Valeur actionnariale vs. sociétale | Page 6

Le Harvard Law School Forum on Corporate Governance and Financial Regulation propose un bel article sous la plume de Frederick Alexander : « Moving Beyond Shareholder Primacy: Can Mammoth Corporations Like ExxonMobil Benefit Everyone? ». Une belle occasion de revenir sur le thème de la Benefit Corporation et de la remise en cause de la primauté actionnariale dont elle peut être la cause…

The New York Times recently took issue with Rex Tillerson, the President-elect’s nominee for Secretary of State, and the current CEO of ExxonMobil. Why? “Tillerson Put Company’s Needs Over U.S. Interests,” accused the front page headline. The article details how the company puts shareholders’ interests before the interests of the United States and of impoverished citizens of countries around the world.

In response, a company spokesman insisted that all laws were followed, and that “‘[a]bsent a law prohibiting something, we evaluate it on a business case basis.’” As one oil business journalist puts it in the article: “‘They are really all about business and doing what is best for shareholders.’” Thus, as long as a decision improves return to shareholders, its effect on citizens, workers, communities or the environment just doesn’t rank.

Unfortunately, this idea—evaluate the “business” case, without regard to collateral damage, permeates the global capital system. Corporations are fueled by financial capital, which ultimately comes from our bank accounts, pension plans, insurance premiums and mutual funds, and from foundations and endowments created for public benefit—in other words, our money. And yet when that capital is invested in companies that ignore societal and environmental costs, we all suffer: Corporations use our savings to drive climate change, increase political instability, and risk our future in myriad ways.

The good news is that structures like “benefit corporations” can help us repair our broken system of capital allocation—but the clock is ticking.

À la prochaine…

Ivan Tchotourian

Dans « Why Enron Remains Relevant » (Harvard Law School Forum on Corporate Governance and Financial Regulation, 2 décembre 2016), Michael W. Peregrine aborde les leçons de l’affaire Enron, 15 ans après. Un bel article !

The fifteenth anniversary of the Enron bankruptcy (December 2, 2001) provides an excellent opportunity for the general counsel to review with a new generation of corporate officers and directors the problematic board conduct that proved to have seismic and lasting implications for corporate governance. The self-identified failures of Enron director oversight not only led to what was at the time the largest bankruptcy in U.S. history, but also served as a leading prompt for the enactment of the Sarbanes-Oxley Act, and the corporate responsibility movement that followed. For those reasons, the Enron bankruptcy remains one of the most consequential governance developments in corporate history.

Enron evolved from a natural gas company to what was by 2001 a highly diversified energy trading enterprise that pursued various forms of particularly complex transactions. Among these were the soon-to-be notorious related party transactions in which Enron financial management executives held lucrative economic interests. (These were the so-called “Star Wars” joint ventures, with names such as “Jedi”, “Raptor” and “Chewco”). Not only was Enron’s management team experienced, both its board and its audit committee were composed of individuals with broad and diverse business, accounting and regulatory backgrounds.

In the late 1990s the company experienced rapid growth, such that by March 2001 its stock was trading at 55 times earnings. However, that rapid growth attracted substantial scrutiny, including reports in the financial press that seriously questioned whether such high value could be sustained. These reports focused in part on the complexity and opaqueness of the company’s financial statements, that made it difficult to accurately track its source of income.

By mid-summer 2001 its share price began to drop; CEO Jeff Skilling unexpectedly resigned in August; the now-famous Sherron Watkins whistleblower letter was sent (anonymously) to Board Chair Ken Lay on August 15. On October 16, the company announced its intention to restate its financial statements from 1997 to 2007. On October 21 the SEC announced that it had commenced an investigation of the related party transactions. Chief Financial Officer Andrew Fastow was fired on October 25 after disclosing to the board that he had earned $30 million from those transactions. On October 29, Enron’s credit rating was lowered. A possible purchaser of Enron terminated negotiations on November 28, and the company filed for Chapter 11 bankruptcy protection on December 2.

