The expected benefits of cleaning up the Pacte law

Governance. The Pacte law (action plan for the growth and transformation of companies) of 2019 established an independent committee responsible for evaluating the commitments made by the company that chooses the status of a company with a mission. The power of this committee remains unclear, however, each company being able to compose it as it wishes while respecting the sole obligation to integrate at least one member of its staff. This ambiguity is quite typical of the way in which fundamental reforms are conceived in France in terms of corporate governance.

There are indeed two ways to change it.

The first is to strengthen the accountability of existing structures, and first and foremost that of the Board of Directors (CA).

The second leads to increasing the number of governance bodies to entrust each of them with part of the company’s responsibilities with regard to its ecosystem.

The first route has been used by successive laws on gender parity which have defined a minimum quota of 40% of members of one or the other sex in the boards of companies with more than 250 employees.

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The second route was favored by the Pacte law, which therefore created a committee separate from the board and devoted exclusively to monitoring the company’s mission.

This way of proceeding by stacking places of power had already been adopted by the Auroux laws of 1983. These had sought to reassess the power of the works council to make it a place of decision-making attentive to work, counterbalancing the supposed turnover. guide strategies in the name of capital interests. On the same question, the Germans have chosen the first path by establishing, since 1976, parity between workers and shareholders at the heart of their councils.

Small change, big scope

However, doubling the bodies has never really worked for two reasons: on the one hand, the board remains ultimately responsible for the strategic choices of the company, which reduces the weight of the alternative bodies; on the other hand, everything being linked, the board must integrate all the constraints and responsibilities of the company if it claims to seriously assume its strategy. The multiplication of bodies therefore complicates the governance of companies without calling into question the preponderant power of the Board.

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The same logic risks playing with the “mission committee”. How to distinguish its own contribution from that of the board whose role is also to integrate the mission of the company into its strategy and, better still, to make it a competitive differentiator? The duplication of authorities can suggest that there are two roles, encouraging the mission on the one hand, driving the strategy on the other hand, while this is only one reality.

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