Investir pour changer le monde
Dossier intéressant dans Les affaires : « Investir pour changer le monde – Quel impact réel a-t-il sur le portefeuille? ».
À l’intérieur, vous trouverez notamment les articles suivants :
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Dossier intéressant dans Les affaires : « Investir pour changer le monde – Quel impact réel a-t-il sur le portefeuille? ».
À l’intérieur, vous trouverez notamment les articles suivants :
À la prochaine…
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).
The discussion focuses on the key challenges facing Canada’s corporate leaders as the reopening phase approaches:
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Le 30 avril 2020, Philip Gavin s’est interrogé sur l’intérêt de l’article 172 du Company Act pour les administrateurs et dirigeants dans le contexte de la COVID-19 : « Directors’ Duty under UK Law to Promote the Success of the Company during the COVID-19 Pandemic » (Oxford Business Law Blog).
A nuance to director’s duties in the United Kingdom is the expansive statutory delineation of s 172, which endows numerous considerations for directors when acting to promote the success of the company for the benefit of members. Given the unique circumstances of the present-day commercial sphere and the more humanitarian demands being put to businesses, having a statutory foundation upon which to base non-traditional business strategies may assist effective decision-making and financial reporting.
The initial three considerations enshrined within s 172 are (a) the likely long term consequences of any decision, (b) the interests of employees and (c) the need to foster business relationships with suppliers, customers and others. These factors are of particular relevance for firms who sought justification for voluntary shutdown of businesses prior to the wider governmental shutdown.
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Where production changes become quasi-humanitarian in tone and companies internalise cost in the interim, directors may seek justification through s 172(1)(d) and (e), these being the impact on the community and the desirability of maintaining high business standards respectively. Accordingly, directors can seek to frame these quasi-humanitarian efforts in long-term reputational terms, thereby engendering prospective communitarian goodwill.
Furthermore, as political pressure mounts, boards may evaluate reputational factors not simply in terms of market reputation, but also in terms of Governmental co-operation. This is particularly so where companies face increased intervention by public authorities through the Civil Contingencies Act. Comparatively, in a recent memorandum the Trump administration has attempted to exert control over the distribution of ventilators by the multinational conglomerate 3M. Cautious of such intervention occurring within their own enterprises, companies may shift business operations to such an extent to signal their compliance and co-operation with public authorities, thereby disincentivising the wholesale overrule of board discretion.
Within jurisdictions with vaguer duties to act bona fide in the best interests of the company (Delaware, Australia, Ireland), directors may still engage in such quasi-humanitarian efforts. Nevertheless, utilising s 172 to steer directorial judgment may assist effective decision-making, and furthermore guide financial reporting, which mandates s 172 director’s statements. Given that the tenor of 2020 reports will be likely dominated by COVID-19, UK directors will benefit from the homogenising structure of s 172 when making such disclosures in the coming months.
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Me Ravipal S Bains propose une belle synthèse des conséquences de la COVID-19 sur la gouvernance d’entreprise : « Emerging Corporate Governance Considerations for the Post-COVID-19 World » (Oxford Business Law Blog, 12 mai 2020). Une belle synthèse des questionnements qui agitent la gouvernance d’entreprise actuellement !
Board Oversight
Board charters, if they don’t already, will need to cover global pandemics, including COVID-19, as one of the risks that directors should oversee. Given the on-going impact, companies will want to consider the timing of updated duties and responsibilities. While risk governance frameworks are generally updated annually, some may not want to wait and revise as soon as practicable. For instance, earlier this month The Home Depot Inc. added COVID-19 pandemic and related risks to the areas of the board’s risk oversight. Boards are also likely to weigh-up obtaining coverage for pandemic risk insurance, perhaps like the prescient Wimbledon managers.
Executive Compensation
Compensation committees will have to consider whether metrics used in executive compensation plans should take into account material drops in share prices and earnings in 2020. Although these decisions will be reviewed in the 2021 proxy season, boards may provide advance disclosure of such changes. Proxy advisory firm Institutional Shareholder Services Inc., has already indicated that while it generally does not support midstream changes, it will assess amendments if an adequate explanation is provided. Alternatively, if metrics are adjusted less aggressively and the share price recovers, directors will have to evaluate if the executives stand to receive a windfall gain.
Earnings Guidance
Many management teams are facing an uphill task of providing guidance regarding the impact of COVID-19 on operations, revenues, and risks. The challenge is that even the best forward-looking disclosure may need to be revised due to pandemic-related factors outside of their control. Not surprisingly, many public companies have withdrawn or revised their previous earnings guidance. To quell this uncertainty in the US, the Securities and Exchange Commission (SEC) issued a statement urging companies to provide fulsome forward-looking information, including expectations regarding operating conditions and resource needs. The SEC also asked companies to avail safe harbours and noted it would not second-guess good faith attempts at providing forward-looking information.