The rest became history: the collapse of the company; the individual criminal prosecutions and convictions; the obstruction of justice verdict against company and, for Arthur Andersen (subsequently but belatedly overturned); the loss of scores of jobs and the collateral damage to the city of Houston; Mr. Lay’s sudden death; and, ultimately the 2002 enactment of the Sarbanes Oxley Act, which was intended to prevent future accounting, financial and governance failings as had occurred in Enron and other similar corporate scandals. But a 2016 Enron board briefing would be much more than a financial history lesson. For the continuing relevance of Enron is at least two-fold

À la prochaine…

Ivan Tchotourian

Marc T. Moore offre un beau papier sur la place de la valeur actionnariale en Grande-Bretagne dans une perspective historique : « Shareholder Primacy, Labour and the Historic Ambivalence of UK Company Law » (Oxford University, 20 septembre 2016).

Most directors and senior managers of British companies would likely regard it as trite law that, in undertaking their functions, they are accountable first and foremost to their employer firm’s general body of shareholders. It follows that the interests of other corporate constituencies – and, in particular, those of employees – must ultimately cede to those of shareholders in the event of conflict. Although frequently taken for granted today, the lexical priority that the British company law framework affords to the interests of shareholders is remarkable, not least when viewed alongside the correspondingly disempowered corporate governance status of labour in the UK.

On first reflection, it is somewhat curious that the interests of employees have not figured more prominently within British company law, especially when one considers the general political disposition of the country in modern times. Throughout the course of the last century, the UK has witnessed 37 years of Labour government (or 42 years if one includes Labour’s participation in the wartime coalition government). And although the UK is acknowledged on the whole as having a more neo-liberal (ie right-wing) political orientation than many of its northern European counterparts, it nonetheless has a comparatively strong social-democratic (ie left-wing) political tradition in relation to other English-speaking and former-Commonwealth countries, at least since the Second World War. It is thus not unreasonable to expect that, at some point during the post-war era, democratic public policy measures might have been taken to effect the direct integration of worker interests into the heart of the British corporate legal structure.

Une de ses conclusion est intéressante :

However, whilst the centrality of shareholders’ interests to the doctrinal and normative fabric of contemporary UK company law is both manifest and incontrovertible, this has curiously not always been the case. With respect to the fundamental question of the proper corporate objective (that is, as to whose interest British company directors are expected to serve while carrying out their functions), UK company law up until 2006 adopted a highly ambiguous position. Moreover, British company law has in the fairly recent past come precariously close to adopting a radically different board representation model, in which worker interests would formally have shared centre-stage with those of shareholders in a similar vein to the traditional German corporate governance model.

À la prochaine…

Ivan Tchotourian

Bonjour à toutes et à tous, Mhir Naniwadekar et Umakanth Varottil publient un billet sur le blog de l’Université Oxford sous le titre : « Directors’ Duties and Stakeholder Interests: Comparing India and the United Kingdom » (28 août 2016). Vraiment intéressant et qui montre toute l’incertitude de la protection des parties prenantes malgré les nouveaux articles 172 au Royaume-Uni et 166 en Inde !

La version longue de ce papier est à consulter sur SSRN : Mihir Naniwadekar et Umakanth Varottil, « The Stakeholder Approach Towards Directors’ Duties Under Indian Company Law: A Comparative Analysis » (August 11, 2016). NUS – Centre for Law & Business Working Paper No. 16/03; NUS Law Working Paper No. 2016/006.

Quelle conclusion ?

