Bel article de Vanessa Serret et Mohamed Khemissi dans The conversation (27 juillet 2020) : « Rémunération des dirigeants : la transparence ne fait pas tout ». Cet article revient sur le ratio d’équité : non seulement son utilité, mais encore son niveau (20 ? 100 ?…)
Le ratio d’équité apprécie l’écart entre la rémunération de chaque dirigeant et le salaire (moyen et médian) des salariés à temps plein de son entreprise. Il est prévu un suivi de l’évolution de ce ratio au cours des cinq derniers exercices et sa mise en perspective avec la performance financière de la société. Ces comparaisons renseignent sur la dynamique du partage de la création de valeur entre le dirigeant et les salariés.
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Un premier état des lieux
Sur la base des rémunérations versées en 2019 par les entreprises composant l’indice boursier du CAC 40, les patrons français ont perçu un salaire moyen de 5 millions d’euros, soit une baisse de 9,1 % par rapport à 2018.
Évolution du ratio d’équité par rapport à la rémunération moyenne (bleu) et médiane (orange) des salariés de 2015 à 2019. auteurs
Ce chiffre représente 53 fois la rémunération moyenne de leurs employés (72 fois la rémunération médiane) : un ratio acceptable, selon l’agence de conseil en vote Proxinvest. En effet, selon cette agence, et afin de garantir la cohésion sociale au sein de l’entreprise, le ratio d’équité ne doit pas dépasser 100 (par rapport à la rémunération moyenne des salariés).
Deux dirigeants s’attribuent néanmoins des rémunérations qui dépassent le maximum socialement tolérable à savoir Bernard Charlès, vice-président du conseil d’administration et directeur général de Dassault Systèmes et Paul Hudson, directeur général de Sanofi avec un ratio d’équité qui s’établit respectivement de 268 et de 107.
Notons également que pour les deux sociétés publiques appartenant à l’indice boursier du CAC 40, le ratio d’équité dépasse le plafond de 20 (35 pour Engie et 38 pour Orange) fixé par le décret n° 2012-915 du 26 juillet 2012, relatif au contrôle de l’État sur les rémunérations des dirigeants d’entreprises publiques.
Dans La presse, M. Vincent Brousseau-Pouliot offre un beau texte sur les GAFA avec des solutions qui pourraient être proposées : « GAFA: ils sont tout simplement trop gros » (3 août 2020).
Extrait :
Les GAFA sont des entreprises privées. On ne peut pas les blâmer de vouloir maximiser leurs profits et leurs parts de marché.
Le problème, c’est qu’ils sont devenus tous les quatre tellement gros qu’ils exercent un contrôle trop important sur notre vie numérique ainsi que sur l’industrie de l’internet et du commerce en ligne. Le moteur de recherche de Google a 90 % de parts de marchés. Ensemble, Google et Facebook représentent 53 % de la publicité numérique aux États-Unis. Et Amazon représente 38 % des ventes au détail en ligne aux États-Unis.
Quand des entreprises deviennent si importantes, elles peuvent réduire au silence des concurrents potentiels, et par conséquent freiner l’innovation.
On reproche donc à Amazon d’utiliser les données des entreprises indépendantes sur son site pour améliorer sa propre offre de produits. À Facebook d’être devenu trop gros depuis l’acquisition d’Instagram et de WhatsApp, et de ne pas avoir tenu sa promesse de ne pas relier les données des plateformes de Facebook et de WhatsApp. À Google de favoriser ses propres sites sur son moteur de recherche. À Apple d’avoir des pratiques anticoncurrentielles sur son AppStore.
Depuis les années 80, le droit de la concurrence aux États-Unis permet aux grandes entreprises de continuer à grossir (notamment en achetant des concurrents) tant que les conséquences sont favorables à court terme pour les consommateurs, explique Pierre Larouche, professeur en droit de la concurrence à l’Université de Montréal. Bref, tant que les prix diminuent à court terme.
Cette logique a atteint ses limites dans le cas des oligopoles que sont devenus les GAFA. Des oligopoles si importants que leurs moindres pratiques anticoncurrentielles font en sorte de tuer la concurrence, qui n’a nulle part où aller. À long terme, c’est nuisible pour tout le monde, incluant les consommateurs qui finiront par payer plus cher.
Les États-Unis n’ont pas le choix : ils doivent réglementer les GAFA très sévèrement. On ne peut plus se fier à leurs belles promesses.