Succession Planning
After the crisis, expect more focus on comprehensive succession planning policies that contemplate different scenarios, beyond a mere CEO transition, and changeover in non C-suite positions. These could include more defined temporary incapacity assessments and consequences of prophylactic requirements. Boards will need to ensure that the policies provide for multiple candidates for key roles. While many public companies have robust emergency CEO succession plans, few contemplate situations where key executives are affected simultaneously. Last month, when Altria Group Inc.’s CEO tested positive for coronavirus, his successor and other members of the leadership team had to quarantine as they had contact with him.
Opportunistic Investors
With record low share prices and a dismal earnings season on the horizon, a number of once formidable companies could be vulnerable to unsolicited acquisition proposals or takeover attempts. If directors and executives expect their company to be susceptible to strategic and financial threats, they should implement appropriate responses. This may include (a) strengthening relationships with principal shareholders, (b) profiling possible strategic partners and alternative transactions, (c) observing market activity in options, derivatives, and corporate debt to promptly detect stealth accumulations, and (d) adopting defensive strategies. The spectrum of possible defensive actions depends on the jurisdiction. At least in the US and Canada, a shareholder rights plan will be a crucial device to help a target’s board discharge its fiduciary duties, deter opportunistic control block acquisitions, and maximize negotiating leverage.
Environmental and Social Governance (ESG)
Many severely impacted companies will be focused on ensuring financial survival. Many more boards will have to be cognizant that the post-pandemic environment will provide fertile grounds for ESG-focused investors to press on preparedness for, and disclosure of, non-financial risks. As the former Governor of the Bank of England Mark Carney recently noted, ‘when it’s over, companies will be judged by ‘what they did during the war,’ how they treated their employees, suppliers and customers, by who shared and who hoarded’. Management may want to convey that while pandemic has shifted short-term priorities, ESG efforts are ongoing, and highlight progress where possible. They should consider approaches for issues that will be areas of sharpened interest such as dividend payments, stock buybacks, and employee treatment.
Supply Chains
Companies, investors, and stakeholders are likely to emerge from this crisis chastened by the just-in-time, multi-step, and globally dispersed supply chains that dominate production today. Board-level oversight for supply chains, increased management engagement with critical suppliers, and nimble contingency plans for future disruptions will likely become market standard. Executives will also be encouraged to demonstrate knowledge about suppliers—not just tier 1, but also tiers 2 and 3—and to be prepared to trade elements of cost-efficiency for redundancy. Diligence reviews will be expected to cover resiliency across the board and stress-test scenarios that may have been considered too remote in the past.
Government Ownership
Directors and executives of companies who seek government support will have to carefully manage competing public and private interests. Once the state wears the dual hats of a shareholder and an investor, conflicts of interest often arise. COVID-19 interventions are unlike previous crises where government investments were ad-hoc measures targeted at specific industries, like banking and finance. Current measures offer broad-based long-term financial support with limited prospects for near-term divestitures. Governments could re-interpret the definition of ‘strategic assets’ to add new industries (eg agri-business) and act proactively to prevent foreign takeovers. Enhanced government influence could also lead to growth in cross-border competition amongst state-supported firms that will increase trade and political frictions.
Infrastructure Investments
Governments across the globe are sketching plans to fund ‘shovel-ready’ infrastructure projects to rebuild economies. This desire to kick-start projects immediately will need to be weighed against long-term viability. Staffing numerous projects concurrently with boards sufficiently knowledgeable, diverse, and experienced to oversee project delivery through to completion will be challenging. Mechanisms for periodic governance reviews will have to be built in. Investments in digital infrastructure that will likely involve private sector partners will need to include clear governance standards for data collection, use, and storage.
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Bonjour à toutes et à tous, mon nouveau billet sur Contact vient d’être publié. Il s’intéresse aux actionnaires dans le contexte de la COVID-19 et est intitulé « COVID-19: actionnaires, engagez-vous! » (10 mai 2020).
(…) Ainsi, les entreprises ont besoin des actionnaires, mais, bien au-delà de leur argent, c’est de leurs valeurs qu’elles ont besoin. La crise de la COVID-19 est une occasion unique pour ces gens d’affaires de redevenir des parties prenantes responsables, plutôt que des «actionnaires-investisseurs » qui depuis trop longtemps, comme des passagers clandestins, se cachent derrière leur irresponsabilité et la seule financiarisation des entreprises.
(…) Or, si l’engagement demeure une attitude souhaitable de la part des actionnaires en temps normal, il devient une nécessité dans le contexte de la pandémie sanitaire actuelle. Dans un moment si chaotique et incertain, la contribution des actionnaires s’avère essentielle au succès du plan de relance du Canada et du Québec. Une fois cette observation faite, encore faut-il répondre à nombre de questions: que devraient faire les actionnaires? Quelle attitude devraient-ils adopter? Comment devraient-ils s’engager?