Our principal thesis in this paper is that while section 166(2) of the 2013 Act in India, at a superficial level, extensively encompasses the interests of non-shareholder constituencies in the context of directors’ duties and textually adheres to the pluralist stakeholder approach, a detailed analysis based on an interpretation of the section and the possible difficulties that may arise in its implementation substantially restricts the rights of stakeholders in Indian companies. Moreover, while the stated preference of the Indian Parliament veers towards the pluralist approach that recognizes the interests of shareholders and non-shareholder constituencies with equal weight, the functioning of the Companies Act, as well as the principles of common law relating to directors’ duties, make the Indian situation not altogether different from the ESV model followed in the UK. As such, proponents of the stakeholder theory in India should not declare victory with the enactment of section 166(2). Arguably, the magnanimity of its verbiage and rhetoric in favour of stakeholders merely pays lip service to them and obscures any real teeth or legal ammunition available to non-shareholder constituencies to assert those rights as a matter of law.

À la prochaine…

Ivan Tchotourian

Voilà la théorie des parties prenantes pleinement appréhendée par le droit ! Le cas de l’entreprise française Morlex démontre que le droit français protège d’autres parties prenantes que les simples actionnaires et que le droit a pleinement un rôle à jouer. Le Monde vient de publier l’issue d’un litige qui opposait entreprise et salariés dans le cadre d’une décision prise en faveur des actionnaires : « Molex : le licenciement de 191 salariés jugé « sans cause réelle ni sérieuse » »

Après des années de combat, les « Molex » obtiennent une victoire de taille. Mardi 9 août, la cour d’appel de Toulouse a jugé « sans cause réelle ni sérieuse » le licenciement de 191 salariés du groupe de connectique automobile Molex, dont l’usine de Villemur-sur-Tarn (Haute-Garonne) a fermé en 2009. La justice a estimé que l’employeur avait agi « avec légèreté » dans ces licenciements et a accordé au total environ 7 millions d’euros d’indemnités

(…) La décision de fermer l’usine de Villemur-sur-Tarn a été prise « alors que le secteur n’était pas en difficulté », a encore jugé la cour d’appel, selon l’avocat. « Tous les rapports révèlent qu’au cours de la période 2004-2009, les dividendes versés aux actionnaires par le groupe ont été multipliés par six et représentaient en 2009 un montant total de 100 millions de dollars (environ 72 millions d’euros, au taux de l’époque) », peut-on en effet lire dans l’arrêt.

À la prochaine…

Ivan Tchotourian

En voilà une question allez-vous me répondre et pourtant… Un récent article du Harvard Business Review de Suntae Kim, Matthew Karlesky, Christopher Myers et Todd Schifeling intitulé « Why Companies Are Becoming B Corporations » aborde la question de face.

2 raisons essentielles sont identifiées :

1. First, as large established firms have ramped up their corporate social responsibility efforts, small businesses that have long been committed to social and environmental causes want to prove that they are more genuine, authentic advocates of stakeholder benefits.
2.  The qualitative evidence, gathered from firms’ B corporation application materials, revealed that certifying firms believed “the major crises of our time are a result of the way we conduct business,” and they became a B Corporation to “join the movement of creating a new economy with a new set of rules” and “redefine the way people perceive success in the business world.”

So why do certain firms (and not others) choose to identify as B Corporations? Individual leaders are partly why some organizations broaden their purpose beyond maximizing shareholder value. We might look to Sir Richard Branson, who in 2013 co-launched the “B Team,” publicly decrying corporations’ sole focus on short-term profits and calling for a reprioritization of people- and planet-focused performance. We might also consider leaders of firms like Ben & Jerry’s or Patagonia (both B Corporations) that have prioritized societal and environmental agendas.

Clearly, such leaders can be important catalysts of social change. However, the explosive growth of B Corporations seems also to be driven by broader trends and changes in the corporate landscape that cannot be explained by individuals’ actions alone.

Two of us (Suntae Kim and Todd Schifeling) conducted research to build a more robust understanding of the rise of B corporations. By qualitatively examining the internal motives of firms in the process of becoming a B corporation, and quantitatively testing key factors in these firms’ external industry environment – including the shareholder- and stakeholder-focused behaviors of their corporate competitors – we found that there are at least two major underlying reasons why firms choose to seek B Corporation certification.

À la prochaine…

Ivan Tchotourian