actualités internationales Gouvernance Normes d'encadrement objectifs de l'entreprise Responsabilité sociale des entreprises
Profit Keeps Corporate Leaders Honest
Ivan Tchotourian 9 décembre 2020 Ivan Tchotourian
Article amenant à réfléchir dans le Wall Street Journal de Alexander William Salter : « Profit Keeps Corporate Leaders Honest » (8 décembre 2020).
Extrait :
(…) As National Review’s Andrew Stuttaford notes, this vision of wide-ranging corporate beneficence introduces a host of principal-agent problems in ordinary business decision-making. Profit is a concrete and clarifying metric that allows shareholders—owners—to hold executives accountable for their performance. Adding multiple goals not related to profit introduces needless confusion.
This is no accident. Stakeholder capitalism is used as a way to obfuscate what counts as success in business. By focusing less on profits and more on vague social values, “enlightened” executives will find it easier to avoid accountability even as they squander business resources. While trying to make business about “social justice” is always concerning, the contemporary conjunction of stakeholder theory and woke capitalism makes for an especially dangerous and accountability-thwarting combination.
Better to avoid it. Since profits result from increasing revenue and cutting costs, businesses that put profits first have to work hard to give customers more while using less. In short, profits are an elegant and parsimonious way of promoting efficiency within a business as well as society at large.
Stakeholder capitalism ruptures this process. When other goals compete with the mandate to maximize returns, the feedback loop created by profits gets weaker. Lower revenues and higher costs no longer give owners and corporate officers the information they need to make hard choices. The result is increased internal conflict: Owners will jockey among themselves for the power to determine the corporation’s priorities. Corporate officers will be harder to discipline, because poor performance can always be justified by pointing to broader social goals. And the more these broader goals take precedence, the more businesses will use up scarce resources to deliver diminishing benefits to customers.
Given these problems, why would prominent corporations sign on to the Great Reset? Some people within the organizations may simply prefer that firms take politically correct stances and don’t consider the cost. Others may think it looks good in a press release and will never go anywhere. A third group may aspire to jobs in government and see championing corporate social responsibility as a bridge.
Finally, there are those who think they can benefit personally from the reduced corporate efficiency. As businesses redirect cash flow from profit-directed uses to social priorities, lucrative positions of management, consulting, oversight and more will have to be created. They’ll fill them. This is rent-seeking, enabled by the growing confluence of business and government, and enhanced by contemporary social pieties.
The World Economic Forum loves to discuss the need for “global governance,” but the Davos crowd knows this type of social engineering can’t be achieved by governments alone. Multinational corporations are increasingly independent authorities. Their cooperation is essential.
Endorsements of stakeholder capitalism should be viewed against this backdrop. If it is widely adopted, the predictable result will be atrophied corporate responsibility as business leaders behave increasingly like global bureaucrats. Stakeholder capitalism is today a means of acquiring corporate buy-in to the Davos political agenda.
Friedman knew well the kind of corporate officer who protests too much against profit-seeking: “Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” He was right then, and he is right now. We should reject stakeholder capitalism as a misconception of the vocation of business. If we don’t defend shareholder capitalism vigorously, we’ll see firsthand that there are many more insidious things businesses can pursue than profit.
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finance sociale et investissement responsable Gouvernance Normes d'encadrement normes de droit Responsabilité sociale des entreprises
Caisses de retraite au Canada : un pas de plus vers la finance verte
Ivan Tchotourian 25 novembre 2020 Ivan Tchotourian
Dans La Presse, M. Décarie relaie une information intéressante pour la RSE et l’ISR : « Huit poids lourds pour une croissance plus durable et inclusive » (25 novembre 2020).
Extrait :
Ce sont les poids lourds de l’investissement au Canada. Ensemble, ils totalisent plus de 1600 milliards d’actifs sous gestion et ils ont décidé de mettre leur masse financière dans la balance en vue de forcer les entreprises à mieux présenter les données touchant les enjeux environnementaux, sociaux et de gouvernance qui les concernent dans leur bilan d’activités.