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Les actionnaires ont certes des droits, mais il est temps qu’ils assument des obligations, notamment en matière de RSE et de gestion adéquate des parties prenantes d’une entreprise. Autrement dit, ils devraient encourager une gestion financière responsable qui permette aux entreprises de prioriser les employés, les sous-traitants, les fournisseurs et le succès à plus long terme de l’entreprise en mettant de côté les avantages consentis aux dirigeants ainsi que les rachats et les dividendes pour les actionnaires.
Avec la COVID-19, les entreprises peuvent légitimement donner corps à la RSE (voir mon billet de blogue) et dire adieu à la fameuse théorie de la primauté actionnariale. Ce n’est pas parce que le droit est (à notre sens) imparfait et donne la possibilité aux actionnaires d’agir le plus égoïstement possible (voir mon billet de blogue) que ce comportement est celui à adopter. Après tout, la crise peut être vue comme une porte ouverte vers la RSE!
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Cela fait bien longtemps que les juristes ont observé que les actionnaires se désintéressent du sort des entreprises où leurs fonds sont placés. Encore plus quand ce ne sont pas eux, mais des professionnels qui placent leurs fonds en leur nom et pour leur compte. Au fil du temps, les actionnaires se sont transformés en prêteurs qui réclament une rentabilité tout en rejetant l’investissement qu’elle implique. D’ailleurs, le droit leur impose peu d’obligations, si ce n’est de réaliser le paiement en contrepartie du titre qu’ils reçoivent. Toutefois, «[l]es choses n’ont pas été données au départ et ne sont pas pour ainsi dire naturelles».
Alors, actionnaires, retenez une chose de la crise sanitaire mondiale: que cela vous plaise ou non, il va falloir sérieusement vous engager. L’heure est venue d’entendre le clap de fin pour la responsabilité limitée des actionnaires, même si elle demeure ancrée dans le droit des sociétés par actions! C’est à ce prix que les entreprises pourront se redresser.
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Me Jessica Zhang propose un billet de blogue sur l’impact de la COVID-19 sur l’activisme actionnarial au Canada : « Impact of COVID-19 on Shareholder Activism » (7 avril 2020). Comme elle le rappelle aux CA, « Sharp declines in stock prices due to COVID-19 are making companies more vulnerable to shareholder activism and hostile attacks ».
While shareholder activism is traditionally less prevalent in Canada than in the United States, Canada can be an attractive jurisdiction for shareholder activism due to its shareholder-friendly regulatory framework that includes:
While the primary focus of many companies in the current environment is on their employee health and safety, business continuity and financial stability, boards of directors and management should not lose sight of the potential increases in shareholder activism and be prepared to defend against any hostile attacks.
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Intéressante tribune dans La presse de mes amies Emmanuelle Létourneau et Rosalie Vendette touchant la RSE et la finance sociale : « L’épinglette d’Horacio Arruda, une source d’inspiration pour les entreprises et les financiers » (La presse, 3 mai 2020).
(…) Cela se matérialise par exemple, de la part des investisseurs, par un bilan carbone des entreprises (facteur E) ou un bilan social (facteur S) ou encore une évaluation de la gouvernance (facteur G) mise en place par l’entreprise, ou encore, de sa capacité de la mettre en place.
L’effort qui est fait pour tenir compte de critères ESG, souvent effectué pour une meilleure gestion des risques auxquels ces investissements peuvent être exposés, démontre qu’il est possible de le bonifier en y ajoutant les ODD, vus comme périphériques et faisant partie du même écosystème. En effet, les ODD nous proposent d’unir nos forces en visant des buts communs.
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Que ce soit à travers la prise en compte des facteurs ESG pour une gestion des risques ou une création de valeur ou que ce soit l’adoption de nouvelles orientations en lien avec un ou plusieurs ODD, il est toujours question de responsabilité sociale des entreprises.
Celle-ci appelle à modifier la façon dont les entreprises sont gouvernées et à donner un sens particulier à leurs actions. Tant les facteurs ESG que les ODD devront être pris en compte dans le processus décisionnel des directions d’entreprise et de leur conseil d’administration, qui agira comme gouvernail.
Dans un monde post-COVID-19, où la responsabilité sociale des entreprises est mise sous les projecteurs, il y a fort à espérer que ces exigences des investisseurs et des créanciers soient plus encore orientées vers le développement durable et ses objectifs.
Alors, entreprises, tenez-vous-le pour dit : votre contribution aux ODD et les impacts positifs et négatifs que vous avez sur eux seront de plus en plus scrutés à l’avenir !
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