Comme on le fait déjà dans d’autres industries comme les télécoms et la télé, les États-Unis doivent modifier les lois sur la concurrence et instaurer une autorité réglementaire pour les géants de la techno qui évaluera en permanence comment Google gère son algorithme, comment Apple gère l’AppStore, comment Facebook gère les données de ses abonnés et si Amazon se sert des données de ses marchands indépendants pour mousser ses produits. Toute entreprise qui passerait un certain seuil dans ces industries serait assujettie à cet examen continu, beaucoup plus sévère que ce qui se fait actuellement.
Le gouvernement américain devrait aussi envisager de forcer Amazon à se scinder en deux entreprises. Facebook pourrait aussi être forcée de se départir de WhatsApp. Cette option ne serait pas simple : les États-Unis n’ont pas réussi à scinder une entreprise pour des raisons concurrentielles depuis AT&T en 1982 (il avait fallu huit ans). Amazon et Facebook contesteraient une telle décision devant les tribunaux, comme l’a fait Microsoft avec succès dans les années 90. (Pourquoi ne pas scinder Google et Apple ? Ça ne donnerait pas de meilleurs résultats et leur avenir serait davantage compromis sur le plan commercial.)
Le plus important pour l’instant, c’est que les États-Unis et l’Europe modernisent leurs lois sur la concurrence afin de pouvoir contrôler véritablement les tendances anticoncurrentielles des GAFA.
Et le Canada, dans tout ça ? En pratique, un « petit pays » comme le Canada a souvent peu de pouvoirs d’embêter les GAFA et se retrouve à la remorque d’ententes négociées aux États-Unis et en Europe.
C’est pourquoi ce qui se passe actuellement aux États-Unis est si important pour nous.
Excellente lecture ce matin de ce billet du Harvard Law School Forum on Corporate Governance : « Legal Liability for ESG Disclosures » (de Connor Kuratek, Joseph A. Hall et Betty M. Huber, 3 août 2020). Dans cette publication, vous trouverez non seulement une belle synthèse des référentiels actuels, mais aussi une réflexion sur les conséquences attachées à la mauvaise divulgation d »information.
Extrait :
3. Legal Liability Considerations
Notwithstanding the SEC’s position that it will not—at this time—mandate additional climate or ESG disclosure, companies must still be mindful of the potential legal risks and litigation costs that may be associated with making these disclosures voluntarily. Although the federal securities laws generally do not require the disclosure of ESG data except in limited instances, potential liability may arise from making ESG-related disclosures that are materially misleading or false. In addition, the anti-fraud provisions of the federal securities laws apply not only to SEC filings, but also extend to less formal communications such as citizenship reports, press releases and websites. Lastly, in addition to potential liability stemming from federal securities laws, potential liability could arise from other statutes and regulations, such as federal and state consumer protection laws.
A. Federal Securities Laws
When they arise, claims relating to a company’s ESG disclosure are generally brought under Section 11 of the Securities Act of 1933, which covers material misstatements and omissions in securities offering documents, and under Section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5, the principal anti-fraud provisions. To date, claims brought under these two provisions have been largely unsuccessful. Cases that have survived the motion to dismiss include statements relating to cybersecurity (which many commentators view as falling under the “S” or “G” of ESG), an oil company’s safety measures, mine safety and internal financial integrity controls found in the company’s sustainability report, website, SEC filings and/or investor presentations.
Interestingly, courts have also found in favor of plaintiffs alleging rule 10b-5 violations for statements made in a company’s code of conduct. Complaints, many of which have been brought in the United States District Court for the Southern District of New York, have included allegations that a company’s code of conduct falsely represented company standards or that public comments made by the company about the code misleadingly publicized the quality of ethical controls. In some circumstances, courts found that statements about or within such codes were more than merely aspirational and did not constitute inactionable puffery, including when viewed in context rather than in isolation. In late March 2020, for example, a company settled a securities class action for $240 million alleging that statements in its code of conduct and code of ethics were false or misleading. The facts of this case were unusual, but it is likely that securities plaintiffs will seek to leverage rulings from the court in that class action to pursue other cases involving code of conducts or ethics. It remains to be seen whether any of these code of conduct case holdings may in the future be extended to apply to cases alleging 10b-5 violations for statements made in a company’s ESG reports.
