Lafarge and Alstom… two major French companies trying to change while
taking into account the strategic challenges they have drawn-up. They are
taking two different approaches, both of which will eventually lead them to
move their decision-making centres out of France.
Governance has suddenly become a major issue for those who believe that
we can't let our best companies be bought because we would be at risk of losing
power (Arcelor) or losing them altogether (Pechiney).
Our neighbours in the United Kingdom have long let the market play its
role. One result, for example, is that British automobile manufacturers were
bought out one after the other only to be "reborn" as important
vehicle builders under the control of foreigners.
In Germany, structures with a Supervisory Board in which employees
actively take part have made it possible to keep very strong shareholder
control of large companies which have become multinationals. Two different growth
models, two opposite approaches and France swaying between the two for many
years, reacting, but usually late or too late.
What is most striking at Lafarge and Alstom is the fact that their
Boards of Directors consist primarily of personalities who are renowned, but
not French. It isn't surprising that they promote cross-border operations, with
a global vision, something that would be much harder to propose to a majority
French Board (as is the case with the Supervisory Boards in Germany).
The concept of Board of Director member competence
at highly international companies conflicts with that of nationality: should the
board be composed of a majority of foreign members when the company is very
international and has a majority of foreign shareholders? If yes, how do we
"protect" these companies and ensure that their decision-making
centres aren't moved?
The answer is probably in the question itself and it wouldn't be
unreasonable if some suggested that the largest French companies have a board
consisting of a majority of French directors to ensure French governance. Many
others will rebel against this new form of "protectionism" while
others will claim that it wouldn't be naive given that some European countries
find a number of different ways to "protect" companies.
And governance, or rather the composition of the Boards of Directors of
listed companies with very diluted capital, could again become a political
issue!
Olivier de Guerre
Chairman of PhiTrust Active Investors
