qui encourageraient une prise de risque inconsidéré des institutions financières. Ce document est intitulé : « Incentive-based Compensation Arrangements ».

The OCC, Board, FDIC, FHFA, NCUA, and SEC (the Agencies) are seeking comment on a joint proposed rule (the proposed rule) to revise the proposed rule the Agencies published in the Federal Register on April 14, 2011, and to implement section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Section 956 generally requires that the Agencies jointly issue regulations or guidelines: (1) prohibiting incentive-based payment arrangements that the Agencies determine encourage inappropriate risks by certain financial institutions by providing excessive compensation or that could lead to material financial loss; and (2) requiring those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate Federal regulator.

À la prochaine…

Ivan Tchotourian

L’Autorité prudentielle de la Banque d’Angleterre vient de publier un Supervisory Statement intitulé « Corporate governance: Board responsibilities » (SS5/16, mars 2016).

The Prudential Regulation Authority has published a policy statement and accompanying supervisory statement concerning the responsibilities of boards.

The purpose of this supervisory statement is to identify, for the boards1 of firms regulated by the Prudential Regulation Authority (PRA), those aspects of governance to which the PRA attaches particular importance and to which the PRA may devote particular attention in the course of its supervision. It is not intended to provide a comprehensive guide for boards of what constitutes good or effective governance. There are more general guidelines for that purpose, for example the UK Corporate Governance Code, published by the Financial Reporting Council.

À la prochaine…

Ivan Tchotourian

Le Harvard Business Review propose un article intitulé : « How incentives for long-term management backfire” qui prend le contrepied de la croyance voulant que les plans incitatifs basés sur la performance à long terme seraient une cause du court-termisme de la direction des entreprises.

In the five years since the advent of Dodd-Frank regulation, corporate governance groups, with their policies requiring at least half of long-term incentives to be “performance-based,” have pushed companies to replace options with multi-year, performance plans. How could anyone object to such an effort? Hardly anyone, except here is the rub: Performance plans require performance targets, and in most companies, planning works in three-year cycles. The logical performance period for long-term incentives is one that matches those cycles. Three years has thus become the standard performance window for measuring achievement.

So a three-year horizon — not even a presidential term — has inexorably become the norm for investing hundreds of billions of dollars of money aimed at creating “long term” value. With the best of intentions, many proxy advisors and long-term investors have widely blessed three years as appropriate, adopting three-year pay for performance as their standard comparison. Today, four out of five S&P 500 companies use a three-year performance period in their long-term incentives. But executives today, who are paid on this new “long term,” typically with equity based partly on earnings-per-share performance, naturally think twice about retaining earnings for projects beyond three years. Their measurements conflict with their managerial inclinations, encouraging them to use earnings booked today to immediately return cash to shareholders.

À la prochaine…

Ivan Tchotourian