Pour la première fois, les huit plus grands acteurs financiers au pays ont signé une déclaration commune qu’ils vont dévoiler ce mercredi et qui a le mérite d’être claire en formulant une demande simple : plus de transparence afin de permettre une meilleure prise de décision d’investissement qui tienne compte de facteurs autres que seulement financiers.
« La façon dont les entreprises définissent et abordent des enjeux tels que ceux qui concernent la diversité et l’inclusion, le capital humain et les changements climatiques peut contribuer de manière significative à la création ou à l’érosion de valeur. Les entreprises ont l’obligation de divulguer leurs principaux risques commerciaux ainsi que leurs occasions d’affaires aux marchés financiers, et elles doivent fournir des informations financièrement pertinentes, comparables et utiles à la prise de décision », résume la déclaration des huit PDG.
On le sait, chacune des huit organisations a ses propres critères d’investissement responsable et sa grille d’évaluation des enjeux environnementaux, sociaux et de gouvernance (ESG), mais en regroupant leurs voix, leurs PDG sont d’avis qu’ils auront une plus grande force de persuasion.
C’est notamment l’avis de Neil Cunningham, PDG de l’Office d’investissement des régimes de pensions du secteur public (PSP), qui estime que la déclaration commune a le mérite d’envoyer un message au marché tout en sensibilisant les entreprises à l’importance de mieux rapporter leurs performances en matière d’enjeux ESG.
Standardiser la transparence
Investissements PSP gère 168 milliards d’actifs à partir de ses bureaux montréalais où travaillent plus de 750 professionnels de l’investissement. Neil Cunningham a observé que les entreprises qui mesurent et qui rapportent le plus fidèlement leur performance par rapport aux facteurs ESG vont mieux faire à long terme que celles qui ignorent ou minimisent ces enjeux.
Les PDG des huit plus grands gestionnaires de fonds de retraite du Canada se rencontrent deux fois par année avec le gouverneur de la Banque du Canada pour discuter des grands enjeux de l’heure. Lors d’une rencontre en mai dernier, ils ont convenu de l’importance de coordonner leurs efforts en matière d’enjeux ESG.
On est dans la vie de tous les jours des compétiteurs à la recherche d’opportunités de placement. On a tous des politiques d’investissement responsable et on s’est dit qu’il valait mieux se regrouper pour convaincre les entreprises d’adopter des normes qui vont permettre d’assurer une croissance économique plus durable et plus inclusive.
Neil Cunningham, PDG de l’Office d’investissement des régimes de pensions du secteur public (PSP)
« Lors de notre dernière rencontre, il y a deux semaines, on a décidé de faire cette déclaration commune afin d’amener plus d’entreprises à rapporter leurs performances selon les normes du Sustainability Accounting Standards Board et celles du Groupe de travail sur l’information financière relative aux changements climatiques », explique Neil Cunningham.
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actualités canadiennes Gouvernance Normes d'encadrement normes de droit
Capital-actions à classe multiple : commentaire de COGECO
Ivan Tchotourian 23 novembre 2020 Ivan Tchotourian
Dans Le Devoir, M. Gérard Bérubé offre une belle analyse du capital-actions à classe multiple pour laquelle il se montre enthousiaste en s’appuyant sur le cas de COGECO : « Sauver nos fleurons » (21 novembre 2020).
Extrait :
Québec peut, certes, envoyer un message clair proclamant la non-disponibilité de nos fleurons clés aux intérêts hors Québec, comme il l’a fait avec Cogeco, mais l’expérience de Rona est venue démontrer la portée limitée du geste. Lors de son premier essai, en 2012, Lowe’s avait
reçu le message clair du gouvernement libéral qu’il n’était pas le bienvenu à la tête de Rona. En 2016, près de quatre ans et un autre essai plus tard, le géant américain a remis cela avec une offre 65 % plus élevée que les actionnaires de Rona ne pouvaient, cette fois, refuser.
Et il restera toujours la taille des sommes en jeu, pouvant rendre difficile d’ériger une position de blocage.