B. State Consumer Protection Laws
Claims under U.S. state consumer protection laws have been of limited success. Nevertheless, many cases have been appealed which has resulted in additional litigation costs in circumstances where these costs were already significant even when not appealed. Recent claims that were appealed, even if ultimately failed, and which survived the motion to dismiss stage, include claims brought under California’s consumer protection laws alleging that human right commitments on a company website imposed on such company a duty to disclose on its labels that it or its supply chain could be employing child and/or forced labor. Cases have also been dismissed for lack of causal connection between alleged violation and economic injury including a claim under California, Florida and Texas consumer protection statutes alleging that the operator of several theme parks failed to disclose material facts about its treatment of orcas. The case was appealed to the U.S. Court of Appeals for the Ninth Circuit, but was dismissed for failure to show a causal connection between the alleged violation and the plaintiffs’ economic injury.
Overall, successful litigation relating to ESG disclosures is still very much a rare occurrence. However, this does not mean that companies are therefore insulated from litigation risk. Although perhaps not ultimately successful, merely having a claim initiated against a company can have serious reputational damage and may cause a company to incur significant litigation and public relations costs. The next section outlines three key takeaways and related best practices aimed to reduce such risks.
C. Practical Recommendations
Although the above makes clear that ESG litigation to date is often unsuccessful, companies should still be wary of the significant impacts of such litigation. The following outlines some key takeaways and best practices for companies seeking to continue ESG disclosure while simultaneously limiting litigation risk.
Key Takeaway 1: Disclaimers are Critical
As more and more companies publish reports on ESG performance, like disclaimers on forward-looking statements in SEC filings, companies are beginning to include disclaimers in their ESG reports, which disclaimers may or may not provide protection against potential litigation risks. In many cases, the language found in ESG reports will mirror language in SEC filings, though some companies have begun to tailor them specifically to the content of their ESG reports.
From our limited survey of companies across four industries that receive significant pressure to publish such reports—Banking, Chemicals, Oil & Gas and Utilities & Power—the following preliminary conclusions were drawn:
All companies surveyed across all sectors have some type of “forward-looking statement” disclaimer in their SEC filings; however, these were generic disclaimers that were not tailored to ESG-specific facts and topics or relating to items discussed in their ESG reports.
Most companies had some sort of disclaimer in their Sustainability Report, although some were lacking one altogether. Very few companies had disclaimers that were tailored to the specific facts and topics discussed in their ESG reports:
In the Oil & Gas industry, one company surveyed had a tailored ESG disclaimer in its ESG Report; all others had either the same disclaimer as in SEC filings or a shortened version that was generally very broad.
In the Banking industry, two companies lacked disclaimers altogether, but the rest had either their SEC disclaimer or a shortened version.
In the Utilities & Power industry, one company had no disclaimer, but the rest had general disclaimers.
In the Chemicals industry, three companies had no disclaimer in their reports, but the rest had shortened general disclaimers.
There seems to be a disconnect between the disclaimers being used in SEC filings and those found in ESG In particular, ESG disclaimers are generally shorter and will often reference more detailed disclaimers found in SEC filings.
Best Practices: When drafting ESG disclaimers, companies should:
Draft ESG disclaimers carefully. ESG disclaimers should be drafted in a way that explicitly covers ESG data so as to reduce the risk of litigation.
State that ESG data is non-GAAP. ESG data is usually non-GAAP and non-audited; this should be made clear in any ESG Disclaimer.
Have consistent disclaimers. Although disclaimers in SEC filings appear to be more detailed, disclaimers across all company documents that reference ESG data should specifically address these issues. As more companies start incorporating ESG into their proxies and other SEC filings, it is important that all language follows through.
Key Takeaway 2: ESG Reporting Can Pose Risks to a Company
This article highlighted the clear risks associated with inattentive ESG disclosure: potential litigation; bad publicity; and significant costs, among other things.
Best Practices: Companies should ensure statements in ESG reports are supported by fact or data and should limit overly aspirational statements. Representations made in ESG Reports may become actionable, so companies should disclose only what is accurate and relevant to the company.
Striking the right balance may be difficult; many companies will under-disclose, while others may over-disclose. Companies should therefore only disclose what is accurate and relevant to the company. The US Chamber of Commerce, in their ESG Reporting Best Practices, suggests things in a similar vein: do not include ESG metrics into SEC filings; only disclose what is useful to the intended audience and ensure that ESG reports are subject to a “rigorous internal review process to ensure accuracy and completeness.”
