Hot topics will undoubtedly and first pay

The departure of Antoine Zacharias on merits of excessive compensation, but also conflict with his successor, has highlighted the difficulties of the Council and its committees to play their role in these highly sensitive materials.

This case is particular feed the reflections of a working group set up in April by the French Institute of Directors (IFA) and chaired by Michel de Fabiani, administrator and Chairman of the Committee of the remuneration and appointments of Rhodia. The specialized committees of the Council have no legal existence, they are not binding and have no power of decision. Their function is to prepare the decisions of the Board of Directors, specializing a few administrators to analyze such subject in detail and examine external experts or the company itself. Everything is a matter of behaviour and relations with other administrators and leaders.

The situation today

If audit committees have benefited from rapid change after the accounting scandals of the early 2000s, it not was the same for the committees to prepare the decisions of the Council for compensation or selection of Directors and corporate officers. "Very often, these committees are largely composed of close relations of the President, also Presidents or leaders of other companies, which leaves little time to get involved in this task", observes Marc Lamy, President of Boyden France and rapporteur of the Working Group of the IFA. The objective of the Working Group is to develop a State of regulations and practices in force in France sites, but also in the main European countries. Recruitment and compensation specialists will participate in the work of the group, which will develop a questionnaire to ask a panel of members of committees, before applying a guide of good practice.

Hot topics will undoubtedly, and first pay. Vinci and EADS Affairs showed once again the perfectible nature of the process of policy of remuneration for the leaders. The composition of the committees, in particular the personality of their President, is determinative. "The President of a remuneration Committee has a role of presentation of proposals to the Board of Directors, but also a subtle role in the President to pass messages or ask questions." "This demand both independence and legitimacy and may explain the presence of personalities that are sometimes available at the time, but enjoy this authority to the proper exercise of their function", analysis Bruno forage, specialist pay Mercer HRC and a member of the Working Group of the IFA.

But the issues of succession and the role that can play in this context of appointment or selection committees will not miss to facilitate the work. Large French companies know since last year a wave of changes of Presidents, with a dominant model to separate the functions of Director-General and President of the Council, the latter seat returning to former boss. A model which is not unanimous. The role of the committees in succession will probably be better defined. "To meaningfully contribute to a process of succession, the Nominating Committee must be familiar with the majority of the members of the Executive Committee." "There is a breakthrough in this sensitive area, because the Board of Directors must ensure parallel does not circumvent the leaders," said Daniel Tournier, a partner at Egon Zehnder.