Corporate governance code
of listed corporations
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Value creation and corporate purpose (§1.4)

At a time when the government has launched a broad debate on the tasks of the company and on its corporate purpose, Afep and Medef wanted to highlight the theme of CSR in the corporate governance code of listed corporations due to the growing importance of non-financial issues in companies' strategies. Consequently, following the example of what appears in foreign codes, the role of the Board in improving the long-term value creation of the company is specified, taking into account the social, societal and environmental dimensions of its activities.
The Board may also propose to the general meeting of shareholders any statutory change to the corporate purpose that it deems appropriate.
Given its importance, the paragraph relating to the tasks of the Board is placed at the beginning of the code.

Tasks of the Board and review of the opportunities and main risks (§1.6)

It is proposed to underline the necessity of a review of the opportunities and main risks by the Board of Directors. This risk review shall go hand in hand with closely monitoring the quality of the information delivered publicly.

Non-discrimination and diversity (§1.7)

It is proposed that the Board should carry out specific verifications regarding non-discrimination and diversity, ensuring that the executive officers implement a policy in these areas, notably with regard to the balanced representation of men and women on the leadership bodies beyond the Board of Directors.

Lead Director (§3.2)

In the event of the combination of the offices of Chairman and Chief Executive Officer, it is indicated that the Board may appoint a Lead Director from among the independent directors.

The Board and communication with the shareholders (§4.2)

To respond to demand from institutional investors, it is proposed that shareholders' access to the Board of Directors on corporate governance matters should be entrusted to the Chairman of the Board of Directors or, if applicable, the Lead Director, the latter having to report to the Board on this task.

Directors representing employees (§7.1)

To ensure the presence 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. When several listed companies from the same group apply the provisions of the code, it is up to the Boards to determine the company or companies eligible for this recommendation.

Clarity and transparency of information (§10.1, §13.4)

To enhance transparency with regard to shareholders and to respond to demand from the French Market Authority and institutional investors, it is proposed that the annual report should mention the attendance level of each director at meetings of the Board and at Board committees.
Furthermore, to enable informed voting by shareholders when appointing a director, the company should state the reasons for proposing his or her appointment to the general meeting of shareholders.

Conflicts of interest (§19)

It is proposed to strengthen the recommendations regarding ethical rules for directors by adding that, in the event of a conflict of interests, the director, who must already abstain from voting on the related resolution, should abstain from attending the debate.

Executive officers’ compensation (§24.1.1)

In order to take CSR considerations into account in determining executive compensation, § 24.1.1 is supplemented accordingly.

Composition and tasks of the High Committee on corporate governance (HCGE)

It is proposed to specify and enhance the composition and tasks of the High Committee. Consequently, notably to enable a better balance between men and women on the HCGE, it is proposed that from now on the executive officers may be appointed from among individuals who either hold or have held directorships within companies that refer to the code, without requiring them to have held executive office.
Furthermore, and to give greater prominence to the recommendations made in relation to matters addressed by or referred to it, the High Committee could propose amendments to the code in the light thereof.

Procedure for revising the code

Since the code was revised in November 2016, the consultation procedure has been public.
It is proposed that this practice should be enshrined in the code.

General observations