Key Takeaway 3: ESG Reporting Can Also be Beneficial for Companies
The threat of potential litigation should not dissuade companies from disclosing sustainability frameworks and metrics. Not only are companies facing investor pressure to disclose ESG metrics, but such disclosure may also incentivize companies to improve internal risk management policies, internal and external decisional-making capabilities and may increase legal and protection when there is a duty to disclose. Moreover, as ESG investing becomes increasingly popular, it is important for companies to be aware that robust ESG reporting, which in turn may lead to stronger ESG ratings, can be useful in attracting potential investors.
Best Practices: Companies should try to understand key ESG rating and reporting methodologies and how they match their company profile.
The growing interest in ESG metrics has meant that the number of ESG raters has grown exponentially, making it difficult for many companies to understand how each “rater” calculates a company’s ESG score. Resources such as the Better Alignment Project run by the Corporate Reporting Dialogue, strive to better align corporate reporting requirements and can give companies an idea of how frameworks such as CDP, CDSB, GRI and SASB overlap. By understanding the current ESG market raters and methodologies, companies will be able to better align their ESG disclosures with them. The U.S. Chamber of Commerce report noted above also suggests that companies should “engage with their peers and investors to shape ESG disclosure frameworks and standards that are fit for their purpose.”
Le 2 août 2020, Christiaan de Brauw a publié un intéressant billet sur l’Harvard Law School Forum on Corporate Governance sous le titre « The Dutch Stakeholder Experience ».
Extrait :
Lessons learned
The Dutch experience shows that the following lessons are key to make the stakeholder-oriented governance model work in practice.
Embed a clear stakeholder mission in the fiduciary duties of the board
To have a real stakeholder model, the board must have a duty to act in the interests of the business and all the stakeholders, not only the shareholders. In shareholder models there may be some room to consider stakeholder interests. For example, in Delaware and various other US states, the interests of stakeholders other than shareholders may be considered in the context of achieving overall long-term shareholder value creation. In US states with constituency statutes, the board’s discretion is preserved: the interests of stakeholders other than shareholders can be, but do not have to be, taken into account. A meaningful stakeholder model requires the board to act in the interests of the business and all stakeholders. This is a “shall” duty, in the words of Leo Strine and Robert Eccles (see Purpose With Meaning: A Practical Way Forward, Robert G. Eccles, Leo E. Strine and Timothy Youmans, May 16, 2020). Rather than allowing for the possibility that all stakeholders’ interests will be taken into account; it should create a real duty to do so. Since 1971, boards of Dutch companies have had such a “shall” duty to follow a stakeholder mission, similar to that of a benefit corporation in, for example, Delaware.
The stakeholder duty must be clear and realistic for boards in the economic environment in which they operate. To define the contours of such a mission in a clear and practical way is not easy, as the journey of the Dutch stakeholder model shows. Today, the Netherlands has a meaningful and realistically defined fiduciary duty for boards. The primary duty is to promote the sustainable success of the business, focused on long-term value creation, while taking into account the interests of all stakeholders and ESG and similar sustainability perspectives. These principles are broadly similar to the corporate purpose and mission proposed by Martin Lipton and others (see On the Purpose of the Corporation, Martin Lipton, William Savitt and Karessa L. Cain, posted May 27, 2020).
Critics of the stakeholder model sometimes point to the ambiguity and lack of clarity of such a pluralistic model. The developments of the Dutch stakeholder model since its inception show that a pluralistic model can work in practice. By now, Dutch boards’ overriding task is adequately clear and aligned with what is typically expected of a company’s executives: pursuing the strategic direction that will most likely result in long-term and sustainable business success. The Dutch stakeholder model also has a workable roadmap to deal with stakeholders’ interests, particularly if they diverge or cannot all be protected fully at the same time, which necessarily results in trade-offs between stakeholders. A realistic approach to governance acknowledges that a stakeholder model does not mean that boards can or should seek to maximize value for all the stakeholders equally and at the same time. It is simply unrealistic to simultaneously pay (and progressively increase) dividends, increase wages and improve contract terms, while also promoting the success of the business. The Dutch interpretation of the stakeholder model, as developed through practice over decades, boils down to the focus on the sustainable success of the business and long-term value creation. As said above, stakeholders are protected by the board’s duty to prevent disproportionate or unnecessary harm to any class of stakeholders. Boards should avoid or mitigate such harm, for example, by agreeing “non-financial covenants” in a takeover. This makes sense as a way to protect stakeholder interests in a realistic manner, much more so than merely requiring boards—without any further guidance—to create value for all the stakeholders.