Pour reprendre la position de l’Institut sur la gouvernance (IGOPP), la meilleure protection sera toujours celle de l’actionnariat de contrôle et les structures d’actions à droit de vote multiples. Y greffer une stratégie gouvernementale face aux entreprises à impact systémique dans le respect de cette réalité voulant que le Québec abrite, grosso modo, trois fois plus de prédateurs que de proies viendra renforcer la résistance. Mais la présence de grands investisseurs institutionnels, tels les fonds fiscalisés et la Caisse de dépôt, capables à leur échelle d’accompagner leurs interventions de « clauses québécoises » ou d’orchestrer une position de blocage, est devenue incontournable.
Et François Dauphin, p.-d.g. de l’IGOPP, d’évoquer qu’une dynamique de renouvellement, voire d’élargissement, du portefeuille de « fleurons » au Québec ne peut qu’ajouter à la vitalité.
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Gouvernance Normes d'encadrement
COVID-19 : quel impact à long terme sur le gouvernance ?
Ivan Tchotourian 6 novembre 2020 Ivan Tchotourian
Sur le blogue d’Harvard, Michael W. Peregrine, Ralph DeJong et Sandy DiVarco reviennent en 10 points sur l’impact de la COVID-19 pour la gouvernance d’entreprise : « The Long-Term Impact of the Pandemic on Corporate Governance » (Harvard Law School Forum on Corporate Governance, 16 juillet 2020).
Extrait :
1. The Board/Management Dynamic
The board and management should be alert to the need for clarity on lines of decision-making authority between them.
The ability of both senior leadership components to execute their duties in times of crisis requires a shared understanding of the basic distinctions between the roles of governance and of management. This is particularly the case as both seek to satisfy enhanced expectations of their conduct created by the crisis.
The Business Roundtable’s statement of governance principles [1] ascribe to the board the basic responsibility for oversight of corporate management and business strategies, consistent with the goal of long-term sustainability. It ascribes to management responsibility for establishing, managing, and implementing corporate strategies, including but not limited to the day-to-day operations of the company under board oversight and updating the board on operational status.
But the line separating what is the responsibility of the board, and what is the responsibility of management, tends to blur in times of crisis. The absence of a “bright line” separating their respective duties can be the source of much leadership-level friction. It is vitally important that the parties work diligently to establish understandable lines of authority that assure the sustainability of organizational decisions and avoid confusion.
2. Greater Board Engagement
Boards of health care entities are likely to retain for the foreseeable future a heightened level of engagement with governance responsibilities, and with management.
Disasters, such as the pandemic, call for board involvement beyond that contemplated by basic governance principles. The pandemic presents such fundamental challenges to corporate stability that the organizational response cannot be delegated to executive management as it would be in the normal course, or even with more traditional crises.
It’s a level of engagement that will be difficult to withdraw from, at least for the near term. For one reason, commerce can be expected to remain in some uproar until public health concerns have been satisfactorily addressed. The leadership, scrutiny, and perspective offered by the board will remain at a premium. For another reason, the lasting impact of the crisis on industries and individual company business models will take time to realize and address. The board will need to remain at a heightened level of attentiveness to evaluate this change. In addition, it is now clear that boards can stay well involved through a variety of “virtual” means; it is logistically easier to perform their duties.
3. Oversight of Business Resiliency
The obligation to exercise oversight of business resiliency will become a primary board focus going forward.
The evolution of the pandemic to the resumption of sustained economic activity prompts the board to pivot to its unique oversight obligation for business resiliency. This refers to concepts of oversight that focus on long-term business and cultural ‘bounce-back’ from truly abrupt disruptions of cross-industry, national, or global proportions. It is a critical board obligation under the circumstances, but one that nevertheless should be exercised with discretion to avoid unnecessary conflict with management.
Business resiliency is an essential part of the board’s risk oversight function. It is grounded in the obligation to periodically review management’s plans to recover from catastrophe and disaster, including such tasks as business continuity, physical security, cybersecurity, and crisis management.
