objectifs de l’entreprise | Page 6

Martin Lipton, William Savitt et Karessa L. Cain ont publié sur le Harvard Law School Forum on Corporate Governance un intéressant papier intitulé : « On the Purpose of the Corporation » (27 mai 2020).

Extrait :

The growing view that corporations should take into account environmental, social and governance (ESG) issues in running their businesses, and resistance from those who believe that companies should be managed solely to maximize share price, has intensified the focus on the more fundamental question of corporate governance: what is the purpose of the corporation?

The question has elicited an immense range of proposed answers. The British Academy’s Future of the Corporation Project, led by Colin Mayer, suggests that the purpose of the corporation is to provide profitable solutions to problems of people and planet, while not causing harm. The Business Roundtable has articulated a fundamental commitment of corporations to deliver value to all stakeholders, each of whom is essential to the corporation’s success. Each of the major US-based index funds has also expressed their views about the purpose of the corporations in which they invest, which, considered collectively, can be summarized as the pursuit of sustainable business strategies that take into account ESG factors in order to drive long-term value creation. On the other hand, the Council of Institutional Investors, some leading economists and law professors, and some activist hedge funds and other active investors continue to advocate a narrow scope of corporate purpose that is focused exclusively on maximizing shareholder value. The Covid-19 pandemic has brought into sharp focus the inequality in our society that, in considerable measure, is attributable to maximizing shareholder value at the expense of employees and communities.

For our part, we have supported stakeholder governance for over 40 years—first, to empower boards of directors to reject opportunistic takeover bids by corporate raiders, and later to combat short-termism and ensure that directors maintain the flexibility to invest for long-term growth and innovation. We continue to advise corporations and their boards that they may exercise their business judgment to manage for the benefit of all stakeholders over the long term.

As the pandemic disrupts settled expectations and provokes fresh perspectives, we believe it is critical to the vitality of our economic system for corporations—and the asset managers and investors who hold their shares—to recognize that ESG and stakeholder purpose are necessary elements of sustainable business success, and to engage on a regular basis to rationalize their views as to governance and stewardship. The roadmap for this shared understanding is elaborated in The New Paradigm: A Roadmap for an Implied Corporate Governance Partnership Between Corporations and Investors to Achieve Sustainable Long-Term Investment and Growth, which we developed for the World Economic Forum in 2016.

These imperatives lead us to a simple formulation of corporate purpose:

The purpose of a corporation is to conduct a lawful, ethical, profitable and sustainable business in order to create value over the long-term, which requires consideration of the stakeholders that are critical to its success (shareholders, employees, customers, suppliers, creditors and communities), as determined by the corporation and the board of directors using its business judgment and with regular engagement with shareholders, who are essential partners in supporting the corporation’s pursuit of this mission.

This conception of purpose is broad enough to apply to every business entity but at the same time supplies clear principles for action and engagement. The basic objective of sustainable profitability recognizes that the purpose of for-profit corporations is to create value for investors. The requirement of lawful and ethical conduct ensures minimum standards of corporate social compliance. Going further, the broader mandate to take into account corporate stakeholders—including communities, which is not limited to local communities, but comprises society and the economy at large—directs boards to exercise their business judgment within the scope of this broader responsibility. The requirement of regular shareholder engagement acknowledges accountability to investors, but also shared responsibility with shareholders for responsible long-term corporate stewardship.

Fulfilling this purpose will require different approaches for each corporation, dependent on its industry, history, governance and other factors. We expect that board committees—focusing on stakeholders, ESG issues and the stewardship obligations of shareholders—may be useful or even necessary for some companies. But for all the differences among companies, there is an important unifying commonality: corporate action, taken against the backdrop of this view of corporate purpose, will be fully protected by the business judgment rule, so long as it reflects the decisions of unconflicted directors acting upon careful deliberation.

Executed in this way, stakeholder governance is more consistent with a value-creation mandate than the shareholder primacy model. Directors and managers enjoy broad authority to act for the corporate entity they represent, over the long term, balancing its many rights and obligations and taking into account both risks and opportunities, in regular consultation with shareholders. Directors will not be forced to act as if any one interest trumps all others, with potentially destructive consequences, but will instead have latitude to make decisions that reasonably balance the interests of all constituencies and operate to the benefit of the sustainable, long-term business success of the corporation as a whole.