A stakeholder-oriented model should also be modern and flexible enough to address and incorporate important developments. The Dutch model is especially well positioned to embrace ESG and similar sustainability perspectives. For example, the Dutch company DSM has successfully illustrated this, while being profitable and attractive for investors. There is growing appreciation that being a frontrunner in ESG is required for sustainable business success. In addition to the fact that ESG is required for continuity of the business model and can often give a company a competitive edge, stakeholders increasingly require it. Simply “doing the right thing”, as an independent corporate goal, is more and more seen as important by (new millennial) employees, customers, institutional investors and other stakeholders.
There is no standard test to determine whether a business has achieved sustainable success. There will be different ways to achieve and measure success for different companies, depending on the respective circumstances. Therefore, the test will always have to be bespoke, implemented by the board and explained to stakeholders.
The Dutch stakeholder model has proven to work quite well in times of crisis, such as today’s Covid-19 crisis, as it bolsters the board’s focus on the survival and continuity of the business. The board must first assess whether there is a realistic chance of survival and continuity of the business. If not, and if insolvency becomes imminent, the board’s duties transform to focus on creditors’ interests, such as preventing wrongful trading and the winding down or restarting of the business in line with applicable insolvency/restructuring proceedings. Driven by the economic reality and the need to survive, in times of crisis, boards typically have more freedom to do what it takes to survive: from pursuing liquidity enhancing measures, implementing reorganizations, suspending dividends to shareholders and payments to creditors and so on. The success of the business remains the overriding aim, and in some cases harm to one or more classes of stakeholders may need to be accepted. In addition, in a true stakeholder model, in times of crisis there may not be sympathy for corporate raiders or activists (so-called “corona profiteers” in the current case) who want to buy listed companies on the cheap. A just say not now defense in addition to the just say no defense will readily be available for boards who are occupied with dealing with the crisis and revaluating the best strategic direction. This idea that during the Covid-crisis protection against activists and hostile bidders may be needed seems to be understood as well by, for example, ISS and Glass Lewis, evidenced by their willingness to accept new poison pills for a one year duration (see, for example, ISS and Glass Lewis Guidances on Poison Pills during COVID-19 Pandemic, Paul J. Shim, James E. Langston, and Charles W. Allen, posted on April 26, 2020).
Teeth to protect the stakeholder mission and appropriate checks and balances
The Netherlands has adopted a model in which matters of strategy are the prerogative of the executive directors under supervision of the non-executive directors or, in the still widely used two-tier system, of the management board under supervision of the supervisory board. Similar to the discretion afforded to directors under Delaware’s business judgment rule, a Dutch board has a lot of freedom to choose the strategic direction of the company. In a dispute, the amount of care taken by the board in the decision-making process will be scrutinized by courts, but normally objectively reasonable decisions will be respected. In the Dutch model the board is the captain of the ship; it is best equipped to determine the course for the business and take difficult decisions on how to serve the interests of stakeholders. Generally, the board has no obligation to consult with, or get the approval of, the shareholders in advance of a decision.
At the same time, in recognition of the significant power that boards have in the Dutch stakeholder model, there should be checks and balances to ensure the board’s powers are exercised in a careful manner, without conflicts of interest and without entrenchment. Non-executive/supervisory directors will need to exercise critical and hands-on oversight, particularly when there are potential conflicts of interest. Further, shareholders and other stakeholders are entitled to hold boards to account: boards need to be able to explain their strategic decisions. Shareholders can use their shareholder rights to express their opinions and preferences. Shareholders can also pursue the dismissal of failing and entrenched boards. Boards need regular renewed shareholder mandates through reappointments. The courts are the ultimate guardian of the stakeholder model. The Dutch Enterprise Chamber at the Amsterdam Court of Appeals, which operates in a comparable manner to the Delaware Chancery Court, is an efficient and expert referee of last resort.
The stakeholder model should not convert to a shareholder model in takeover scenarios. The board should focus on whether a takeover is the best strategic option and take into account the consequences for all the stakeholders. In most cases, the best strategic direction for the business will create the highest valuation of the business. But, and this is a real difference with shareholder models, it should be acknowledged that the stand-alone (or other best strategic) option can be different from the strategic option favored by a majority of the shareholders and the option that creates the most shareholder value. This principle was confirmed by the Dutch Enterprise Chamber in 2017 in the AkzoNobel case.
