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CSR Increasingly Shapes the Boards of Directors

 


L'AGEFI Quotidien | September 24, 2020


The L'AGEFI Quotidien article, “CSR Increasingly Shapes the Boards of Directors," quotes Russell Reynolds Associates Consultants Marc Sanglé-Ferrière​ and Paul Jaeger​ and features our report France Governance Study 2020. The article is excerpted below.

More than half of the SBF 120 boards have a committee dealing with Corporate Social Responsibility (CSR) matters. On the other hand, the Strategic Committee is losing ground, according to the latest Russell Reynolds Associates study.​

CSR is becoming the new backbone of corporate governance. Two thirds of the CAC 40 companies have already defined a purpose, whereas only 16% of the rest of the SBF 120 companies have done so, and one third of the SBF 120 companies have a manager in charge of SER in their Executive Committee, according to Russell Reynolds Associates' latest study on corporate governance at SBF 120 level.

By contrast, the Strategic Committee is no longer considered essential. 48% of CAC company boards have such a committee, as compared to 55% companies that had a strategic committee two years ago. However, this rate has risen from 32% to 36% in non-CAC companies. “The strategic committee makes less and less sense, in a context where most companies hold an annual strategic seminar of 1 to 3 days", adds Marc Sanglé-Ferrière. “It is justified in companies where the Mergers and Acquisitions (M&A) activity is significant, for groups undergoing restructuring, or on a temporary basis, in the form of an ad hoc committee, during transformational operations".

THE DIGITAL COMMITTEE IS DIFFERENT FROM OTHER COMMITTEES

The Technological or Digital Committee is gaining momentum: there are four within the CAC companies (Dassault Systèmes, Orange, Safran and Schneider Electric) and one in companies outside the CAC (Eurazeo). “These digital committees are not there to make decisions, like other specialized committees, but to support the transformation of the company", adds Marc Sanglé-Ferrière. This type of committee is not meant to last over a long period. Yet the number of “digital" directors is stagnating. This position exists within three quarters of the CAC company boards and in 40% of the boards of companies outside the CAC. “Board chairs prefer to surround themselves with leaders and crisis management specialists rather than technology experts", said Paul Jaeger, partner at Russell Reynolds. “However, digital profiles will de facto increase in number with the arrival of younger directors".

THE AGE OF DIRECTORS IS BECOMING A REAL CONCERN

The age of directors has become a real concern for the boards, which are now putting in place succession plans for the Chairs of the Board and the Chairs of the Committees", Paul Jaeger went on. “Board Chairs are struggling to reconcile the rejuvenation of the Boards with the search for experienced CEOs. The 45-53 age group is particularly in demand. It is up to the Chairperson of the Board to support the arrival of new directors. The renewal of the first term of office will be the guarantee of the successful integration of a young director".​

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CSR Increasingly Shapes the Boards of Directors