Business Law

Corporate governance: Afep and Medef launch a public consultation with a view to revising the corporate governance code

    For the second time, Afep and Medef have decided to put in place a public consultation of stakeholders in the framework of the revision of the corporate governance code.

    The aim of this consultation, which will be open for six weeks starting on 28 February 2018 on the website, is to encourage contributions from all those who want companies to adopt an approach of continuous improvement through professional regulation. The comments received will be analysed and made public by an independent body.
    This revision is guided by the desire to make a constructive contribution to the debate on the tasks of the company and its contribution to the general interest.
    Convinced that soft law is the best way of moving forward in the long-term interest, Afep and Medef are proposing a revision of the code explicitly affirming that consideration of the long term and the social, societal and environmental consequences of the company's activity are central to the tasks of the Board of Directors.
    The proposed changes notably concern:

    Long-term value creation
    Carrying on from the revision of the code in November 2016, which expressly introduced the theme of corporate social responsibility (CSR) as one of the tasks of the Board of Directors, it is proposed that the Board should endeavour to improve long-term value creation by taking into account the social, societal and environmental dimensions of the company's activities. These CSR considerations should also be taken into account in setting executive compensation. In this context, the Board may propose changing the corporate purpose, if it deems this to be appropriate. This proposal will make the French governance code one of the most demanding international standards.

    Employee directors
    To ensure representation of directors representing employees precisely where the strategic decisions are made, it is proposed that they should be appointed within the company that applies the code. Furthermore, the code still recommends that the employee director should sit on the compensation committee.
    Companies' commitments regarding non-discrimination and diversity raised to the highest level
    To expand the scope of the commitments regarding non-discrimination and diversity, it is proposed that the Board should ensure that the executive officers implement a policy in this area, notably concerning the balanced representation of men and women on the leadership bodies.

    The High Committee on Corporate Governance 
    In the same spirit, it is proposed that the profile of the executives liable to make up the HCGE should be changed, so they would no longer be required to have held executive office.
    Finally, other proposals are consistent with the recommendations made by the AMF and by Mrs Agnès Touraine and Mr Stanislas Guérini in the context of their mission on "Value sharing and societal commitment of companies".
    According to Laurent Burelle, the Chairman of Afep: "These proposed revisions represent a substantial change to the corporate governance code which, once again, demonstrates the adaptability and responsiveness of soft law, enabling our listed companies to fully embrace the challenges and aspirations of the 21st century. "
    According to Pierre Gattaz, the Chairman of Medef: "For several years, we have been showing that self-regulation of corporate governance works. Let's continue to be pragmatic and have confidence in actors on the ground. "