A meaningful stakeholder model requires teeth. The right governance structures need to be put in place to create and protect the long-term stakeholder mission in the face of short-term market pressure. The reality—in the Netherlands as well as in the US—is that shareholders are the most powerful constituency in the stakeholder universe, with the authority to replace the board. In Dutch practice, various countervailing measures can be used to protect the stakeholder mission. A commonly used instrument is the independent protection foundation, the Dutch poison pill. The independent foundation can exercise a call option and acquire and vote on preference shares. It can neutralize the newly acquired voting power of hostile bidders or activists and is effective against actions geared at replacing the board, including a proxy fight. Once the threat no longer exists, the preference shares are cancelled. These measures have been effective, for example, against hostile approaches of America Movil for KPN (2013) and Teva for Mylan (2015).
Foster a stakeholder mindset, governance and environment
Perhaps the most important prerequisite for a well-functioning stakeholder model is the actual mindset of executives and directors. This mindset drives how they will use their stakeholder powers. Fiduciary duties—also in a stakeholder model—are “open norms” and leave a lot of freedom to boards to pursue the strategic direction and to use their authority as they deem fit. The prevailing spirit and opinions about governance are important, as they influence how powers are interpreted and exercised. As an example, the Dutch requirement that boards need to act in the interest of the company and its business dates from 1971, but that did not prevent boards in the 2000s from seeing shareholders as the first among equals. Today, the body of ideas about governance in the developed world is tending to converge towards stakeholder-oriented governance. This seems to indicate a fundamental change in mindset, not merely a fashionable trend or lip service. Board members with a stakeholder conviction should not be afraid to follow their mission, even if it runs counter to past experience or faces shareholder opposition. Of course, the future will hold the ultimate test for the stakeholder model. Can it, in practice, deliver on its promise to create sustainable success and long-term value and provide better protection for stakeholders? If so, this will create a positive feedback loop in which more boards embrace it.
Stakeholder-based governance models remain works in progress. In order to succeed in the long term, models that grant boards the authority to determine the strategy need to stay viable and attractive for shareholders. Going forward, boards following a stakeholder-based model will likely need to focus more on accountability, for example by concretely substantiating their strategic plans and goals and, where possible, providing the relevant metrics to measure their achievements. In reality, stakeholder models are already attractive for foreign investors: about 90% of investors in Dutch listed companies are US or UK investors. In addition, developments in the definition of the corporate purpose will further refine the stakeholder model. In the Netherlands, there has been a call to action by 25 corporate law professors who argue that companies should act as responsible corporate citizens and should articulate a clear corporate purpose.
To make stakeholder governance work, ideally, all stakeholders are committed to the same mission. It is encouraging that key institutional investors are embracing long-term value creation and the consideration of other stakeholders’ interests, for instance by supporting the New Paradigm model of corporate governance and stewardship codes to that effect. However, the “proof of the pudding” is whether boards can continue to walk the stakeholder talk and pursue the long-term view in the face of short-term pressure, either through generally accepted goals and behavior or, if necessary, countervailing governance arrangements. Today, it is still far from certain whether institutional investors will reject pursuing a short-term takeover premium, even where they consider the offer to be undervalued or not supportive of long-term value creation. Annual bonuses of the deciding fund manager may depend on accepting that offer. Until the behavior of investors in such scenarios respects the principle of long-term value creation, appropriate governance protection is important to prevent a legal pathway for shareholders to impose their short-term goals. Therefore, even in jurisdictions where stakeholder-based approaches have been embraced, and are actually pursued by boards, governance arrangements might need to be changed to make the stakeholder mission work in practice. Clear guidance for boards is needed on what the stakeholder mission is and how to deal with stakeholders’ interests, as well as catering for adequate powers and protection for boards.
The Dutch model, which requires a company to be business success-driven, have a “shall duty” to stakeholders that applies even in a sale of the company, and that recognizes that corporations are dependent on stakeholders for success and have a corresponding responsibility to stakeholders, has been demonstrated to be consistent with a high-functioning economy. By highlighting the Dutch system, however, I do not mean to claim that it is unique. For policymakers who are considering the merits of a stakeholder-based governance model, the Dutch system should be seen as one example among many corporate governance systems in successful market economies (such as Germany) that embrace this form of stakeholder-based governance. There is likely no one-size-fits-all approach; each jurisdiction should find the tailor-made model that works best for it, like perhaps the introduction of the corporate purpose in the UK and France. In any event, there is a great benefit in exchanging ideas and learning from experiences in different jurisdictions to find common ground and best practices in order to increase the acceptance and appreciation of stakeholder-oriented governance models.