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En voilà tout un titre ! Le professeur Brian Cheffins livre tout un article sur SSRN : « Brian R. Cheffins, « Stop Blaming Milton Friedman! », 11 mars 2020, University of Cambridge Faculty of Law Research Paper No. 9/2020.

Résumé :

A 1970 New York Times essay on corporate social responsibility by Milton Friedman is often said to have launched a shareholder-focused reorientation of managerial priorities in America’s public companies. The essay correspondingly is a primary target of those critical of a shareholder-centric approach to corporate governance. This paper argues that it is erroneous to blame (or credit) Milton Friedman for the rise of shareholder primacy in corporate America. In order for Friedman’s views to be as influential as has been assumed, his essay should have constituted a fundamental break from prevailing thinking that changed minds with some alacrity. In fact, what Friedman said was largely familiar to readers in 1970 and his essay did little to change managerial priorities at that point in time. The shareholder-first mentality that would come to dominate in corporate America would only take hold in the mid-1980s. This occurred due to an unprecedented wave of hostile takeovers rather than anything Friedman said and was sustained by a dramatic shift in favor of incentive-laden executive pay. Correspondingly, the time has come to stop blaming him for America’s shareholder-oriented capitalism.

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Le cabinet d’avocat Stikeman Elliott revient dans un billet court sur la mission du CA en contexte de pandémie : « COVID and Corporate Governance: A Broader Mission for Corporate Boards » (24 avril 2020).

Extrait :

The discussion focuses on the key challenges facing Canada’s corporate leaders as the reopening phase approaches:

• Focusing on issues that matter;
• Immediate crisis management and board readiness;
• Re-thinking strategy and risk management;
• Re-thinking incentive frameworks; and
• Re-thinking corporate purpose.

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Merci au cabinet Stikeman Elliott pour ce billet daté du 24 avril 2020 intitulé « COVID et gouvernance d’entreprise : une mission plus large pour les conseils d’administration ». Un précieux éclairage sur ce qui va changer pour les CA avec la COVID-19…

Extrait :

Cette discussion aborde les principaux défis auxquels sont confrontés les chefs d’entreprise canadiens à l’approche de la phase de réouverture :

se concentrer sur les véritables enjeux; 

veiller à la gestion immédiate des crises et à la préparation du conseil d’administration; 

repenser la stratégie et la gestion des risques;

repenser les cadres incitatifs; et

repenser l’objectif de l’entreprise.

Comme en conclut l’article, cette crise redéfinira une grande partie de ce que nous considérons comme étant de la « bonne gouvernance ». Les conseils d’administration, en particulier, doivent élargir leurs missions pour s’assurer que leurs entreprises sont préparées à la nouvelle réalité qui les attend.

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Bonjour à toutes et à tous, on revient toujours aux B Corporation notamment la Public Benefit Corporation du Delaware ! Voici une des premières études empiriques menées sur le sujet : Michael B. Dorff, James Hicks et Steven Solomon Davidoff , « The Future or Fancy? An Empirical Study of Public Benefit Corporations » (4 février 2020).

Une belle question que se posent les auteurs : Using our novel dataset, we can discern whether for-profit investment is occurring in PBCs, and if so, whether it is different in kind from ordinary early stage investment.

Extrait :

The PBC has stirred much debate and speculation about the future of
the corporation. Some have called it the future while others decried the
form as mere public relations or purpose washing. In this article we
have attempted to add data to the debate. Using a hand-collected
sample of all Delaware-registered PBCs that received investment
between 2013 and 2018 we examine whether PBCs are the future or
mere fancy.
We find that neither hypothesis holds. Instead, we find that there are
295 PBCs which have received investment from VC funds amounting
to over $2.5 billion in the aggregate. This investment is significant
because it shows that the PBC form is not a failure and that it is
capable of attracting for-profit investment, a marker of success. This
investment is coming not just from pro-social VCs but from top-tier
firms.
Nonetheless, we also find that PBCs are being funded over a wide
range of mostly consumer-focused industries (banking, food,
education, technology, and more), implying that the form is a
secondary consideration to the for-profit motive. In other words, the
PBC form is most likely to receive VC funding when the PBC’s
business strategy suggests the form will benefit a for-profit mission.
Our evidence also suggests that PBC round sizes are smaller than their
purely profit-seeking peers, implying that VCs are taking less risk with
these forms than with traditional corporations.
Ultimately, we theorize that, based on our findings, the future course
of the PBC is uncertain.

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