Ultimately, this responsibility encompasses several basic categories: whether there is a plan for getting the organization back on its feet; which corporate officers are designated to lead the effort; whether outside advisors are to be consulted; what are the features of the plan; when is it to be initiated; and whether it addresses workforce health, safety, and support.
4. Enterprise Risk Management
One of the most significant governance implications of the pandemic may be its impact on the role and function of the board’s enterprise risk management (ERM) committee.
From one perspective, the pandemic may serve to elevate that committee to a role of greater significance, potentially on a par with that of the audit committee. From a related perspective, it may prompt significant board contemplation of the level of oversight expected from that committee.
The catalyst for such change is grounded in five interconnected factors: (i) the broad-based application of ERM-focused board committees; (ii) the nature and scope of the pandemic; (iii) the environment of “second guessing” on risk preparedness likely to emerge from the pandemic; (iv) the extent to which the Caremark [2]oversight standard has evolved over the past year; and (v) the lessons on risk identification disaster response that individual corporations are certain to take from the pandemic.
COVID-19 has validated the need for a vital ERM function. Perhaps more significant is the extent to which it has confirmed that cataclysmic disasters can indeed occur and may henceforth be given greater consideration in the ERM risk identification process. These factors will, in turn, place a premium on close board evaluation on the effectiveness of the current ERM program.
5. Quality and Patient Safety
A much greater level of system-wide board collaboration with management on quality of care and patient safety concerns can be expected.
The pandemic has shone a spotlight on the vital role of the board in supporting management to ensure that both that emergency preparedness and response efforts are fully coordinated, and that the impacts of a large-scale effort are analyzed from the perspective of those who are ultimately responsible for the operation of the health care enterprise.
In the past, governing boards may have considered “operational” subjects like quality of care, infection prevention, and shifts in regulatory compliance as solely the province of management and staff. Going forward, the effects of the national health emergency and the lasting influence it will have on health care operations indicate these areas are appropriate for board-level review and decision making. Oversight and inquiry to ensure that management and health care leaders have pressure-tested their plans, and considered the effect on the organization as a whole, is well within the scope of the governing board.
By way of example, the exigencies of the pandemic and the attendant stresses due to lack of health care equipment, staff, and resources have brought to the fore complex issues like rationing care and development of “crisis standards of care.” Board involvement in vetting and adopting care protocols or care priorities developed by the organization is important, as the potential risks—legal, ethical, and reputational—rest squarely with the organization.
6. Executive Compensation
Compensation Committees (and CEOs) will focus on greater discretion in executive pay programs, and on finding a new balance between salary and performance
Indeed, the lessons of the pandemic suggest that the Compensation Committee will need to address a variety of important and sometimes unique compensation concepts that may prompt a long-term expansion of its agenda.
For example, the Committee and the CEO will want to reach a new understanding on CEO emergency powers to change executive compensation during a crisis. From a talent development perspective (and to avoid losing key executives before or during a crisis), the Committee will want to review the overall retention effect of executive programs and determine when retention will be weakest.
A key pandemic lesson is the benefit of having an appropriate level of Compensation Committee discretion built into all executive compensation and benefit arrangements. This includes the flexibility in a crisis not to pay something, or to pay it later, as well as the flexibility to pay something different or additional when extraordinary circumstances intervene.
Long-standing executive pay or benefit programs should be taken off auto pilot and given a fresh look. This includes reviewing supplemental retirement plans to understand all costs under a wider range of financial scenarios, to assess long-term affordability, and to add discretion to suspend new benefits during a crisis.
Executives will be expected to conduct their work outside the traditional office setting. A mobile leadership model will have implications for paid time-off programs, productivity, availability, and performance evaluation.
With many organizations coming out of a period of executive pay reductions, and likely an absence of incentive pay awards, the Committee will wrestle with how to restore executive compensation. The Committee will have to decide whether lost amounts are restored, whether pay increases will be through salary or greater incentive opportunity, and whether restored base salaries will at least make the organization competitive for key leadership talent.