US governance practices have been, and are, influential around the world. In the 2000s the pendulum in developed countries, including to some extent in the Netherlands, clearly swung in the direction of shareholder-centric governance as championed in the US. In the current environment, if the US system’s focus on shareholders is not adjusted to protect stakeholder interests, it may over time perhaps become an outlier among many of the world’s leading market economies that in one way or the other have adopted a stakeholder approach. Adjustment towards stakeholder governance seems certainly possible in the US, for example through the emerging model of corporate governance, the Delaware Public Benefit Corporation. The benefit corporation seems to have many if not all of the key attributes of the Dutch system and could provide a promising path forward if American corporate governance is to change in a way that makes the US model truly focused on the long-term value for all stakeholders. The question for US advocates of stakeholder governance is whether they will embrace it, or adopt another effective governance change, and make their commitment to respect stakeholders rea
Bonjour à toutes et à tous, voici une belle information pour celles et ceux intéressés par les problématiques de gouvernance et de droit des marchés. La province de l’Ontario a mis en place un groupe de travail pour envisager des réformes à l’encadrement réglementaire. 70 propositions ont été faites et la consultation sur celles-ci est ouverte jusqu’en septembre 2020 : « Capital Markets Modernisation Taskforce ».
Voici un résumé des principales pistes explorées… vraiment intéressant !
Extrait :
The CMMT was formed in February 2020 and reports directly to the Minister of Finance. It was tasked to develop “bold, innovative recommendations” to improve how capital markets function in Canada.
Twelve of the drafted proposals specifically target shareholder voting and company transparency, with the taskforce identifying an “imbalance” among Canada’s proxy and shareholder voting systems. Several stakeholders raised concerns to the CMMT about the influence of proxy advisors, errors in their reports and potential conflicts of interests where voting recommendations and consulting services were provided to the same businesses.
To remedy this, the CMMT proposes establishing a new regulatory framework that would provide companies with the right to ‘rebut’ reports from proxy advisors. In addition, the taskforce also hopes to restrict conflicts of interest by limiting the services proxy advisors can offer.
Several of the other proposals are aimed at reforming and improving the proxy plumbing. For instance, currently in Canada, the majority of shareholder votes are cast via proxies using either the company’s or dissident’s proxy ballot. Unfortunately, this means such proxy cards can look different and often confuse investors.
Therefore, the CMMT proposes the use of universal proxy ballots to improve standardisation and mandate voting disclosure for each side when a dispute arises.
At the same time, the taskforce has also proposed introducing rules to prevent over-voting and the requirement for companies listed on the Toronto Stock Exchange to have an annual shareholder votes on executive compensation. In further efforts to improve corporate governance standards, the taskforce proposes further legislative guidance be made around the role of independent directors in a bid to avoid conflicts of interest from arising, arguing that current laws do not fully address the role such directors play.
Elsewhere, the taskforce wants to reduce the ownership threshold for early warning reporting disclosure in Canadian companies from 10% to 5%. This would bring Canada in line with other major markets, with the CMMT also acknowledging that a shareholder can currently requisition a meeting with a holding of as little as 5%.
In a bid to improve transparency, the CMMT is also proposing the adoption of quarterly filing requirements for institutional investors of Canadian companies and – in a very encouraging step – the introduction of enhanced disclosure of material ESG information.
With stronger ESG reporting, Canada would be following in the footsteps of other jurisdictions and create a level playing field for its companies. In particular the taskforce identified the metrics used by the Sustainability Accounting Standards Board (SASB) and Taskforce on Climate-related Financial Disclosures (TCFD) as potential solutions.
Other CMMT’s recommendations include giving regulators new and enhanced powers when dealing with listed entities. For instance, the taskforce has proposed empowering the Ontario Securities Commission (OSC) to issue no-action letters. This already happens in the US where a company can seek a no-action letter from the Securities and Exchange Commission when it has the basis to exclude a particular shareholder proposal.
The CMMT has also proposed the introduction of broader remedies for the OSC when dealing with mergers and acquisitions. The taskforce proposes granting the OSC similar powers to those recently granted to the British Columbia Securities Commission, which can now rescind a transaction, require a person to dispose of securities in connection with a deal or even prohibit them from exercising voting rights.