7. Scenario-based Technology Planning
More rigorous board oversight will be exercised over long-term access to key technology, equipment, and
The health care economy has long relied on the availability and effectiveness of both technology and the technicians who operate and maintain it. The pandemic and its collateral impact on technology’s adaptability has shaken that reliance with significant resulting risk implications for physician groups, providers, and similar health care enterprises.
Going forward, boards will be expected to assure that management has in place an effective emergency technology plan. Such a plan would be designed to address events and scenarios in which technology, equipment, personnel, or some combination thereof becomes unavailable, and to build a map of probabilities. Based on each emergency type, the plan would confront an operating model without historically available technology and assure access to both an off-site backup technology, and to additional technical support. Such a plan would anticipate how long the organization can effectively operate under emergency conditions. It should also identify necessary steps to obtain and implement replacement technology, equipment, and personnel— and both the time frame and cost of doing so.
The primary responsibility for scenario-based technology planning will, of course, be that of the management team. Yet with the pandemic’s lessons in mind, the board should exercise robust oversight of management’s planning (including engaging in mock “tech outages”) to help assure organizational preparedness.
8. Oversight of Workforce Culture
Employee health and safety will become a more important element of the board’s workforce culture oversight responsibilities.
It is increasingly recognized that boards have a fiduciary responsibility to exercise oversight of corporate culture. This is grounded in the perspective that a positive organizational culture can be a meaningful corporate asset in a variety of ways (e.g., influencing operational performance, talent development, and organizational reputation). One of the recognized iterations of culture is its extension to employee morale, prevention of sexual harassment, and promotion of inclusion in the workforce.
With companies moving to reopen their business locations, culture issues are also extending to the health, safety and morale of the workforce. Employee concerns in this regard, and a general awareness of the safety of the workplace, are likely to remain well after the broad application of a vaccine or other treatment for the virus. The success of the organization’s post-pandemic business model may depend in part on the sensitivity it displays to employee virus-related concerns. This sensitivity is likely to expand to general health and safety matters. An informed and engaged board can be a support and guidance resource to management’s efforts to address these matters.
9. Oversight of Compliance
Boards may recalibrate the compliance function (and their oversight of that function), to address new risks and to seek efficiencies.
From a risk perspective, this effort will be driven by the implicit recognition that the post-pandemic era will witness a broadening of governmental authority in general, and an increasingly complex national and international regulatory environment in particular.
This can already be seen through requirements relating to accessing federal pandemic relief funds; increasing concerns with the security of information technology, antitrust issues in the labor market, and evolving regulations from the Food and Drug Administration, Centers for Medicare & Medicaid Services, and others.
From a management perspective, boards may see greater efficiencies by moving away from traditional vertical “silo” reporting arrangements for compliance officers, to arrangements that seek targeted accountability for, and greater integration among, the various legal, compliance, and risk functions. Such arrangements are intended to allow for greater collaboration between officers with risk-related responsibilities and to achieve related efficiencies and cost savings without disturbing futility bypass arrangements.
10. Succession Planning
Executive, officer, and director succession planning will require far more consideration at the board
For many organizations, leadership succession policies and procedures have been too insufficient or too informal to address the breadth of related succession challenges arising from the pandemic. Going forward, boards are expected to treat succession matters with an enhanced level of attentiveness and formality, which will provide value to the organization.
For example, the Compensation Committee (or a designated executive succession committee) should work with senior leadership to create or update the executive succession plan for key leadership positions. This would likely include addressing emergency vacancies, longer-term successors, developing leadership skills and experience in future leaders, and retention arrangements for key leaders being groomed.
Other unique executive succession issues to be considered include: the return to work of recently retired CEOs and CFOs to support their successors during the crisis environment; having executives share certain tasks and responsibilities; identifying an interim successor if a previously identified successor is not ready to assume the position; the process for transitioning to the new/interim/emergency CEO; designating an experienced board member to serve as emergency or interim CEO; and more aggressive planning for director succession.
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