En cette période estivale, suivre l’actualité est toujours intéressant. Ma lecture d’un article ce matin « Renewed Interest in IPOs of Public Benefit Corporations » (de Cydney Posner) m’apprenait que l’État américain du Delaware est en train de débattre d’une réforme législative en matière d’entreprise à mission !
These and other similar risks are some of the reasons that, in adopting laws authorizing PBCs, the Delaware legislature made it particularly difficult to convert a traditional corporation to a PBC. For example, currently, the approval of 2/3 of the outstanding stock is required for a traditional corporation to amend its certificate of incorporation to become a PBC or to merge with another entity if the effect of the merger is to convert the shares into shares of a PBC. (Note that, originally, the vote required for conversion was 90%, which made it well nigh impossible for a traditional public company to convert to a PBC.) Appraisal rights are available to stockholders that did not vote in favor of the conversion or merger. And the same vote is required for conversion from a PBC form of entity into a traditional corporation.
The legislation that was just passed by the House in Delaware would, if ultimately signed into law, eliminate the 2/3 voting requirements, making it easier to convert a traditional corporation to a PBC or a PBC to a traditional corporation. Only the standard stockholder vote provisions would be applicable—generally a vote of a majority of the outstanding shares (or any greater or other vote required under the company’s certificate of incorporation) would be required. The amendments would also eliminate the special appraisal rights provisions, with the result that appraisal rights would not be available for conversions resulting from amendments to the certificate, but standard appraisal rights (§262) would be available in the context of mergers.
In addition, as noted above, the current PBC statute mandates that the board of directors manage the business and affairs of the PBC by balancing “the pecuniary interests of the stockholders, the best interests of those materially affected by the corporation’s conduct, and the specific public benefit or public benefits identified in its certificate of incorporation.” The statute provides that, with respect to a decision implicating the “balance requirement,” directors of PBCs will be deemed to satisfy their fiduciary duties to stockholders and the corporation if their decision “is both informed and disinterested and not such that no person of ordinary, sound judgment would approve.” A PBC is also permitted to include in its certificate, for purposes of its director exculpatory provisions under §102(b)(7) and its indemnification provisions under §145, that any disinterested failure to satisfy the mandate will not be considered to “constitute an act or omission not in good faith, or a breach of the duty of loyalty.”
The new legislation would also amp up the protections for directors of a PBC. The amendments would clarify that a director would not be considered “interested” in connection with a balancing decision solely because of the director’s interest in stock of the corporation, except to the extent that the same ownership would create a conflict of interest if the corporation were not a PBC. The amendments would also provide that, in the absence of a conflict, no failure to satisfy the balancing requirement would, for purposes of §102(b)(7) or §145, be considered “an act or omission not in good faith, or a breach of the duty of loyalty, unless the certificate of incorporation so provides.” That is, the certificate would no longer need to expressly provide for the protection for it to apply. In addition, the amendments would provide that, to bring any lawsuit to enforce the PBC balancing requirement, the plaintiffs must own at least 2% of the corporation’s outstanding shares or, for PBCs listed on a national securities exchange, shares with a market value of at least $2 million, if lower.
L’évolution actuelle du droit des affaires démontre une influence considérable de la Responsabilité Sociétale des Entreprises (RSE) dans la gouvernance des sociétés. Suite à de nombreux scandales d’envergure internationale, le choix de la RSE se dessine désormais comme un incontournable pour les entrepreneurs d’aujourd’hui et de demain. Le droit traduit cette nouvelle orientation du système économique au travers de l’évolution combinée du droit dur et du droit souple. L’émergence depuis plusieurs années d’entreprises à mission sociétale en constitue une illustration marquante. Toutefois, le risque d’aboutir à une RSE sans contenu est présent, comme l’illustre la thématique connue de « l’écoblanchiment ». Pour y faire face, le droit a passé la vitesse supérieure avec la récente réforme française portée par le projet de loi PACTE. Ces nouveaux mécanismes, souvent salués et parfois institutionnalisés, posent tout de même la question de l’efficacité pour la RSE d’irriguer la sphère économique, de savoir si le droit se construit de la bonne manière et, finalement, de déterminer si cette finance sociale est une réelle opportunité d’appropriation sociétale pour ces organisations qualifiées d’hybrides.
